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UK Labour admits growth plan faulty

British Labour leader Ed Miliband has admitted that his economic plan based on a temporary VAT cut will inevitably increase government debts.

The confession came after Miliband failed to acknowledge the flaw in his plan after being asked about it ten times in an interview on Monday.

“That happens – you do some interviews well and some not so well,” he told ITV on Tuesday.

His admittance came after Conservatives described his economic plan as a “mess” that will add an estimated £18.8 billion to national debt.

Miliband said that the VAT cut he is proposing is temporary, so the borrowing will also rise in the short term.

“The point I was making was to get growth going by cutting VAT, then over time you will see borrowing actually fall. That was the point I was making,” he said in an apparent effort to hide his misjudgment.

He also tried to justify his plan saying that he wanted the audience to focus on the result of the proposals that he described as greater growth and lower borrowing in the medium term.

Cutting the national debt has been the flagship economic policy of the current government but estimates show the coalition’s £50-billion austerity program to decrease the 2010 national debt of £1 trillion in a five-year program has failed.

The Moody’s credit rating agency said back in February that the British national debt is expected to soar to 96 percent of the GDP from 70 percent of the GDP by 2016.

 

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via UK Labour admits growth plan faulty.

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