UK Politics

Labour Party: Conservatives risk to the recovery

News   •   Feb 05, 2010 08:19 GMT

A new report shows how the Conservatives' plans for immediate  cuts could damage the economic recovery, as well as hitting families hard.

Warnings from the Institute for Fiscal Studies (IFS) and the National Institute for Social Research (NIESR) call into question Tory plans to cut spending in 2010. Child tax credits and Trust Funds are amongst programmes set to be cut, hitting families hard and threatening the economic recovery.

Speaking to The Politics Show in January, David Cameron laid out conservative spending plans saying; “I think it is right to make a start in reducing some of those public spending programmes in 2010, this year.”

However, speaking to Radio 4 today, Ray Barrell, Director of Forecasting, NIESR said “There’s no need to cut spending now… what we should do is to have a fiscal expansion now and a fiscal contraction in the future”.

The warnings on Conservative policy have been raised by today’s publication of the IFS Green Budget which argues against spending cuts this year.

The report follows repeated warnings from leading economists on the danger of immediate spending cuts. Speaking to the Financial Times in January, John Hawksworth of PricewaterhouseCoopers said; “premature monetary or fiscal tightening (i.e. anytime before 2011 on any scale) would be risky”

Today's report underlines how the Conservatives’ economic plans would put the recovery at risk  and shows that the Tories’ approach would hit families and businesses today. Following the disarray in their position over recent weeks, today’s fresh concerns from economic experts cast doubts over the credibility of Conservative economic policy