Assess the case for Austerity measures in the UK?

Use data - identify Government spending cuts.

Choose 3 from the following for AS or 4 for A2.

1. Reduces demand pull inflation - however deflation
2. Reduces annual government borrowing however tax revenue also declining, so still borrowing £100billion a year. (AAA rating - A2 students)
3. Run a budget surplus to reduce National Debt - however still borrowing £100 billion a year
4. Cut benefits to encourage claimants to join the owrkforce and boost productivity of those in work as they lose income security - however benefits already v low, poverty, lack of jobs, income tax cuts instead (upto £10,000 per year tax free).
5. Create space for private sector e.g NHS cuts so private health companies provide for those that can afford to pay - however low business confidence so no private sector willing to crowd in where the government disappears (crowding out theory = A2 level).