Budget 2015: cuts to make Daily Mail readers wince, but not just yet

George Osborne is preparing to deliver the first Tory budget since 1996. He will proclaim the success of the government’s “long-term economic plan” and will use this as a platform to launch a radical reduction of welfare expenditure. But repeatedly extolling the success of your long-term economic plan does not mean that you have one. And an economy that in the first quarter was growing at a sluggish annual rate of 2.2% per head – after a deep and protracted recession – is not an indicator of sustained economic revival.

There are two main components of the government’s economic plan. First, to decrease the budget deficit and eventually move it to surplus – with the fiscal burden being borne by cuts in government spending. Second, to reduce the size of the state in the British economy. This is not an “economic plan”, it is a political agenda based on a doctrine of faith.

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About mk242013

Economist
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