Bell & Company Latest Blog – UK GOVERNMENT SPENDING CUTS
UK GOVERNMENT SPENDING CUTS
During the previous term Britain’s coalition Government cut Government spending as much as countries in the midst of the Euro zone crisis. In fact Government spending per person in the United Kingdom fell by more than in Portugal and Italy. Only Greece, Spain and Ireland cut public spending per person more than the UK, and all of these countries demanded financial assistance from the International Monetary Fund and the European Central Bank.
Many complain of “austerity” in the UK, but realistically we are having it easier than many of our European counterparts. Osborne followed the route of cutting spending and not hiking taxes unlike others, whilst also managing a growing population due to numerous factors including migration. Pension and working age benefits have been protected as the coalition spent more on welfare and less in areas such as defence and housing.
The newly instated Conservative Government will continue to trim spending whilst attempting to maintain levels of spending on pensions and healthcare. Osborne aims to turn a budget deficit of over 4% of national income to a surplus prior to the next General Election in May 2020. However, there are questions of the sustainability of this continuing policy.
Julian McRae from the Institute for Government Think-Tank states, “Are we sure we can really do it again? Is it really possible to continue squeezing other services while protecting the NHS and pensions?”
Given spending cuts we must continue to be realistic that the UK economy is still in a recovering state and still not as strong as many think or desire. But we can be thankful we are not in the position of other developed economies in the Euro zone. It does look likely we will suffer Russell Brand and his austerity rally’s for some time to come.
Terry Bell – Director
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