Hugo Radice, The Bullet, 7 July 2010
The June Budget
Following the inconclusive outcome of the British general election on May 6th, the ‘centrist’ Liberal Democratic Party decided to turn sharply to the right by agreeing to join the Tories in a coalition government. In the run-up to the election, the Tories had argued strongly that Britain faced the prospect of a fiscal crisis unless the government’s deficit was brought down further and faster than the outgoing Labour government intended.
The new government quickly cranked up the volume over the deficit, with fresh scare stories about the risk of contagion from the Greek sovereign debt crisis and the subsequent disarray across the Eurozone. Although Labour and the left at once warned of the danger that sharp cuts would risk a new recession, the coalition insisted on pursuing their austerity agenda — and none more so than the Lib Dem ministers, who before the election had sided firmly with Labour on the issue.