There have been cries that the budget deficit reduction measures being employed by George Osborne and the Coalition Government are not working. We have an economy which at best is showing very small growth but we may see a ‘triple dip recession’ in the next few months and Government borrowing still very high.
The extent of the problem is enormous: The Government debt is £40,000 for every household in the UK and the Annual deficit has reduced but is still £5,000 a year for each household. Those who argue for a change in direction and a boost for the economic activity believe that this will give the Government more income in tax revenues and lead to a reduction in Government borrowing.
What is certain is that the UK has put itself in a position where there are no easy answers and as we know the UK is not alone here. Welfare spending is a large proportion of Government spending but a reduction in this would lead to hardship and reduce the amount of money that a number of households would have to spend.
One action that we can expect would be more assistance for first-time buyers to get on the housing ladder. This should in turn lead to more activity in the housing sector. Also look for help for entrepreneurs starting their own business. I expect tinkering round the edges but no change in direction, as has shown the size of the problem is huge.