Lincolnshire Economist: Chancellor's policies will stifle growth

A Lincolnshire economist has criticised the Chancellor's plans to make further spending cuts.

It was announced in the Spring Statement that the health element of universal credit will be halved, along with 10,000 Civil Servants being made redundant.

The Office of Budget Responsibility (OBR) also halved it's growth forecast from 2% to 1%.

Shabani Shaha is a Professor of Economics at the University of Lincoln and says spending cuts will not help growth: "As an economist I can say that it is not a good time to take that restricting policy, because when the economic growth is much below the potential or forecast rate.

"If we think about growth, the most important thing is capital and labour. So if we put a lot of jobs in crisis...the situation will be more worse."

"It's more important to see if there are skills or training development that can bring back people who are under benefits to the workforce, then that will help to increase growth, not like spending cuts."

There was no mention of changes to the Government's policy introducing inheritance tax to farms despite numerous protests, including one in Lincoln on Monday.

The Chancellor also announced existing health related benefits will be frozen, and the criteria for Personal Independence Payments (PIP) will be increased.

The OBR says these spending cuts will save around £5 billion by 2029-30.

"So definitely we see that lots of cuts are not good for the people, they will lose jobs and (feel) more difficulty," said Professor Shaha.

"(It will increase) income inequality, I can say, because we need to look at more in terms of efficiency.

"Because if we can increase the efficiency - maybe for example if HMRC, they increase their efficiency to get the correct amount of tax they can gain more revenue that can enhance more rather than we focus on only cutting."

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