Wednesday, 5 December 2012

Osborne needs an agenda for growth



So with icy winds and snow you could be forgiven for thinking today is all about missing the obvious slip ups, but not so. Today we get a verdict on the core strategy of this government which has it reduced the deficit and to deliver on its own five year plan.

Does George Osborne have the grit to get us through or is he spreading himself to thin and exposing himself to the bitter winds of austerity?

In 2010, the General Election was fought over the economy and the public showed they wanted a Coalition. Labour warned at the time that if the Tories were elected their policies would take us back into a double-dip. After the election, the Summer Budget showed the bitter truth to the folly, that they wanted a pacey five year deficit reduction cycle and punchy upfront cuts to get there. 

Osborne and Cameron staked their political credibility on this economic prospectus and today the public get to see it was based on a totally false premise; that at a time of global downturn that the private sector could solely pick up the slack and that budgets for school buildings and other key services could just be brutally slashed without impact. That by standing up for millionaires that trickle down economics on its own would work. That by undermining rights in the workplace and making jobs more insecure this would lead to economic empowerment.

Let is go back to that first budget and CSR; Osborne cut the building schools for the future budget which today he will re-announce. Osborne predicted the deficit would be slashed but yet debt is ballooning to unparalled highs. Osborne said we should hold his judgement to account on spending; yet he is still in post after calling it totally wrong; a double-dip caused by Downing Street but which is felt on your street.

The public has no confidence in the economic credibility of the current government

On recent polls Labour is ahead or outpolling on economic credibility despite it being only four years since the worst global economic crisis since the 1930s; the difference to then is that whilst other countries have rejected austerity (like the US and Northern Europe) ours has endorsed a different right wing approach. 

The result is clear; those who invested and planned for growth recovered quicker, those that followed austerity have failed.  

And the reality on the ground is stark; David Cameron and George Osborne’s economic policies are not working: 

Failing on jobs, growth and the deficit: Prices are rising faster than wages, our economy has flatlined for two years and long term unemployment is soaring. This is causing long-term damage to the economy. And because the benefits bill is up and tax revenues are down as a result of this economic failure, borrowing is rising so far this year – meaning the government is failing on the one test they set themselves. Raising taxes and cutting spending too far and too fast has backfired. 

Long-term plan for our economy: Banking reforms are being watered down, they’ve failed to deliver on infrastructure investment to strengthen our economy for the future and business is rapidly losing confidence in the government’s ability to make long-term decisions. 

Standing up for the wrong people: The price of this government’s economic failure is being paid for not by the Carlton Club or Cecil Club elites but by people on middle and low incomes who are being asked to pay more, while millionaires get a tax cut – worth an average of £107,000 for 8,000 people earning over £1 million. 

What Labour have consistently said is we need an economy that grows, where everybody has a stake and where the rewards are fairly shared. 

So these are the tests for today's autumn statement:

We need a plan to create jobs and growth, which are vital to get the deficit down and catch up all the lost ground of the last two years. Labour's five point plan includes using the funds from the 4G auction to build 100,000 affordable homes, bringing forward infrastructure investment, a temporary VAT cut and a bank bonus tax to fund a jobs guarantee for young people.

We need long-term reforms to strengthen our economy and ensure that other countries do not continue to race ahead of us. This should include a British Investment Bank properly backed by the Treasury to boost lending to small and medium sized businesses, a long term plan to rebuild our infrastructure and radical reforms to separate retail and investment banking. 

We need fair action to help people on low and middle incomes with the rising cost of living. That means cancelling the fuel duty rise in January, at least until next April. And it means rethinking the plan to give a tax cut to millionaires on the same day that taxes go up for millions of pensioners.

We need to see a change of course from David Cameron and George Osborne, not more of the same. 

Today is a test for our three local MPs - will they stand up for our area or will they continue to back a totally flawed economic prospectus which as all our residents can see, feel and know has not worked. 

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