This is a brilliant, MUST READ article from the Economist. Check it out!
Personally, I identify with much of the Economist’s argument. However, I should like to make a couple of key observations.
Firstly, the high level of state spending at the end of the last Labour Government was partially because of the state bailout of UK banks following the 2008 financial crash. Had the Coalition Government embraced more Keynesian type interventions to stimulate growth, like in the US, then the UK might now be experiencing US level growth; instead, UK growth is lack lustre on the back of property inflation stimulated by Government guarantee of property loans to first time home buyers.
Secondly, if government guarantees as contingent liabilities are considered, then the Coalition’s record on bringing down the size of state spending is not so rosy.
Thirdly, the quality of the cuts has been largely criticized by mainstream economists and the IMF. The Coalition Government has used the bacon-slicer approach to public spending. This approach is inherently not strategic and has been responsible for the widespread loss of public services, especially in relation to their quality. Although budgets for education and health have been maintained because of ineffective reforms, the quality of services has still deteriorated substantially. Look at the example of Universal Credits.
Fourthly, I believe that UK foreign policy has become more isolationist largely because of policy blunders by Prime Minister, David Cameron, not sticking to his script. Look how the UK has suffered in relations with China, compared to say the US, Russia, Germany, France and Italy. Had the UK tried to stay at the center of Europe, then perhaps the UK could have provided a counter to aggressive austerity coming from the European Commission; sadly, George Osborne has been cheer-leading for largely iealogical reasons, rather than carefully structured, evidence-based policy.
However, I agree with the Economist on keeping the UK open to immigration to protect economic growth. I also strongly agree that the UK should be internationalist and a pivotal part of the EU. Finally, I passionately believe in protecting Great Britain; it would be interesting though to explore devolving power to great cities like London or Manchester.