Economy: UK’s Spending Review a necessary step toward fiscal stability
OECD Secretary General Angel Gurría welcomed the United Kingdom’s Spending Review released 20 October as a necessary step towards achieving long-term fiscal stability.
“Budgetary consolidation is never easy but the timing and scope of the measures balance concerns for near-term growth with the need to stop the snowballing of debt and to preserve credibility,” Mr Gurría said. “The measures are tough, necessary and courageous. Acting decisively now is the best way to secure better public finances and bolster future growth .”
The budgetary measures announced by the U.K. Chancellor of the Exchequer correspond to recommendations for a "concrete and far-reaching consolidation plan" laid out in the OECD's May Economic Outlook, Mr Gurría said.
The Spending Review demonstrates that the U.K. plans to address the rapid build-up of debt and reduce it over time . By raising the retirement age faster than previously planned, the U.K. has also shown that it is willing to push for structural reforms. Further steps should focus on increasing the efficiency of health provision and education.
While major budgetary consolidations are always painful, the Spending Review takes several important steps towards minimising the effects on growth, by mitigating cuts in infrastructure investment and prioritising education and research spending.
The United Kingdom has been a front-runner in international climate change. Mr Gurría supports the U.K.’s continuing willingness to back its commitment to a greener economy with further budgetary resources.
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