2:27pm UK, Sunday June 13, 2010
A leading economist has warned the Government’s proposed spending cuts risk plunging the UK back into recession.
David Blanchflower, a former member of the Bank of England’s monetary policy committee, told Sky News’ Sunday Live that further investment is needed to build growth.
"I think if these plans are implemented it is almost certain that we are going to have a double dip recession," he said.
"The issue is: where is the growth coming from in the economy?
"It is not going to come from the public sector and I see no evidence at all that private firms are investing or hiring.
"The only show in town now is the public sector. Now you remove that there is going to be no growth.
I’m happy to say we need a plan to get the deficit down but what I’m hearing is going to crush the public sector
"We need a plan for growth, we shouldn’t be cutting now".
But former Chancellor Lord Lamont told the programme the UK needed to heed the warnings from other countries and start reducing its deficit.
"We have seen in Europe how other countries have been threatened by the consequences of the Greek crisis," he said.
"We should not imagine we are immune from that. "Our level of borrowing proportionately is not that dissimilar to Greece."
Professor Blanchflower described the comparison with Greece as "nonsense" and claimed that Lord Lamont was "talking down the economy".
Mr Darling claims the PM has been deliberately talking down the economy
"I’m happy to say we need a plan to get the deficit down but what I’m hearing is we are going to crush the public sector," he said.
"The logic has to be where are the jobs going to come from in the private sector?"
David Cameron’s new Office of Budget Responsibility will publish an updated borrowing forecast on Monday, which is widely expected to be better than previously thought.
Alistair Darling has said he will demand a "very big apology"from the Prime Minister for misleading the electorate about the state of Britain’s finances if this proves the case.
The former Chancellor has accused Mr Cameron of deliberately exaggerating the problems to justify his plans to raise taxes and implement massive cuts.
Today is a busy one on the article front mainly because its things that really get under my skin. But also the “double dip recession” is not likely to happen it is going to happen! its about time people woke up to the fact the UK has no money to pay its bills the creditors are at the door we need to fire some of the workers and start cutting that deficit drastically. I cannot believe Alistair Darling has the audicity to ask for an apology its a joke! him and his cronies including Gordon Brown have run the SS. UK into an iceberg a lot bigger than the titanic had to deal with. Then standing there saying well the hole in the side might not be as big as expected is he really that crazy? We are going to lose 5 – 20 years on a recovery program of the damage done within 13 years. Jobs are going to go and we will be lucky to get away with a “double dip” recession but more likely a depression. I predicted this 3 years ago yet here we are with these so called educated people talking as if they just worked it out. Truth be known these things have no doubt been floating around longer than I noticed and nobody wanted to speak allowed in case they were the next person with the door hitting them on the way out. The Greece scenario is a lot closer than the previous government would like to admit and if the UK fell into that pit we are looking at major problems but also remember when you get that credit card bill when you over spend and really struggle to pay it? well that’s the UK economy but a lot worse I believe currently it works out at around £100,000 per person in the UK to what needs repaying. Really sad state of affairs.