View more on these topics

Blanchflower says a Tory Govt could lead to a “death spiral” in the economy

Former Monetary Policy Committee member David Blanchflower has criticised the Conservatives for their policy of spending cuts and pay freezes saying the strategy risks turning the UK’s recession into a depression.

Writing in The Guardian at the weekend, Blanchflower said the Tories economic proposals could push the British economy into a “death spiral of decline” that would be almost impossible to reverse for a generation.

He also said Tory leader David Cameron should not even have raised the idea that perhaps the UK should default on its debt.

Blanchflower said: “And this week into the current economic crisis stepped the Tories with their ill thought-out plans for (a lack of) recovery.

Cut public spending here, freeze public sector wages there, reduce the benefits of the poor, raise the pension age, and so on. It was hard to see any group that stood to benefit from their proposals.

“Lesson one in a deep recession is you don’t cut public spending until you are into the boom phase. Keynes taught us that. The consequence of cutting too soon is to drive the economy into a depression. That means rapidly rising unemployment, social disorder, rising poverty, falling living standards and even soup kitchens.”

He added: “Cameron concluded his speech arguing for his third option – “for me the only option”. He went on: “We must pay down this deficit. The longer we leave it, the worse it will be for all of us.” Actually, wrong: the longer we leave it, in a recession, the better it will be for all of us.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment