With our stalled economy now in reverse, unemployment soaring, and £158 billion extra borrowing to pay for this economic failure, the case for a change of course and a real plan for jobs and growth in next month’s Budget is growing by the day.
These revised figures show that the economy grew even less than we thought in 2011. Since George Osborne’s spending review the economy has grown by just 0.2% compared to the 3.0% the government predicted. And far from the eurozone crisis being to blame, only rising exports kept us out of recession last year.
In the USA, where the government has taken a more balanced and steady approach to deficit reduction, their economy has more than recovered all the output lost in the global recession, while in Britain we are still almost 4% below our pre-crisis peak.
Of course we need tough decisions on spending, tax and pay, but David Cameron and George Osborne’s economic gamble – tax rises and spending cuts that go too far and too fast – has backfired badly. Rising unemployment and slow growth means the government is set to borrow billions more than planned and will break its promise to balance the books by 2015. As even Standard and Poor’s has said, ‘austerity alone is self-defeating’.
To get the deficit down in a fairer, better way we need to get the economy moving again and get people off the dole and into work. Labour’s five point plan for jobs includes tax breaks for small firms taking on extra workers, bringing forward infrastructure investment, a bank bonus tax to fund 100,000 youth jobs and a temporary cut in VAT.
The economy will eventually recover, but a prolonged period of weak growth and high unemployment cannot be quickly undone and will cause long-term damage to Britain’s economy. That is why it’s so vital that this out of touch Chancellor breaks out of his complacency and accepts his policies aren’t working.
For the sake of hard-pressed families, pensioners, young people and businesses, George Osborne needs to listen and use next month’s Budget to change course. It’s his last chance to make a difference to our economic prospects this year and next.