As we gradually digest the deep cuts announced in the Coalition Governments Spending Review what is becoming clear is that they are reliant on the private sector to increase tax revenues. For the cuts to succeed and reduce the deficit, the private sector is going to have to work very hard to create jobs. The current rate of job creation will have to improve significantly in order to take up the slack of public sector redundancies. The fewer people in work, the more difficult it is to maintain the tax revenues that are critical to the whole exercise of balancing the books and keeping inflation and interest rates low.
What do you think? Will these cuts work? What does it mean for your business? Let us know!