Ed Balls’ article in the Mirror: our alternative to ConDem cuts

(You can also read Ed’s speech at Bloomberg here)

Labour’s policies on the economy were working. That’s what the latest figures on economic growth showed yesterday.

We created jobs for young people, cut VAT and supported industry too. That decisive action helped our economy recover from the biggest financial crisis the world has seen for a century.

But I fear all that is now at risk by the Tory-Lib Dem austerity plans to cut spending, slash our public services and hike up VAT.

It’s not just that their plans will hit the poorest families hardest – as we saw this week. They’re also economic madness. We have not yet secured the recovery. In Britain and around the world economies are still fragile.

And all the evidence shows that George Osborne’s emergency budget is sending our economy in the wrong direction. His plans will mean lower growth, thousands of jobs lost and the risk of going back into recession.

As I said in my speech yesterday if Labour is to win the next election, we have to win the economic argument and show that there is an alternative.

Cutting the deficit should not be the most urgent priority, as David Cameron keeps saying. We should be boosting jobs and making sure the economy starts growing again.

We need strong leadership to make a credible case for a better way. Of course we have to reduce the deficit. But we should do it more slowly so that we don’t put jobs at risk. In the long run it’s better for the public finances to have more people in work and paying tax.

And instead of increasing VAT which hits the poorest hardest, we should ask those at the top to pay more by starting the top rate of tax at £100,000 not £150,000.

In the 1930s Ministers, the Treasury and even the Governor of the Bank of England said we must cut now. And what happened? Recession turned into depression.

And in the recessions of the 1980s and 1990s the number of people out of work soared as the Tories said unemployment was a price worth paying.

The Tories and Lib Dems aren’t learning from the mistakes of history, they’re set to repeat them. Labour must have the confidence to say loud and clear: there is an alternative.

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Posted August 28th, 2010 by Ed's team

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