We urge Darling not to undermine recovery with cuts

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FT.com / Comment / Letters - We urge Darling not to undermine recovery with cuts.

Sir, As we look forward to the pre-Budget report there is inevitability a great deal of debate about the best pace and scale of reductions in the deficit and about how to balance the likely solutions of economic growth, tax and spend.

These are important concerns the Chancellor will want to address but the more immediate focus of the PBR is the financial year ahead. As economists with a variety of specialties, we urge the Chancellor to resist any temptation to start cutting public spending in 2010-11.

Despite improvement in the outlook, taking risks at this point while recovery is delicate would risk a return to recession. What progress has been made towards recovery in the UK and abroad has been, in some considerable part, due to decisions by governments to increase spending as a stimulus, to actively support employment and to accept higher deficits as an inevitable outcome of these measures.

To reverse this policy just when it is having an effect would be mistaken. Although, in such unusual times, it is difficult to be sure of the best actions to take, we feel that the balance of risk suggests our country should be more concerned about a likely deepening of unemployment than about possible inflationary pressure.

Reducing the deficit now through spending cuts would undermine the recovery and ultimately damage the public finances further.

Prof David Blanchflower,
Dartmouth College and University of Stirling

Prof David Bell,
University of Stirling

Prof William Brown,
Cambridge University

Prof Paul Dolan,
Imperial College, London

Prof Peter Elias,
University of Warwick

Prof Robert Elliott,
Aberdeen University

Prof Saul Estrin,
London School of Economics

Prof Richard Freeman,
Harvard University and Centre for Economic Performance,
London School of Economics

Prof Geraint Johnes,
Lancaster University

Prof Robert MacCulloch,
Imperial College, London

Prof Stephen Machin,
University College London and Centre for Economic Performance,
London School of Economics

Prof Andrew Oswald,
University of Warwick

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