Douglas Carswell's Blog

The Alistair Darling approach to recovery doesn't work

Over the past three years, governments of all three parties have tried the same failed approach to economic recovery.

Labour and the Coalition might quibble furiously plus or minus a percentage point on deficit reduction. But both are applying the same basic policy, shaped by the Treasury top brass.

Together both administrations have managed to blown an eye-watering £390 billion fiscal stimulus since 2008* - using mostly borrowed money. The result? The economy is flat lining.

Here's a thought; spending to prop things up cost us £390 billion we do not have. Abolishing corporation tax entirely would have cost the Treasury less than half that amount - £140 billion - in lost revenue over the past three years.

How much stronger a position might we now be in if we had done the later, rather than the former? Imagine how attractive a place Britain might now be to entrepreneurs and investors if we'd taken a different approach even a year ago?

Those who say we cannot afford tax cuts are quite happy for us to spend vastly greater sums on a failed fiscal stimulus. It makes no sense.

Britain's economy is on the edge of a cliff. We need to do more than stick to the Brown-Darling path that led us here to get us back to safety.

* - source:  Tullett Prebon strategy note, issue 27, November 23, 2011

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