Ed Miliband held the second of his monthly press conferences this morning – which we reported live (and gave our verdict on) in this morning’s liveblog. Ed opened the press conference with a brief speech which sought to focus on the economy – before being followed by Alan Johnson. You can read Ed’s speech below.
Happy New Year.
Last month at my press conference, I set out the three big arguments for 2011:
on the economy,
on social mobility and the prospects for the next generation
and on the style of politics that is seeing promise after promise broken by both David Cameron and Nick Clegg.
In a moment, Alan Johnson, the Shadow Chancellor, will say more about the first of these arguments and talk specifically about the banks.
Let me set the context.
The biggest difference between the parties on the economy is, as we have said many times, that the government is cutting too far and fast.
We recognise that steps need to be taken to get the deficit down.
That’s why we set out in government a series of tax rises – including changes to pensions tax relief, national insurance and the 50p rate.
And it’s why my front bench are very clear that we won’t oppose every cut this Government makes.
From cuts to support for employer training to cuts in the road programme, from welfare changes around employment support allowance to reductions in legal aid, Labour has shown it is ready to make difficult cuts which we believe are necessary for the long term health of our economy.
But we do believe that their cuts go too far, too fast.
In their politically-motivated desire to propagate a myth about the last Labour government, they are ignoring the real lessons of the global financial crisis.
They claim the deficit was caused by chronic overspending. But, at the outset of the global financial crisis, Britain had the second-lowest debt in the G7; lower than it was under the Tories in 1997 – and we didn’t hear anything from David Cameron and George Osborne about cutting spending then.
It is this deceit about the past that lead David Cameron and George Osborne to make the wrong judgements now.
It matters for our public services and it matters also because forecasters say that Britain is on course for the slowest recovery in 40 years.
David Cameron wants you to believe this would still be a success.
But sluggish growth should not be the benchmark for success.
It wouldn’t just be bad for jobs and livelihoods now, but all the lessons of history are that with lost growth potential for our economy and the waste of unemployment being higher than necessary, it will inflict long-term damage.
It is not just a question of fairness, it is a question about whether this Conservative-led government is making the right long term judgments for our economy.
For months, the government has implied that all they need to do is get the deficit down.
Mr Cameron has said, multiple times, that our economy is out of the danger zone.
Now belatedly, he claims he cares about growth.
Yesterday he said that while 2010 had been about cuts, this year is about ‘growth, growth, growth.’
Labour welcomes Mr Cameron onto the agenda we have been advancing for months.
We have consistently urged him to ensure that our economy will return to the strong growth our country so desperately needs.
But what he doesn’t seem to realise is that the decisions he has made in 2010 run directly contrary to the agenda he claims he wants to pursue in 2011.
If he really cares about growth in our economy, he will have to revisit his entire economic strategy.
First he should not be imposing the VAT rise which is a poorly timed burden on businesses and is putting inflationary pressure into the economy.
It is clear now that squeezing living standards for ordinary families is becoming a central part of this government’s economic strategy. It is not just unfair, it is the wrong economic judgement for the future of our country.
We are seeing from this government a casual attitude to the impact which rising living costs will have on families.
Even before this Conservative-led government put up prices again with its VAT increase, inflation was rising three times faster than wages.
In April, the first wave of cuts to families tax credits will be introduced, further squeezing low and middle income earners.
A government that was in touch with the real world would be doing more to help people through this difficult period and have greater concern for the impact which this will have on consumer confidence.
Second, if Mr Cameron is really concerned about jobs, he should address the dangers of a lost generation of young people.
He should think again about his decision to abandon the Future Jobs Fund and the 100,000 additional jobs it would have offered to young people out of work.
Nearly 1 in 5 young people is unemployed.
The Work and Pensions Select Committee says there is a looming gap in provision for unemployed young people.
The decision to betray young people is not just unfair it is the wrong long-term economic judgement for our country.
Out of work, these young people cost money to the Exchequer and their potential is being wasted.
And we know from the 1980s and 1990s, the dangers of leaving young people without hope and chances.
Third, to help growth and jobs, the government should make good on the strategic support required for industry.
They should bring to an end the eight wasted months since the coalition agreement promised action to help small and medium enterprises with lending from the banks.
And they should make good on firm lending agreements for these enterprises which are the lifeblood of the economy.
They should put right the mistake of excluding small businesses from access to the regional growth fund.
And instead of withdrawing support from leading British firms like Sheffield Forgemasters, they should be making it happen.
To make this support possible, Labour is today calling on the government to put right their decision to make a major tax cut for the banks between last year and this.
Last year Labour’s bonus tax raised 3.5bn from the banks.
This year the government’s levy will raise just 1.25bn.
A huge tax cut for the banks at a time when everyone else is paying more.
This is not just unfair. It is, once again, the wrong economic judgment.
We believe the extension of the bonus tax for another year is not only fairer but also more responsible
That is because we would use the money raised to support economic growth.
Let me just say one final thing.
They have had eight months to come up with a growth strategy and all they can come up with a proposal to make it easier to sack workers.
Here we see two different visions of how to improve Britain’s economy: Labour’s vision of supporting industry to grow our economy and David Cameron’s answer which is simply to increase the insecurity that people already feel at work.
David Cameron is squeezing the living standards of ordinary families, he wants to make it easier for them to be sacked and he is letting the banks off the hook.
It is Labour that is on the side of the many and he is on the side of the few.
And now let me turn to Alan