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April 2, 2013 - Bill Esterson's Westminster Diary

Bill Esterson



In this country we have seen five years without growth in the economy. It has taken far longer in this country to recover from recession than anything previously seen. 

The global financial crisis in 2007/2008 led to a collapse in Gross Domestic Product and we have seen a dramatic fall in living standards ever since. 

People on low and middle incomes in this country have been squeezed as pensioners have to choose between eating and hearing and foodbanks are being set up in Crosby and Maghull. 

Meanwhile, children and families are bearing the brunt of the cuts as council cuts, cuts to working family tax credits, the increase in VAT and rising fuel and food prices all pile on the pressure. 

Yet in the United States, the economy has grown steadily and the same has happened in France and Germany. It was not inevitable that this country would face low growth after the crisis and in fact in early 2010, the economy here was growing just as it was in America, France and Germany. 

The difference in this country was that we had a new coalition government. 

The government cut living standards for families and pensioners while at the same time it cut investment in schools when it cancelled the Building Schools for the Future programme. So schools in Crosby, Formby and Maghull who had plans for rebuilding or refurbishment had those plans torn up. 

And the firms expecting to do the work overnight lost their income and had to lay off thousands of construction workers. 

And it wasn’t just the school building programme which was halted. The Thornton Relief Road was one of a number schemes which were stopped dead. And while the Thornton Relief Road is now expected to go ahead, that delay put further downward pressure on the construction sector as well as delaying efforts to help the economy. 

It is three years since the coalition government delayed  projects like the Thornton Relief Road and stopped the Building Schools for the Future programme. The government has announced some new capital projects but of course the construction firms cannot just start work again as many have closed or laid off staff who are no longer available. 

The budget had two measures which caught my eye. One was a tax cut for millionaires. The other was a government scheme to back mortgages on new homes. 

The millionaires' tax cut showed the Tories and Lib-Dems firmly on the side of the wealthy at the expense of everyone else. The mortgage scheme showed a breath-taking lack of economic sense. After all the financial crisis was caused because the banks lent too much money to people who could not repay it. The danger with the government underwriting lending is that they are doing exactly the same again. 

I fear that not only has this government made things much worse through its cuts and attacks on families and pensioners but also it is repeating the mistakes which caused the crisis in the first place. 

That should be of great concern to us all.

 

 

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