Government can no longer dance around issue of structural deficit (Surrey Heath Liberal Democrats

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Government can no longer dance around issue of structural deficit

November 19, 2009 12:06 PM
Originally published by Vince Cable - Lib Dem MP for Twickenham

Commenting on the ONS figures and the OECD's economic outlook report, Liberal Democrat Shadow Chancellor, Vince Cable said:

"With public sector borrowing now at over 11 billion, it is clear that the UK finances are in a mess.

"The OECD's analysis rightly shows that this Government can no longer dance around the issue of how it is going to tackle the structural deficit.

"Turning a target to halve the structural deficit into a law is laughable when the Government refuses to say what spending it will cut or the taxes it will raise to actually meet this target.

"Unless the Prime Minister and Chancellor get serious and follow our lead about how to tackle the deficit, there is a growing danger that markets will lose confidence in the UK which would send the cost of borrowing through the roof.

"With the OECD predicting that unemployment will not peak for another two years, we are heading for a replay of the Tory recession of the 1990s, where unemployment rose long after the recession was technically over.

"We cannot simply condemn those who lose their jobs to the scrap heap.

"Alongside efforts to tackle the rising deficit, Government money must be directed into projects that will help to create jobs."

ENDS

Notes to Editors

In its report today the OECD said the following on the structural deficit:

"Once recovery takes hold, further consolidation is imperative as public debt, which was relatively modest before the crisis, is reaching very high levels. By developing and announcing more ambitious fiscal consolidation plans early and supporting them with a strong and credible medium-term fiscal framework, the government would strengthen the recovery. Such efforts would dampen uncertainty related to the fiscal position and concerns about sustainability."