Economists back Alistair Darling over cuts delay
More than 60 leading economists backed Chancellor Alistair Darling today over his decision to delay spending cuts until next year.
In two letters to the Financial Times, they said it could be "positively dangerous" to begin cuts - as the Tories are planning - and would risk tipping the economy back into recession.
The letters are a direct riposte to a letter sent to The Sunday Times by a group of 20 leading economists urging more rapid action to tackle Britain's £178 billion deficit.
One letter organised by Lord Skidelsky, a cross-bench peer and biographer of the economist John Maynard Keynes, accused the authors of The Sunday Times letter of trying to "frighten" the public over the scale of the deficit.
"How do the letter's signatories imagine foreign creditors will react if implementing fierce spending cuts tips the economy back into recession?" they ask.
"For the good of the British public - and for fiscal sustainability - the first priority must be to restore robust economic growth."
The other, organised by Lord Layard, emeritus professor of economics at the London School of Economics, commends Mr Darling's "sensible" plan for reducing the deficit.
"While unemployment is still high, it would be dangerous to reduce the Government's contribution to aggregate demand beyond the cuts already planned for 2010-11," they said.
"History is littered with examples of premature withdrawal of the government stimulus, from the US in 1937 to Japan in 1997. With people's livelihoods at stake, a responsible government should avoid reckless actions."
The signatories to the letters include two Nobel laureates - Joseph Stiglitz and Robert Solow - and five former members of the Bank of England's monetary policy committee, including former deputy governors Sir Andrew Large and Rachel Lomax.
A spokesman for Mr Darling said that the letters belied shadow chancellor George Osborne's claim that there was a consensus among economists on the need for early action to tackle the deficit.
"Once again George Osborne has jumped on the wrong bandwagon. His judgment is wrong and his approach would risk derailing the recovery," the spokesman said.
"It's obvious to most people that government support is still needed until recovery is secured. It's a view shared by most other governments around the world of all political colours."
- 1 Australia to impose 24-hour curfew on all cats to protect endangered species
- 2 Model's video shoot on the beach interrupted by sudden landing of a group of illegal migrants
- 3 The difference between a psychopath and a sociopath
- 4 Black and ethnic minority people twice as likely to be hit by Tory cuts than white people, report finds
- 5 MH370 search: Boeing 777 wing that could match missing plane found on the French island of Reunion
Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
Australia to impose 24-hour curfew on all cats to protect endangered species
Israel accused of killing 75 children during day of 'carnage' and war crimes in Gaza war
MH370 search: Boeing 777 wing that could match missing plane found on the French island of Reunion
Madeleine McCann 'not the identity' of fair-haired girl found dead in suitcase in Australia
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
I am the Jeremy Corbyn supporter that many will tell you doesn't exist
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
Labour leadership contest: I would never quit the party, says Liz Kendall
£27000 - £32000 per annum: Recruitment Genius: This Edinburgh city centre Scho...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...
£17900 - £20300 per annum: Recruitment Genius: An enthusiastic Marketing Assis...
£24000 - £25000 per annum: Recruitment Genius: This contract caterer is proud ...