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Ireland's suffering offers a glimpse of Britain's future under the Tories

Larry Elliott The Guardian
Cranes stand idle on a commercial building site in Dublin - victims of the country's property boom and bust. Photograph: Crispin Rodwell/Bloomberg

Cranes stand idle on a commercial building site in Dublin - victims of the country's property boom and bust. Photograph: Crispin Rodwell/Bloomberg


Brian Lenihan's spending cuts and tax hikes are sucking demand out of the Irish economy – and threaten to keep the Republic mired in recession alongside Greece



Last December, on the same day that Alistair Darling delivered his pre-budget report to parliament, the Irish government announced its own plans for tax and spending. Darling said he would delay Britain's fiscal pain; Ireland's Fianna Fáil finance minister, Brian Lenihan, tackled his country's budget deficit head on.

Darling has no intention of being swayed by critics who say that Ireland is showing how deficit reduction should be done. Indeed, he would quite welcome some interest being taken in events across the Irish Sea, for ifGreece is the right's nightmare vision of where the UK is heading under Labour, Ireland is Labour's dystopia of a Tory Britain.

Unlike Britain, the United States, France, Germany, China and the rest of the G20, Ireland has not rediscovered Keynes. It has spurned counter-cyclical budgetary policy and instead has been raising taxes and cutting spending in a series of budgets and mini-budgets that have sucked demand out of the economy. Lenihan has cut child benefit by 10%, public-sector pay by up to 15%, and raised prescription charges by 50%.


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