The Labour government has been accused recently of being too complacent over public debt levels, with a number of top economists reportedly accusing the Labour party of ‘alarming complacency’ with regards to its failure to provide any explanation with regards to how it is going to reduce the massive mountain of public debt. Eleven of the top economists in the country are said to have signed a letter that accused the government of being irresponsible and complacent.

The letter expressed great concern over the risk that Britain faced as a result of the public debt, which is heading towards £1.5 trillion, and it said that the public debt level ‘could embark on an unsustainable path, and may already have done so’. The economists went on to state that Britain was at risk of losing its triple-A credit rating, and that the effect upon sterling could be disastrous.

The Labour government has recently made a decision to wait until after the election to produce a Comprehensive Spending Review. This fixes the budgets of departments for a three year period. However, the postponement of this could pose a further risk to Britain according to the letter from the economists. Figures show that the budget deficit for this year comes in at a record £178 billion.

In the letter the economists stated: ‘The absence of even the rudiments of a convincing plan to reduce Britain’s structural budget deficit in the December Pre-Budget Report was highly irresponsible and risks damaging the economy. It showed alarming complacency in the face of the fiscal challenges facing the UK.’ However, the Treasury said: ‘The Government is committed to halving the deficit over four years and has set out the slower spending growth and tax rises necessary to achieve it. The new Fiscal Responsibility Bill will … require a year-on-year reduction in borrowing.’

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