Don’t be taken in by that £50bn ‘fiscal black hole’. It’s just a dodgy Tory metaphor.
Drastic public sector belt-tightening is not an economic necessity but a political decision.
The idea has quickly taken root that the chancellor is left with no choice but to drastically tighten the nation’s belt. But there is no objectively measured “hole”. What Hunt is describing is the gap between how big the OBR forecasts the national debt will be in the future and where he would like it to be according to his own rules; at the moment, the government says it wants the size of the national debt to be falling relative to the size of the economy within three years.
This rule is a political choice.
Sonia Sodha
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