Public sector cuts may, or may not, endanger economy

The Tories first were able to get the top business leaders such as Sir Stuart Rose to ditch the cuts in public spending proposed by the Labour party, but now they have gone even farther and managed to convince 400 SMEs to go against it as well.

However, in an effort not to be completely outdone, Labour has reached out to many eminent economists who wrote and signed a letter that warns if the Tories public sector cuts occur the UK may fall back into an economic recession.

Still, the Conservatives played their cards well, waiting until just after the Labour Party stated that 58 economists worry the economic recovery of the UK may be in danger and then showed the letter of support from the SMEs hours later.

Labour’s letter came with some powerful signatories however, including those of Sir David Hendry and Lord Layard who argue that the £66bn efficiency savings this year proposed by the Tories is just another way to say a budget cut and that the recovery of the economy is too fragile for this heavy action.

Of course, the SMEs who support the Tories have a different viewpoint arguing that if the Government increases National Insurance it will halt job growth since this is the wrong time to be taxing jobs.

The SME’s also stated in their supportive letter that it is not the Tories budget cuts that will hurt the economy, but instead the increase in the National Insurance that will stall the economic growth.