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Fri, 10 July 2020

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Former Tory minister Nick Boles calls for end to austerity

Former Tory minister Nick Boles calls for end to austerity
2 min read

A former government minister has called for an end to austerity - and warned the Conservatives will lose the next election if public spending cuts continue.

Nick Boles said "the age of austerity is over" and said the Government should instead be investing in the economy in an attempt to boost productivity and real wages.

His comments increase pressure on Philip Hammond to loosen the nation's purse strings in the Budget later this month.

The Chancellor has previously insisted that he will stick to the strategy of bringing the UK's books back into the black.

Speaking on Radio Four's Today programme, former skills minister Mr Boles - who recently returned to parliament following cancer treatment - said: "We should stop trying to cut [the deficit] any further. We should drop our surplus target because the urgent priority now is to get productivity up and to get real wages up.

"The only way to get productivity up is by increasing investment. I think we now need to make that the focus of government. Many governments run deficits of that sort of level (2.6%) year on year. So long as you are spending the money on investment, there is a very good prospect that that will generate a return in the economy that enables you to pay the debt down.

"What matters is the target to reduce debt as a percentage of GDP. I think we should keep that target but we can do so and massively boost public investment."

He added: "The Government can’t, after seven or eight years, say that the policy we had eight years ago is going to be the only policy we can offer to the British public for another eight years. We can’t expect to be re-elected if we have no new story to tell and no new direction.

"Our urgent problem in this economy is that wages aren’t growing. They are not growing because productivity isn’t growing and productivity isn’t growing because our rate of investment is too low, both in the public sector and the private sector. That needs to be a priority now. The age of austerity is over. We now need an age of investment."

The Institute for Fiscal Studies think tank warned that Mr Hammond was "between a rock and a hard place" as he gears up for the 22 November Budget.

They said that despite political pressure for him to spend more, gloomy forecasts about the health of the economy may limit his options.


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