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

7th February, 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.

To report anything from the comment section, please e-mail [email protected]

Latest

  • Featured News Lord Dubs hails Cameron climbdown on child refuges

    Lord Dubs hails Cameron climbdown on child refuges

    Labour today forced David Cameron into a u-turn over his controversial refusal to accept child refugees into Britain. The prime minister has backed down on his previous position – in which he maintained the Government was doing enough for unaccompanied children seeking asylum – to commit to taking more from the continent. With a series of elections fewer than 24 hours away, Cameron capitulated amid pressure from Lord Dubs – himself a former child refugee – and following fears of […]

    Read more →
  • News Labour confirms 18 members suspended in anti-Semitism row

    Labour confirms 18 members suspended in anti-Semitism row

    Labour has confirmed the number of party members suspended in the row over anti-Semitism stands at 18. Since Jeremy Corbyn was elected in September, 18 party members have been suspended over allegations of anti-Jewish prejudice, despite The Telegraph yesterday reporting that the number was around 50. Earlier this week LabourList reported comments from sources that the true number was under 20. The new figure given today is thought to include the two councillors suspended this morning. A Labour spokesperson confirmed […]

    Read more →
  • Comment Featured James Morris: Tomorrow is a test for the anti-austerity movement but Labour must show it is on course for No 10

    James Morris: Tomorrow is a test for the anti-austerity movement but Labour must show it is on course for No 10

      Tomorrow’s elections are the perfect test of Jeremy Corbyn’s theory that anti-austerity politics and mobilising non-voters is the key to winning elections. In Scotland, we have an anti-austerity electorate and in the English local elections, we have millions of habitual non-voters ready to be mobilised. Scots favour slower spending cuts by a margin of two to one, while in England, two thirds of voters stayed home the last time these council seats were up for grabs. When Jeremy Corbyn predicted […]

    Read more →
  • Europe Featured News Defiant Blair says Britain has benefited from European immigration

    Defiant Blair says Britain has benefited from European immigration

    Tony Blair has mounted a defence of his government’s decision to waive temporary controls and allow widespread immigration from Eastern Europe after the expansion of the EU a decade ago. The former prime minister said economic migrants were a net gain for the economy as he explained why he did not use “transitional controls” to limit the amount of immigrants from Eastern European states as they joined the EU in 2004. “Personally, I do not feel that the immigration from eastern Europe […]

    Read more →
  • Featured Local Government News London is at a crossroads, says Sadiq Khan as hopes mount for a Labour victory

    London is at a crossroads, says Sadiq Khan as hopes mount for a Labour victory

    Sadiq Khan today issued a rally cry to Londoners saying the city is at a “crossroads” on the eve of the mayoral election. With less than 24 hours to go, the favourite to become London mayor urged voters to “choose hope over fear” at the ballot box. Using his campaign message “a mayor for all Londoners”, Khan has pledged to freeze transport fares, increase the stock of affordable housing, support the London NHS, and tackle violent crime. He has also […]

    Read more →
Share with your friends










Submit