The chancellor is setting out his autumn statement and his plans for the economy.
According to the government’s own figures, the government will borrow £100 billion more over the next five years than it predicted when the Tory-Lib Dem coalition was formed after the general election last year. The reason for this massive increase in borrowing is that growth has ground to a halt.
In the early part of 2010, while Labour was still in power, the economy was growing as a result of measures which Labour took in government such as a temporary cut in VAT. The growth started to slow down when the new government was formed. Consumer and business confidence both collapsed the moment that the chancellor, George Osborne claimed that the country was facing bankruptcy.
It was clear at the time that the chancellor’s comments were unwise. Eighteen months later it is also clear that the chancellor undermined confidence. When businesses lack confidence, they are less likely to recruit staff or to invest in growing their businesses. Similarly people are less likely to spend money if they lack confidence about the economy. The chancellor should accept that in both his comments in May 2010 and in the policies which he introduced he has made the economic conditions in the UK worse, all of which led to higher unemployment and increased pressure on families.
He set out a plan in May 2010 to cut the deficit faster than any other country and faster than at any time in history. Unfortunately, the speed of the cuts and the doom and gloom, which the Tory-Lib Dem government spread when they were elected mean that the deficit has actually grown as a result of the cuts not shrunk. History shows us that the deficit can be cut but only if the economy grows. A growing economy means more people in work, paying more taxes. What we have now is more people out of work costing more in benefits and paying less in tax.
The government needs a plan B, which helps business to create jobs and which helps the economy to grow. Otherwise, the deficit will continue to grow and more people will lose their jobs and quite possibly their homes too.
This is a really worrying time for families, struggling with higher food prices and gas bills and worried about their jobs and their children’s futures. That’s why Labour has set out a clear five-point plan for jobs, to help struggling families and support small businesses. The plan is for growth and has the backing of business and international financial organisations.
The plan is:
A £2 billion tax on bank bonuses to fund 100,000 jobs for young people - which they would be required to take up - and build 25,000 more affordable homes.
Bringing forward long-term investment projects schools, roads and transport - to get people back to work and strengthen our economy for the future.
Reversing January's damaging VAT rise now for a temporary period - a £450 boost for a couple with children - immediate help for our high streets and for struggling families and pensioners.
A one year cut in VAT to 5% on home improvements, repairs and maintenance - to help homeowners and small businesses.
A one year national insurance tax break for every small firm which takes on extra workers - helping small businesses to grow and create jobs.
The Government has announced a new scheme for young people who are out of work. But you have to ask why they scrapped Labour’s Future Jobs Fund, when they were elected last year. The Future Jobs Fund guaranteed all young people a job for 6 months. It took 18 months and youth unemployment to go over 1 million for the government to reinstate part of the scheme. But the new scheme does not go as far as the old scheme as it has no guarantee for young people and is only part funded as employers have to pay most of the costs. That means that businesses which are struggling will not be able to take part, to offer jobs to young people or to benefit from the scheme.
It is a national tragedy that this Government left young people desperate for work on their own with no real help for 18 months. The Tories killed the future jobs fund and young people have paid a brutal price for this, with youth unemployment hitting a million and long term youth unemployment up 83 per cent this year. The scrapping of EMA and trebling of tuition fees have hit young people too. Young people are bearing the brunt of the government’s failed policies.
And if the Government is slashing working families' tax credits to pay the bill for a new scheme, it beggars belief. That tells you everything you need to know about how out of touch the Government is with the needs of our young people and squeezed middle families across Britain. Labour’s five point plan for jobs includes a jobs fund that would create 100 000 jobs, but it would be paid for by a tax on bankers’ bonuses.