Letters from Lord Sassoon, Andy Burnham and Paul Romer, among othersby Prospect / March 23, 2011 / Leave a comment
Published in April 2011 issue of Prospect Magazine
ENGINE FOR GROWTH
Alistair Darling’s critique of the government’s economic policy (March) is misguided. A year ago, Britain’s AAA credit rating was under threat because of Labour’s economic mismanagement. As Lord Myners put it last August: “the mistake we made as a government was to run large deficits in the middle part of the decade when the economy was clearly running at full capacity.”
George Osborne had no choice but to come up with a comprehensive deficit reduction plan—not to merely halve the deficit over four years, but eliminate it. The government has also set up the office for budget responsibility, to ensure we have independent economic forecasts. This has secured the UK’s AAA credit rating, while the Bank of England has kept interest rates low. These are the prerequisites for sustainable growth.