Tory efficiency plans criticised by leading academics

Some 77 leading academics have now signed a letter warning against Conservative plans to create an extra £6bn-worth of savings over the next year.

The economists used the letter to warn that Tory savings proposals would damage confidence in the economy causing economic growth to slow again and endangering jobs.

This, they argued, would make it harder to reduce the £168bn public deficit, the Guardian reported.

The economists supporting the letter include David Blanchflower, a former member of the Monetary Policy Committee, and Labour peer Richard Layard. Economists from top universities including Oxford and Cambridge have also signed.

The letter follows another by leading businesses which criticised the government’s plans to raise National Insurance by 1% next April.

Tory insiders have criticised the latest letter saying Labour had to call on the support of academics because they could not get businesses to back their plans.

The letter said: “[The £6n efficiencies over the next year] will lead directly to job losses and indirectly to further falls in spending through the standard multiplier process. At a time when recovery is delicate, it could even affect confidence to the degree that we are tipped back into recession – with much larger job consequences.”

It added: “Rash action now could imperil not only jobs but also the prospects for reducing the deficit.”

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