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Monday, March 30, 2015

Labour borrowing under scrutiny

Labour plans to run the economy have come under scrutiny today with the revelation by the neutral Institute for Fiscal Studies that the party could still be borrowing £30 billion a year at the end of the next parliament if they were to form the next Government.

According to the Times, Paul Johnson, who is the director of the IFS, has said that Labour's plans could mean they would still be borrowing as much as £30 billion a year by 2020:

Ed Balls has vowed to stop borrowing to finance day-to-day spending, but would continue to borrow for infrastructure and other investment spending if he became chancellor.

The Conservatives have promised to end borrowing for both day-to-day spending and investment spending by 2018 and could — according to the Office for Budget Responsibility — be running a £7 billion surplus by 2020.

Mr Johnson told the BBC: “They [Labour] don’t want to get rid of the deficit altogether, they are happy to borrow to invest. They would be happy with a deficit of £25-£30 billion, whereas the Conservatives don’t want a deficit at all.”

Liberal Democrats of course, also wish to eliminate the deficit by 2018 but will do so by cutting less and taxing the rich more.
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