Ed’s BBC interview on today’s jobs figures: if we don’t act on youth unemployment, our country will pay a very long-term price

Jane Hill: If you were in government, what would concern you more: the unemployment figures or the growth forecast?

Ed Balls: I think the unemployment figures are really, really dangerous. I am here in Kent talking to young people who at the moment are finding it really hard to get jobs. We’ve now got the highest level of youth unemployment since records began and the danger is that we have a whole generation who lose a chance to work and get skills but also it’s a big burden on the taxpayer too because you can’t get the deficit down if the economy has flat-lined and unemployment is rising. And that’s why at this very uncertain and difficult time we are saying very loud and clear to the Chancellor: it’s not working, your plan, you have got to change course. We’ve got to get the economy moving and get jobs being created. Labour’s setting out a very clear five-point plan for jobs and growth and I’ve been talking to young people here and saying we would repeat the bank bonus tax and use that to get 100,000 jobs for young people. It’s what we need. If we don’t do this soon we are going to pay a very long-term price in our country.

JH: We have talked about your five point plan before but you will know as well, and Vince Cable reiterated here in the last hour, that the government has plans too. He will tell you time and again about the apprenticeships, about the other job creation schemes for 16 to 24 year-olds. He will say the government is not sitting on its hands and it’s aware of the problem of youth unemployment and is doing something about it.

EB: We have had a 160 per cent rise in long-term youth unemployment here in Chatham since the beginning of the year. It’s the highest level since records began and the reason is because the private sector is not creating jobs, the public sector is shedding jobs really fast and the government abolished important things like the Future Jobs Fund which was about getting young people into work. I’m afraid Vince Cable can’t talk his way out of the facts. The economy has flat-lined, unemployment is rising and the government is not only not doing enough to make it better, they are actively making it much worse. We keep hearing from the government in the last few days it’s all the fault of the euro crisis. It’s not true. We have had slower growth than any other major economy except Japan. We have had big rises in unemployment and our recovery was choked off well before this latest crisis. From Vince Cable, from the government, it’s enough of excuses. They have got to act. They are the government now. They have got some responsibility to get help for young people, help for women, help for jobs, help for families and to be honest, if we don’t do this, we’ll find out from the Chancellor in a week or so, not only is he revising down his forecast for growth but borrowing will be higher than he planned as well. This is not a plan for deficit reduction. It’s making things worse and the government has got to do something on jobs. That is why I am here talking about Labour’s five point plan.

JH: The bond markets in this country though are not in the parlous state that they are in an awful lot of those other eurozone countries and the argument is that is precisely because of this government’s deficit reduction plan.

EB: That is the Conservative Party-Treasury-Liberal Democrat argument. I have to say, economically, I think it is a threadbare argument. There is no doubt that us not being in the eurozone is very important because we haven’t got the single currency default risk problems of Spain or Italy or Greece. But the reason why our long-term interest rates are so low is not good news. It’s because the Bank of England is not going to be raising short-term interest rates anytime soon because the economy is flat on its back. If the government were right in saying this is all about bond market confidence then when America’s interest rates fell in August after a downgrading, they should have been going up. The reason why they have gone down in Britain and America is because our economies are flat as a pancake. The strategy has backfired. This is not good news, these very low interest rates. It’s a symptom of the problem. We need less spin, less excuses and more substance. I don’t care what George Osborne calls his plan. He doesn’t have to adopt all the elements of my plan or even any of them, but he’s got to have a plan and quickly because if not families up and down the country and businesses and young people are going to pay a very, very heavy price.


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Posted November 16th, 2011 by Ed's team