The Observer view: sticking to fiscal rule will imperil Labour’s future
To react to this fiscal crunch by cutting public spending – both capital investment and current – is the wrong approach macroeconomically. It risks making the problem worse: depressing growth further, and reducing tax revenues and hence the resources available to improve public services. The economy will not sufficiently grow while people sit for months on NHS waiting lists unable to work; while children from poorer backgrounds are held back from achieving their full potential at school; and while the housing market is so dysfunctional that lack of affordability prevents people taking up economic opportunities.
There are other options available.
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