My Tribune column on Labour’s jobs plan

The evidence is now mounting by the day that the Tory austerity plan – spending cuts and tax rises which go too far and too fast – is hurting but not working.

We learned last week that our economy has not grown at all since last autumn, well before the eurozone crisis of recent months. In the EU only Greece and Portugal have grown more slowly than us since the end of last year. Unemployment is rising again, with around one in five young people now out of work. And at the time of writing this week’s jobs figures are set to add to the grim news.

And what is the government doing about it? There was precious little from either David Cameron or George Osborne in their speeches to the Conservative Party Conference last week.

They are determined to save political face by sticking to their failing plan, even though the slower growth and higher unemployment it has delivered means they are already set to borrow £46 billion more than expected.

Out of touch Ministers don’t seem to understand the real squeeze on families right now and they don’t understand that if you choke off the recovery and put tens of thousands of people on the dole, claiming benefits rather than paying taxes, then it’s harder to get the deficit down.

It’s no wonder families, pensioners and businesses are crying out for a better way. That is why Labour has set out a clear and credible five point plan for jobs – which we challenged the Tories and Lib Dems to support in Parliament this week.

First, repeat the bank bonus tax again this year. The £2 billion that could be raised should be used to build 25,000 affordable homes and fund 100,000 jobs for young people, which they would be required to take-up. It can’t be right to be cutting taxes on the banks when another generation of young people are facing the early years of their life stuck on the dole.

Second, genuinely bring forward long-term investment projects – schools, roads and transport – to get people back to work and strengthen our economy for the future. For example, there are hundreds of cancelled school building projects that are ready to go.

Third, reverse January’s damaging VAT rise now for a temporary period until the economy is growing strongly again. This would be a £450 boost for a couple with children, providing immediate help for our high streets and for struggling families and pensioners too.

Fourth, an immediate one year cut in VAT to 5% on home improvements, repairs and maintenance to help homeowners and the many small businesses that are so dependent on the state of the housing market.

And finally, a one year national insurance tax break for every small firm with fewer than ten employees which takes on an extra worker. This could be paid for using the money left over from the government’s failed national insurance rebate for new businesses and would helping small businesses to grow and create jobs.
This is a real plan to help struggling families and small businesses, get our economy growing and create jobs which are the key to getting our deficit down.

And Labour’s jobs plan would be possible if the government adopted a steadier and more balanced deficit plan – a slower pace of tax rises and spending cuts that allows us to support jobs and growth.

Even the International Monetary Fund is now saying the government should look at slowing the cuts and tax rises if, as they repeated last week, the economy was to “undershoot current expectations and risk a period of stagnation” – as it has been for nearly a year.

We face a jobs and growth crisis in Britain. Labour is setting out a better way with a five point plan for jobs. It’s now time for the government to act. With every day that passes where the government does nothing families, pensioners and businesses will pay a heavy price.

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Posted October 14th, 2011 by Ed