Saturday, November 15, 2008

Labour's 'Mugabenomics' Warning.

With the clock ticking down Gordon Brown’s time as Prime Minister, we should be aware of his scortched earth option – to borrow or print money while increasing spending on special interest groups, political allies and marginal seats. For him, this only needs to work until election day. For us, the effects would be felt for a very long time.

Unfunded borrowing adds to the national debt, the repayment charges become more expensive, the costs pile on for future years and the economy pays for it by being stifled by taxes for years to come.

Instead, we propose:

A responsible fiscal policy, with an independent Office of Budget Responsibility to hold every government to account;
Economic responsibility:
  • A responsible financial policy, bolstered by a renewed role for the Bank of England in monitoring overall debt levels; and

  • A responsible attitude to economic development, which fosters more balanced economic growth.

Fully funded tax cuts, not
unfunded "tax cons" from Labour:

A 2-year council tax freeze, paid for by cutting back on government advertising and consultancy fees:

£2.6 billion of tax breaks would be given to employers in total – and this would be paid for using the money saved on welfare payments. The scheme would create new jobs, boost the economy and reduce the damaging social costs associated with unemployment. As it would be funded from lower spending on unemployment benefits, it would be revenue neutral overall for the Government.

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