You probably won’t find the failure of the Conservative-led Coalition government laid out any more bluntly than this.
Speaking at Jaguar Land Rover in the West Midlands today (Monday), Ed Balls said George Osborne had failed to reduce the national deficit because of disappointing tax revenues.
“To make up that shortfall, George Osborne has now said he is going to carry on with even bigger spending cuts in the next parliament,” he said, adding that this will result in the biggest cuts in public services over the next five years in any country around the world.
“I don’t think that plan is remotely credible,” said Mr Balls.
Osborne cut public spending hard because he believed the claims of an academic thesis that has long-since been disproved, by Reinhart and Rogoff, that suggested states should not allow their national debt to rise above 90 per cent of GDP.
The result is clear: He stalled the UK economy.
The only way Osborne was able to get the UK moving again was by creating a new housing bubble (which is yet to burst) and by enabling employers to make real-terms cuts in wages, in what amounts to a fiddle of the employment figures.
But tax receipts don’t lie. Despite claims that we have more people in work now than ever before in history, the Treasury is taking less money.
And Osborne’s idea for regeneration is to repeat the strategy that stalled the economy in the first place?