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 Government is broken – Labour need to use the digital revolution

    Government is broken – Labour need to use the digital revolution

    People are shut out of government and they know it. Government is broken. The British state is not fit for purpose. They both need a radical re-design. I’ve been running Labour’s policy review and we asked two fundamental questions. What do we want government to do? And what role can digital technology play in creating a government that will better serve our country? The answers were pretty simple. We need a new way of governing our country that gives British […]

    Read more →
  • News It’s “unbelieveable” Cameron has recommended Lansley for top UN job, say Labour

    It’s “unbelieveable” Cameron has recommended Lansley for top UN job, say Labour

    It’s rumoured that David Cameron has recommended former health secretary Andrew Lansley for a senior position in the UN. When health secretary – before he was replaced by Jeremy Hunt in 2012 – it was Lansley who oversaw the Government’s extremely controversial Health and Social Care Act 2012. He then became Leader of the House of Commons before being replaced by William Hague, meaning Lansley is no longer in the cabinet. He also announced that he would be standing down […]

    Read more →
  • Comment Politics after the Big Machine

    Politics after the Big Machine

    Jawarharlal Nehru, first Prime Minister of independent India was giving a speech in a bus factory. Nehru’s topic was ‘the place of the big machine’. It was 1955, the era of big industrial projects and the centralised state. Perhaps, his audience expected Nehru to celebrate massive mechanisation, to praise the beauty of the gigantic, but it was Gandhi’s birthday, and Gandhi’s argument had always that politics had start with the local and the individual. ‘Perhaps’, Nehru said, ‘the biggest scheme […]

    Read more →
  • Comment My bill to make work pay in Low Wage Britain

    My bill to make work pay in Low Wage Britain

    Today I will be speaking in Parliament on behalf of a woman called Catherine. She lives nearly 200 miles away, far from the Westminster bubble, and she doesn’t have time to take notice of polls or political pundits. But what happens in our politics and the type of government we choose in six months’ time will shape her life more than most. When my name was drawn out of a hat earlier this year, giving me the chance to introduce a […]

    Read more →
  • Featured Scotland Poor result in Rochester and Strood leaves LabourList readers unhappy

    Poor result in Rochester and Strood leaves LabourList readers unhappy

    Well over 1,000 LabourList readers voted in this week’s survey – but that doesn’t make the results any better for Labour. Despite the vast majority of readers correctly predicted a third-place finish in the Rochester and Strood by-election a fortnight ago, a similarly large proportion were disappointed with last week’s result. 52% of people felt that Labour’s performance in the by-election was quite bad, with a further 21% saying they felt it had gone very badly. 20% thought that we […]

    Read more →