From the TUC

Public spending debate: the UK economy will be left behind if this continues

30 Apr 2009, by Guest in Economics, Politics, Public services

Public debate in Britain has very rapidly become dominated by an obsession with cutting state spending.  Not only has Cameron made the notion of swingeing cuts to reduce public debt his sole offer to the electorate, David Davis has now waded in with a list of bits of the public sector to chop.

We should be very worried that while UK politicians go into short-term penny-pinching mode, other countries are developing a vision which will make them the new, innovative, competitive economies of the future. Obama, of course, has already won Congress approval to invest billions in modernising and decarbonising the US economy, while Sarkozy yesterday outlined ambitious plans costing £31 billion to turn Paris into the green metropolis of the future with innovative transport systems, city forests, and new housing.

Of course, the public finances need to remain sustainable but if political debate becomes so narrow that we end up cutting for its own sake while losing sight of the bigger picture, other more visionary economies will become increasingly attractive to investors and will create more productive companies.

The UK’s political leaders need to recognise that we will soon be entering a new economic era where being a low tax, low regulation, low skilled economy will no longer cut it in the global economy.  The heyday of finance capital and making money from money is now dead.  The Government, of whichever stripe, will need to do all they can to make the UK a magnet for innovation, diversity and experimentation not in derivatives and securities but in green products, IT and new services.  We won’t do that if we spend the next five years talking about nothing but how to restructure Winter Fuel Payments to save a few million.

2 Responses to Public spending debate: the UK economy will be left behind if this continues

  1. sam
    May 1st 2009, 11:08 am

    I think that this is a tough call, we need to resolve / work through our financial problems with the economy and we are also still spending in preparation for the olympics but we are not really spending on anything to benefit the UK. We need to cut back on spending and promote things that can make easy money fast to solve this

  2. TAHSIN EROL
    May 22nd 2009, 3:56 pm

    I think a lot of the public sector jobs pay hugely inflated salaries and wages and some of theses jobs created by labour Goverment are not real jobs. Therefore this huge waste in the public sector should stop; Labour Govenment have failed to get the returns for the investment made in public sector whether the investments/projects were not managed properly or the projects invested in were the wrong ones.

    We should cut back public spending drastically, more support for private enterprise and wealth creating sectors of the industry by cutting back taxes, providing greater amounts of cheaper finance.