Tory savings considered dangerous by economists

A public letter quoted by The Daily Telegraph and signed by over 50 economists has issued a warning over the danger that the Conservatives‘ public spending plans represent on the health of the British economy. The publication claims it has read the leaked letter, which is supposedly signed by 58 economists, among them Lord Peston, Sir David Hendry, Lord Skidelsky and Lord Layard. All of them support the current Prime Minister’s plans for the economic recovery, while calling the Tories’ so-called efficiency savings only “a cut by another name”.

The Conservatives have spun much of their ongoing campaign around a proposed efficiency plan on the public sector which is promising to save £6bn straight away. The economists in question are warning this would be a “destabilising action” which is not needed. They claim that the country’s recovery is still fragile, and that “only when the recovery is well under way, will it be safe to have extra cuts in government expenditure”.

This comes in contrast with the opposition party’s supporters of the heavy cuts, as the Tories have been vigurously advertising the backing of over 400 small and medium businesses, as well as that of the leaders of several high-profile companies, such as Marks and Spencer and Next, over their savings plans. Mainly the Tory party is opposing a decision by Gordon Brown’s cabinet to raise National Insurance by one percent next year, for high earners (over £20,000), saying the measure would in effect “kill the recovery”.

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