The Chancellor needs a plan B – my article in The People

It’s going to be a tough year for families and businesses across our country. And the evidence is mounting that the economy has taken a turn for the worse.

My advice to the Tory Chancellor George Osborne is to stop blaming the snow, look at the facts and rethink your plan to cut too far and too fast. Get a policy for jobs and growth and do it quick.

The last Labour government didn’t get everything right – we should have ignored calls for deregulation and had tougher controls on the banks. But when we left office growth was picking up, unemployment was falling and inflation was low.

And because there were fewer people out of work – and the economy was starting to grow again after the global crash – the deficit was coming down. Last year’s borrowing actually turned out £20 billion LOWER than predicted.

But the new Tory-led government has changed course. They’ve abandoned our plan to cut the deficit slowly and steadily in favour of a reckless plan of deep spending cuts and a big hike in VAT.

Already we’re seeing the first signs of these reckless decisions. New figures this weekend show the biggest fall in consumer confidence since 1992. Unemployment and inflation are rising and this week we had the shock news that growth has stalled.

As The People’s report shows this week many working families are struggling to make ends meet – with wage freezes and rising inflation squeezing family budgets.

But I fear there’s worse to come. The VAT rise and big spending cuts to come this year will add to that squeeze on families and hit the fragile economy hard too.

George Osborne insists there is no alternative. But there is another way. We should put jobs and growth first because it’s the best way to get the economy moving again and the deficit down.

That’s what President Obama’s government is doing in America and their economy grew at the end of last year while ours shrank – even though they had snow blizzards like us.

We should repeat the banker’s bonus tax which raised £3.5 billion last year – and use that money to help create the jobs and growth we need this year.

George Osborne seems to be in denial. But it’s time he took his head out of the sand and got a plan B.

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Posted January 30th, 2011 by Ed

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