OECD report undermines Brown’s spending plans
By Liz Stephens
A report by a leading world think-tank has criticised the government for not being “more explicit” about the spending cuts and tax rises needed to address the UK’s soaring deficit.
It came as Gordon Brown set out his vision for reform in a new manifesto, Building Britain’s Future, this afternoon.
Opposition parties were quick to respond.
Shadow chancellor George Osborne said: “The OECD has just torpedoed Gordon Brown’s re-launch. Rarely has such a re-launch fallen apart quite so quickly and completely.
“So now we are left with a re-launch without a price-tag, a fiscal policy under attack internationally and a Cabinet in disarray over the basic approach to spending,” he continued.
Meanwhile Liberal Democrat treasury spokesman Vince Cable said: “The government cannot simply close its eyes and hope that the budget deficit will sort itself out.
“The truth is that this recession will create a legacy of public sector debt which must be addressed honestly.”
The report, by the Organisation for Economic Co-operation and Development (OECD) says, “There should be more explicit targeting of programmes for expenditure cuts and temporary revenue raising measures should be considered to help expedite the rebalancing of the budget and reducing the high debt levels accumulated through the current downturn.”
In response to the OECD report and mounting criticism, the prime minister’s spokesman said: “Our debt is rising… but it’s important to remember we went into the downturn with lower levels of public debt than other countries.”
He highlighted that the OECD report’s 90 per cent statistic for debt as a percentage of GDP was gross debt rather than net debt, which is the “main indicator”.
He also pointed out the UK’s net debt as a percentage of GDP according to the IMF was about 66.9 per cent, and that this figure stood at 70 per cent for the US.
