Labour's credit card economy

The most mindless challenge media interviewers throw at Ministers or Councillors who are taking difficult decisions is that they are doing it “just to save money”.   Of course they are.   Unless we make big savings in public spending, this country will go the way of Greece, Portugal, Spain and Italy.

 When the Coalition Government took office one pound in every four that the government spends was being borrowed.   We were borrowing to fund the entire NHS, Schools and Defence budgets.    That was a higher deficit than most of the Eurozone countries whose interest rates have shot up.    The only reason we are not in the same predicament (apart from the fact we are not in the Euro, thank Heaven) is because we have spelt out a clear plan to eliminate the deficit by the end of this Parliament.   If we falter on this path, savers will not be willing to lend to the government unless we pay the same level of interest rates as Italy and Spain.   To pay those higher interest rates we would have to find extra savings, bigger cuts or higher taxes.   And higher interest rates would apply to mortgages too - a disaster for countless home owners.

It is no use blaming this crisis on the banks – though the government is rightly looking to them to pay a major share of the extra tax bill.   The fact is that before the banking crisis the Labour government was running  a record deficit just when they should have been running a surplus.   To pretend that there is now a painless solution – putting off cuts to next year – is grossly irresponsible.   They call for a ‘Plan B’.   Putting off necessary curbs on spending would be Plan B for Bankruptcy. 

Only if we face up to the need to balance our budget can we get Britain back to growth and prosperity.