One year after the Spending Review was announced to reduce the public deficit, the opposition are calling for an emergency Budget in order to boost growth of the economy and create jobs. However, Danny Alexander has spoken of the Spending Review to say that the tough decisions made to cut spending were a clear indication that the UK was “master of its own destiny”.
According to the Treasury secretary, the plan to reduce public deficit has given the UK market integrity and retained low interest rates. Labour argues that the market has remained stagnant since the spending cuts were announced. Government ministers are being urged by Ed Balls, shadow chancellor to “change course”. Labour would like to see tax cuts for small businesses and a reduction in employer contributions of National Insurance, in order to give the economy the kick start it needs.
The reduction in spending between 2011 and 2015 is planned at £81 billion, with only the budgets for international aid and the NHS remaining unscathed. Mr Balls has made claims that the UK is not “out of the danger zone” and the austerity measures were failing, signified by the lack of economic growth over the last 12 months.
Mr Alexander fought back by stating that the government could still “focus resources on the most disadvantaged” by protecting the NHS and increasing tax free allowances for the low paid in society. The prime minister has admitted that the rate of inflation is high, but says reducing VAT would be “crazy”.
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