Crosby Labour councillor Steve McGinnity says increasing numbers of business properties to let on South Road is proof that the Conservative-Lib Dem government's economic policy is not working.
Manor Ward's Cllr McGinnity said he has seen the number of businesses up for let on one small stretch of South Road increase from six to 13 in just one week.
Cllr McGinnity said: "I was in South Road last week and there were six businesses with To Let signs in the window. This week that has gone up by another seven.
"This just shows that businesses are going to the wall with how the Conservative-Liberal Democrat government is managing the economy.
"Insolvency specialists have warned that there could be a dramatic increase in the number of retailers going bust, many of them who are teetering on the edge will find that the forthcoming 20% VAT pushes them over the edge.
"That together with the singeing cuts on public spending means that large parts of this constituency will be disproportionally hard hit. Those hardest hit will not just be the families, the elderly and the individuals in this community, but also businesses right here in Crosby."
Crosby MP Bill Esterson agreed with the Manor Ward Labour councillor saying he fears the number of businesses going under in Crosby could be an indication that the country could be heading for double-dip recession.
He added: "Crosby is acting as a clear barometer for what's happening across the North West. The Labour Party has warned all along that the cuts the Conservative-Lib Dem coalition government could lead us back into recession.
"What we are seeing is a clear indication of just that."