Tory plans risk double-dip recession, warns Gordon Brown
Gordon Brown has warned that Conservative plans to start cutting the deficit this year risked pushing the economy back into a “double-dip” recession.
In a podcast on the No 10 website, the Prime Minister said the recovery remained fragile and the economy needed time to regain strength — drawing a comparison with footballer Wayne Rooney's injured foot.
“I know everyone will be hoping he's fit for the World Cup but after an injury you need support to recover, you need support to get back to match fitness, you need support to get back your full strength and then go on to lift the World Cup. So with the economy — we're not back to full fitness, we need to maintain support,” he said.
“If we try and jump off the treatment table as if nothing had happened we'll do more damage to the economy — and frankly that means we risk a double-dip recession.
“I think that's a risk we can't afford to take.”
Shadow chancellor George Osborne announced last week that the Tories would make £6bn in public sector efficiency savings this year in order to reverse part of the Government's planned increase in national insurance contributions, due to come in next April.
However, Mr Brown said that would mean taking money out of the economy at a time when it still needed support.
“If you withdraw support too early we'll risk doing more damage,” he said.
The Conservatives received support for their proposals from a series of high-profile business leaders.
However, Mr Brown said there was “widespread agreement” among economists and businesses — including the CBI, IMF and the Institute for Fiscal Studies — that it would be “wrong” to take money out of the economy this year.