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  • "In Feb 2010 more than 60 senior economists signed open letters backing Alastair Darling’s decision to delay government spending cuts until 2011. The letters said that any measures to trim the budget deficit earlier could pull the country back into recession.
    The debate centred on how and when to bring down government borrowing.
    The Labour plan was to "halve the deficit over the next four years - indeed, more than halve it," said Labour.
    The Conservatives called for more radical, earlier action and said their approach had widespread support.
    "There are leading economists who support the Conservative position and, more importantly, there are also leading business organisations and entrepreneurs - people like Richard Branson - who know more about creating jobs than the entire Labour cabinet put together," said shadow chancellor George Osborne.
    Liberal Democrat Treasury spokesman Vince Cable said he agreed that the financial markets needed to see clear evidence that there was a plan to deal with the deficit. But he said any decision on when to begin cuts should be determined by the strength of the economy in a year's time, which was highly uncertain.
    "We've got to look at what is happening in the real economy and not be based on political dogma," he said.
    One of the economists said ‘Unemployment is high, as people are not spending enough to provide full employment and in that situation the government has to keep spending in order to stop unemployment rising.’
    He added: "We shouldn't see government cuts until we've seen the recovery well under way and unemployment on its way down."
    So Labour seem to have had the right plan and, as Vince Cable then alluded, the Tories followed their usual political dogma and have catastrophically failed.
    A lesson for 2015 I feel."
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PM 'agrees euro crisis hitting UK'

12:42pm Monday 11th June 2012 in National © Press Association 2013

Chancellor George Osborne has the backing of Prime Minister David Cameron over his assessment of problems in the eurozone, Downing Street said Chancellor George Osborne has the backing of Prime Minister David Cameron over his assessment of problems in the eurozone, Downing Street said

Prime Minister David Cameron backs the Chancellor's assessment that problems in the eurozone are holding back Britain's economic recovery, Downing Street has said.

George Osborne has faced criticism from some Conservative MPs over his claim on Sunday that UK recovery was being "killed off by the crisis on our doorstep".

He was accused by backbenchers of making excuses for Britain's "awful" performance instead of taking action to revive the economy by cutting regulation and scrapping the 3p rise in petrol taxes planned for the autumn.

David Ruffley, a member of the Commons Treasury Committee, said that "eurozone meltdown" should not be used "as an alibi for no growth in the UK", while Douglas Carswell wrote on his blog: "It is not the eurozone crisis that we should blame for our awful economic performance, but the almost total absence of domestic economic reform."

Asked whether Mr Cameron shared the concerns voiced by critics of the Chancellor, a Downing Street spokeswoman told reporters: "He would agree with the Chancellor, which is why it is so important that we see a resolution of the problems in the eurozone."

Markets around the world responded positively to the 100 billion bailout for Spain's banks agreed over the weekend, with a 2% jump in the FTSE 100 index reflecting similar gains in Asia.

The Downing Street spokeswoman stressed that there would be no UK contribution to the bailout.

"The terms are still being sorted out, but certainly there is going to be no cost to the UK taxpayer, as the Chancellor has set out," she said.

"The important thing is that the eurozone is helping members of the eurozone, which is an important principle. More broadly, what is important is that any decisions that affect the 27 members of the EU, those discussions are had with the 27 members and no agreement is made without them.

"The Prime Minister and Chancellor have been very clear that we want to be able to protect our British interests and at the same time we want to see the eurozone dealing with its problems."

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