New sign of backbench unhappiness at Osborne with call for MORE borrowing to fund tax relief
By Matthew Barrett
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David Ruffley MP, a senior Conservative member of the Treasury Select Committee, and a former special advisor to Ken Clarke during his time as Chancellor, has called on the government to introduce short-term growth measures to stimulate the economy. The Conservative Chairman of the Treasury Select Committee, Andrew Tyrie, also raised doubts about the government's "incoherent and inconsisent" approach to growth during Conservative conference at the beginning of October. Appearing on Radio 4's Today programme this morning, Mr Ruffley set out his primary aim:
"We want an adrenaline shot in the arm to the economy. All the very worthy stuff about long-term deregulation, welfare reform, making work pay – all good stuff, but that is not going to show up in the growth figures in the next 12 months."
Mr Ruffley then said Conservative backbenchers were even weighing up the possibility of cutting VAT - a VAT cut is probably the most prominent economic proposal Labour's Ed Balls has come up with since he became Shadow Chancellor:
"There is even talk on the backbenches of temporary tax cuts, even VAT being cut for a period, now I don’t expect the Chancellor to heed those siren calls, but the fact they're being made by Conservatives tells you quite a lot about the concern we have."
"Even if we can’t find the money for tax cuts from public spending savings, we could add it to the deficit and it is not going to send the markets into a tizzy, I don’t think anyone really believes that. The markets will not go haywire if there was a modest loosening in borrowing in the short run if it was for the right reason."
This last point is especially interesting in light of the news today that it's now cheaper for Britain to borrow money than it is for Germany - the first time this has been the case in ten years.
> Other ways of encouraging economic growth are proposed by Conservative MPs in ConservativeHome and the Centre for Policy Studies' seven-part series on ways to turbo-charge the UK economy.