George Osborne, the shadow chancellor, said a short-term spending increase of 1 per cent of gross domestic product would mean an increase in taxes in the medium term by the equivalent of almost 4p on income tax.
"That's not just a tax bombshell, it's a cruise missile aimed at the heart of recovery," Mr Osborne said in a speech to the London School of Economics.
The opposition party supported the "automatic stabilisers" of increased borrowing stemming directly from a recession. But Mr Osborne yesterday said monetary policy - lower interest rates - should be allowed to "do the heavy lifting in stimulating demand" rather than trying to boost it through the public purse. "Tackling recession with big spending does not work," he said.
No comments:
Post a Comment