Britain is now halfway to an unprecedented triple-dip recession due to a stalled recovery in our manufacturing sector that was supposed to kickstart sustained growth in the aftermath of the credit crunch.
Industrial production was growing strongly in 2011 and the coalition government said it would rebalance the economy away from financial services and towards the manufacturing belt of the Midlands and north of England.
This has not happened.
Instead the economy has contracted by 0.3% according to the Office for National Statistics (ONS).
As ever, with this government, the blame was put on everyone and everything but themselves: the eurozone and a temporary drop in oil and gas output in the North Sea were blamed. The government even said that the recession was caused by bad weather.
When George Osborne became chancellor in May 2010, he said it was vital that the country kept its cherished AAA credit rating to maintain our financial credibility. Even this supposed measure of financial success is now at risk through what leading economist, Chris Williamson called “broad-based weakness throughout the economy”.
It is clear that we need action from the government to kickstart our flatlining economy. Labour is calling on the government to introduce a compulsory jobs guarantee for the long-term unemployed and a temporary VAT cut to boost family incomes and our struggling high streets.
Since the general election in 2010, manufacturing and construction have seen big falls in activity. These should be the bedrocks of our economy and the basis for our success as a country.
In Crosby, plans are well advanced for the set up of a foodbank. Across the country 250,000 people used a foodbank last year. Living standards are under attack for working people and for pensioners with many people facing a choice between heating and eating as energy and food prices go up while wages pensions and benefits fall in real terms.
This government has borrowed more money than it promised. They have needed to do this because of the lack of growth. Companies have been making low or no profits so have not paid the tax that the government hoped to collect. At the same time, more people have had to rely on benefits and this has also increased the amount of money being borrowed.
This government is borrowing to pay for economic failure and has not reduced the debt. If the economy was growing the government would be able to pay off the debt. But until the economy grows that won’t happen. That is why we need to invest in jobs and growth instead of paying people to stay out of work.
In America and in Germany, two of our international competitors, the governments have not cut to the bone and have grown their economies. We could learn from America and from Germany and we could copy their successful responses to the financial crisis.