“Cutting too soon and pushing the economy back into recession will make the deficit worse, as tax receipts fall and benefit payments rise,” the Liberal Democrat Shadow Chancellor said.
Commenting on the IMF report cited by Gordon Brown today, which said spending should be maintained through 2010 to support the economy, Vince Cable said:
“The end of the fiscal stimulus has seen billions taken out of the economy. We have already seen the effects of this with growth falling to just 0.2% and there is a very real danger the economy could fall back into recession.
“The IMF is right to argue spending should be maintained this year. Cutting too soon and pushing the economy back into recession will make the deficit worse, as tax receipts fall and benefit payments rise.
“The Conservatives’ so-called efficiency savings are particularly dangerous. They have no clue where or how these ‘efficiencies’ will be made, making it likely they will be nothing more than a smoke screen for job cuts.”