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| Economists push for deficit cut | Economists push for deficit cut |
| (40 minutes later) | |
| The government must act more quickly to cut Britain's huge budget deficit, a group of economists has said. | The government must act more quickly to cut Britain's huge budget deficit, a group of economists has said. |
| In a letter to the Sunday Times, the 20 experts say the lack of a credible plan threatens to push up interest rates and undermine the recovery. | In a letter to the Sunday Times, the 20 experts say the lack of a credible plan threatens to push up interest rates and undermine the recovery. |
| Shadow chancellor George Osborne said Prime Minister Gordon Brown's "argument on the deficit had collapsed". | |
| But the Treasury has insisted it has already outlined a clear strategy for reducing borrowing. | But the Treasury has insisted it has already outlined a clear strategy for reducing borrowing. |
| The letter was signed by an array of eminent academics and policy-makers including former members of the monetary policy committee and Sir Howard Davies, a former deputy governor of the Bank of England. | |
| Detailed strategy | Detailed strategy |
| It urges that borrowing had to be reduced more quickly than Chancellor Alistair Darling set out. | It urges that borrowing had to be reduced more quickly than Chancellor Alistair Darling set out. |
| Action to bring it down should start this year, mainly through cuts in spending rather than tax increases | Action to bring it down should start this year, mainly through cuts in spending rather than tax increases |
| They urged whoever won the forthcoming general election to present a "detailed" strategy to wipe out the underlying, structural deficit within five years. | They urged whoever won the forthcoming general election to present a "detailed" strategy to wipe out the underlying, structural deficit within five years. |
| They wrote: "The exact timing of measures should be sensitive to developments in the economy, particularly the fragility of the recovery. | They wrote: "The exact timing of measures should be sensitive to developments in the economy, particularly the fragility of the recovery. |
| This is a decisive moment in the economic debate in Britain George OsborneShadow Chancellor | This is a decisive moment in the economic debate in Britain George OsborneShadow Chancellor |
| "However, in order to be credible, the government's goal should be to eliminate the structural current budget deficit over the course of a Parliament, and there is a compelling case, all else equal, for the first measures beginning to take effect in the 2010/11 fiscal year." | "However, in order to be credible, the government's goal should be to eliminate the structural current budget deficit over the course of a Parliament, and there is a compelling case, all else equal, for the first measures beginning to take effect in the 2010/11 fiscal year." |
| Mr Osborne said: "This is a decisive moment in the economic debate in Britain - a moment when Gordon Brown's argument on the deficit has collapsed and a new consensus for more decisive action emerges. | Mr Osborne said: "This is a decisive moment in the economic debate in Britain - a moment when Gordon Brown's argument on the deficit has collapsed and a new consensus for more decisive action emerges. |
| "Crucially, these economic experts also say there is a compelling case for starting in 2010 and that there should be independent oversight of the forecasts - two arguments we Conservatives have been making with force for months now." | "Crucially, these economic experts also say there is a compelling case for starting in 2010 and that there should be independent oversight of the forecasts - two arguments we Conservatives have been making with force for months now." |
| A Treasury spokesman insisted the government had set out a clear plan to halve the deficit in four years. | A Treasury spokesman insisted the government had set out a clear plan to halve the deficit in four years. |
| Both Labour and the Conservatives have yet to provide full details on how they plan to cut public expenditure. | Both Labour and the Conservatives have yet to provide full details on how they plan to cut public expenditure. |
| Last summer, Mr Osborne declined to rule out increasing VAT. | Last summer, Mr Osborne declined to rule out increasing VAT. |
| On Sunday, Shadow Business Secretary Ken Clarke said a Conservative government would not rule out raising taxes in order to shrink the UK's deficit. | On Sunday, Shadow Business Secretary Ken Clarke said a Conservative government would not rule out raising taxes in order to shrink the UK's deficit. |
| In December's pre-Budget report, Labour announced belt-tightening measures including a 1% cap on public sector pay rises and an increase in National Insurance from 2011. | In December's pre-Budget report, Labour announced belt-tightening measures including a 1% cap on public sector pay rises and an increase in National Insurance from 2011. |