Political parties failing to give “even the broadest details” on eliminating the deficit
Responding to the public sector finance figures released this morning (23 April), which show that public sector net borrowing was £87.3 billion in the financial year ending March 2015, James Sproule, chief economist at the Institute of Directors said:
“While progress on slowing the rate of borrowing is to be welcomed, it must be remembered that the level of government debt – now standing at more than eighty percent of GDP – continues to rise. Record low borrowing rates have made it easy to build up debt on the cheap. This is a dangerous strategy, and when interest rates rise from their record low levels the fragile public finances will come under even more pressure.
“All the major political parties have talked about the importance of fiscal responsibility. However, they are reluctant to give even the broadest of details about how they are proposing to eliminate the deficit. A mature debate on the sustainable level of public finances should be part at the heart of the election campaign.
“The UK remains highly dependent on a few people paying a considerable portion of income and corporation tax, and we remain concerned that overall government revenues are falling below Treasury expectations. Plans to balance the budget through higher taxes are unlikely to be successful and would threaten UK growth. It is also very disappointing to see the parties entering a bidding war on new spending, with little detail on how this would be paid for.”