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Is it time to shrink the UK state?

When you take a step back from George Osborne's budget yesterday and looked at the overall picture one thing is certain, George Osborne has very much decided it is now time to shrink the UK state and increase our dependence upon the private sector. But is the UK state really too large to accommodate in the future?

When you consider that over 50% of household income in the UK is connected directly to the public sector it is easy to see why George Osborne is looking to reduce dependence upon state-funded employment. However, as opposition parties have commented over the last 24 hours there are a number of private sector companies which also depend upon state related contracts and ultimately we could see a reduction in the size of the UK state impact upon the private sector - at least in the short term. What about the longer-term?

In the long-term it seems that the Conservative and Liberal Democrat coalition is happy for the private sector to fill any vacuum left by a reduction in size of the state. How long this might take and how successful it may be are two factors which are as yet unknown and may take some time to materialise. It also seems as though George Osborne has effectively gambled upon the private sector growing at the expense of the public sector as a means of moving towards economic prosperity.

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