2011 and the Economy

Now is the time for when millions of Britons will be making resolutions for 2011 - to quit smoking, to run 20 mins each morning, to get to school on time, to work on the garden at least once each week and so on. Most of the resolutions will be broken by the end of the week or month.

What sort of resolution do we want the new Coalition Government to adopt for 2011?

The Office of Budget Responsibility (OBR) has reported that the Government's drive to reduce the Budget Deficit will cost the nation £1.5bn than originally proposed because of a higher than expected number of people who will lose their jobs as a result of the spending cuts

Common sense tells us that if a government reduces its spending dramatically (as the current Coalition Government is doing), then not only will jobs be lost in the public sector, but since a lot of the work of government is actually carried out by private contractors, then large number of jobs will go in the private sector as well. The irony of the situation is that the private sector is the exact same sector that the Government is relying on to grow, to make up for the jobs that will go in the public sector.

Of course it will also be harder for people who have lost their jobs to find new ones - so not only will the number of people unemployed rise, but of course, so will the bill for job-seekers allowance and other support benefits for people and families with low incomes.

Normally the economy needs to grow by between 1% - 2% each year in order to keep unemployment static. Therefore, if there is a weak economy, increasing unemployment and increasing need for the Government to borrow money - it is time for a rational and sensible government to re-think their strategy.

Some of the questions they need to ask are:

• How will the deficit change as a result of the Government's deficit reduction programme?
• Will there be the jobs in the private sector to cover the numbers lost because of the spending cuts?
• What does the Government need to do to make the economy grow?

This is the New Year's resolution that I think the Government should adopt for 2011 - one that might actually be beneficial for Britain.