The case for austerity

From speed cameras to schools to the film industry - every corner of public spending must be examined for possible cuts.

It was the proper role of government, in the financial crisis 2007-09, to cut interest rates and increase spending. This was right to meet the shortfall in private demand. Although this meant running up a large budget deficit, as the government spent more on welfare than they recieved from tax receipts, it can be seen as a necessary evil. The most ardent of Keynesian thinkers still maintain that spending is needed until the recovery is assured.

But we must put things in perspective. The European Commission estimates that the UK has budget deficit of 12% of the GDP - the highest of any EU member. Long-term interest rates have not shot up because of the serious stance the Lib-Con coalition have displayed on deficit reduction. Increased public spending was the right path in the recession, but now the path is clear.