Economists that previously backed chancellor George Osborne’s deficit reduction programme are now calling on him to change his plans and boost the economy through spending.
On 14 February 2010, 20 economists wrote to the Sunday Times backing Osborne’s policy to eliminate the structural deficit over the course of the parliament.
The Conservative MP hailed the letter as a “really significant moment in the economic debate” at the time.
Hoever nine of the signatories are now calling on Osborne to boost growth through tax cuts and infrastructure spending.
Capital Economics managing director Roger Bootle told the New Statesman: “If I were chancellor at this point, I would alter the plan, I would stop the cuts to public investment and I might even seek to increase it.
“The key thing is to try and get the private sector to spend its money and that may require a bit of Government spending to prime the pump.”
London School of Economics professor of economics Danny Quah says he no longer supports the deficit reduction programme and Cambridge University emeritus professor of economics David Newbury is calling for the Government to spend money to boost growth.
Professors of economics at York, Cambridge and Harvard universities and the London School of Economics have also reversed their calls for cuts and criticised the chancellor’s plans.
Oxford University professor of economics and chair of the Independent Commission on Banking Sir John Vickers has also refused to back Government spending plans again when asked.
Backbench Liberal Democrat MPs John Pugh, Annette Brooke and John Leech told the FT the Government should change course on its spending plans as pressure mounts on deputy prime minister Nick Clegg to influence the economic plans.