The Great Debate UK
– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
The UK should not waste its fiscal crisis. As Britain embarks on its election campaign, this is a perfect opportunity to engage in radical tax and spending reforms designed not just to restore the country’s fiscal balance but to boost its long-term productivity and competitiveness.
It is, of course, necessary to cut the deficit, which is currently running at an unsustainable 12 percent of GDP. It is also important that spending cuts rather than tax rises bear the brunt of the belt-tightening. Otherwise, the UK will find that companies and rich people are increasingly driven off-shore.
The two main political parties — the Labour government and
the opposition Conservatives — broadly buy into this. However,
neither party has spelt out what spending it would cut and where
it would raise taxes. Nor have they given any inkling of seeking
to take advantage of the crisis to push through deep-seated
reforms. They are unlikely to do so during the coming campaign,
fearing that too much detail will scare the voters.