Bill Clinton condemns UK spending cuts

Bill Clinton has spoken out against UK's austerity drive.
Bill Clinton has spoken out against UK's austerity drive. Photo: AFP/Getty Images

By Alex Stevenson

Former US president Bill Clinton is the latest politician to condemn the coalition's austerity drive.

His comments to a university conference reinforce shadow chancellor Ed Balls' claim that rapid spending cuts risk harming the economy recovery.

"If you do things that dampen economic growth, and the UK is finding this out now, they adopted this big austerity budget, there's a good chance that economic activity will go down so much that tax revenues will be reduced even more than spending is cut, and their deficit will increase," he said.


Mr Clinton's comments were part of a broader argument pressing Barack Obama to avoid severe spending cuts. The current US president is meeting with Congress leaders to discuss raising the country's borrowing limit.

"In the current budget debate, there's all this discussion about how much will come from spending cuts, how much will come from tax increases," Mr Clinton added.

"Almost nobody is talking about one of the central points that everyone who's analysed the situation makes... that you shouldn't do any of this until the economy is clearly recovering."

David Cameron has cited the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund, the Federation of Small Businesses, the CBI and the Bank of England as supporters of his approach.

But shadow chief secretary to the Treasury Angela Eagle said the deputy-general of the OECD, three recent Nobel prize winners and a former chief economist to the government had all issued warnings of the risks of chancellor George Osborne's plan.

"After the global recession every major country needs to take difficult decisions on tax and spending cuts to get their deficits down," she commented.

"But we need a balanced deficit plan that puts jobs and growth first. Britain has faced the same global headwinds as other countries around the world, but our economy has flatlined over the last six months while America and almost all other EU countries have grown more strongly."

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