John Major on the need to tackle the UK Government Deficit.

Former Prime Minister, Sir John Major, today laid out, in simple language, the scale of the problem with the nation’s finances in BBC interview

I may change the order somewhat but this is a summary of what he said.

– The scale of the government deficit is unprecendented in Sir John’s lifetime.

– If it is not tackled there will be a severe crisis when our national credit rating collapses, leading to a sterling collapse, leading to soaring interest rates.

Why are we in such a mess? Sir John Major blames it on the government running a deficit in the good times, so the total debt increased when it should have been reducing.

There are 3 ways that will bring the current £180bn  deficit down.

1. Increase Taxes – but even a 5% increase in the basic rate of income tax and 20% VAT rate will do very little.

2. Cut expenditure.

3. Economic Growth

It is expenditure cuts that Sir John advocates

UPDATE 7th July – Adam Smith Institute blog has an alternative report of Sir John’s Comments.

Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: