One Nation Labour must avoid Britain’s ‘lost decade’

February 7, 2013 3:30 pm

The Government was proclaiming recently that the economy was ‘healing’ given the recent improvement in unemployment figures and the fall in the number of JSA claimants.

David Cameron said ‘the good news would keep coming’ only to be swiftly poleaxed by Vince Cable who warned, “There is a real worry about [the possibility of a lost decade], a real risk of that.”

The recent indicators show Britain maybe heading for a Japanese style ‘lost decade,’ which was plagued by sluggish economic growth. Latest Office of Budget Responsibility (OBR) forecasts have downgraded the UK’s economy. For 2013 the economy will grow by only 1.2% – down from the previous projection of 2%. The forecast for 2014 puts the UK’s growth at 2% from the previous projection of 2.7%

Even the unemployment figures are contradictory. The latest labour market statistics show the UK unemployment rate went down by 0.1 per cent from September to November compared to the previous three months. The data also shows unemployment falling by 37,000 for the same period and the number of people claiming Jobseeker’s Allowance (JSA) dropping by 12,100. However, in areas of need and high deprivation such as Brent, the opposite is happening. From September to November there were 30,000 people out of work in the borough, which is an increase of 1% compared to the three months from June to August.

I recently hosted a discussion with Rachel Reeves and local businesses in Brent about how Britain can avoid its own ‘lost decade.’

A One-Nation Labour economy would include a plan for jobs and growth including a temporary VAT cut, a national insurance holiday for small firms taking on extra workers and investment in infrastructure and affordable housing. It will also showcase the long-term reforms needed to make the economy stronger, such as proper reforms to our banks to boost lending to small and medium sized businesses.

In Brent we are introducing a range of innovative initiatives to help the local economy such as the award winning Supply Chain Project, which matches construction and employment opportunities with local businesses and residents.

The Chancellor and his rather quiet Lib Dem sidekick Danny Alexander seem to be wedded to their ‘Plan A’ course of action despite the lack of growth and economic progress. GDP figures for the last quarter showed the economy dipped by 0.3%. Even some of the chancellor’s previous backers have urged him to change course. Jim O’Neill, chairman of Goldman Sachs Asset Management, said, “The policy has been on the wrong path.”

The Government’s rapid pace of spending cuts is choking off any chances of an economic recovery. The drastic austerity measures have produced a flatlining economy that is on the verge of a triple-dip recession and is infested with higher borrowing and public debt.

Labour’s challenge will be to continue to keep employment as a priority. It will also need to stimulate the economy through increasing demand and getting households to spend again, but this time without the performance-enhancing drug of credit finance.

Latest

  • Comment Labour could lose out by not making it’s stance on Trident clear

    Labour could lose out by not making it’s stance on Trident clear

    Cutting Trident will be the price of support in a hung parliament. That’s the news reported from a meeting of the SNP, Plaid Cymru and Green leaders this week. With Labour’s slim lead and the SNP and Green vote threatening to impact on its share, this is a serious issue. Labour’s policy clearly states, ‘Labour has said that we are committed to a minimum, credible independent nuclear deterrent, delivered through a Continuous At-Sea Deterrent. It would require a clear body […]

    Read more →
  • Comment Featured Is Cameron “frit” of TV debates? Let’s try the empty chair threat

    Is Cameron “frit” of TV debates? Let’s try the empty chair threat

    Lord Ashcroft has told him he shouldn’t have done it in 2010. Lynton Crosby has told him not to do it in 2015. It’s no surprise that David Cameron is trying to wriggle out of televised leader debates during the General Election – even though he has said he is willing to take part “in principle”. Time perhaps to dust off one of Margaret Thatcher’s favourite barbs “He’s frit.” Neil Kinnock tried it in 1992 to try to goad John Major into […]

    Read more →
  • Comment Flexibility makes for good work, strong families and thriving communities

    Flexibility makes for good work, strong families and thriving communities

    By Stephen Timms MP and Ian Murray MP The Christmas period reminds us that modern life can be busy, hurried and demanding. The pressures of work, demands of family life and hectic Christmas schedules can prove stretching as we juggle competing demands. Increasingly the need for flexible work is driven by the complex shape of people’s lives; as parents go to work, struggle to make ends meet, perform career roles, take their children to school and activities and try and carve […]

    Read more →
  • News Labour MP questions campaigning roles of publicly funded advisers

    Labour MP questions campaigning roles of publicly funded advisers

    As the start of the long campaign begins today, curbing the amount of money parties can spend between now and May 7th, Labour MP Jon Ashworth has sought to clarify what precautions are being taken to ensure publicly-funded government advisers are not using their time campaigning. Ashworth has sent a letter to senior civil servant Jeremy Heywood, asking him to answer a number of questions about what kind of campaigning activity was permitted and undertaken by special advisers (SpAds) in […]

    Read more →
  • News Berger asks Twitter to do more to stop use of racist words

    Berger asks Twitter to do more to stop use of racist words

    Luciana Berger, Shadow Minister for Public Health, has called on Twitter to do more the stop racist terms being used on the site. Berger has herself faced a large amount of anti-semitic abuse on the site, and in October Garron Helm  was jailed for sending her a torrent of anti-semitic messages. Berger told the Telegraph (£): “At the height of the abuse, the police said I was the subject of 2,500 hate messages in the space of three days using […]

    Read more →