Britain needs a plan B

Originally posted @ 2:04 am, Wed 26th Jan 2011

Such complacency.

Cameron says there is no alternative. Osborne says there is no plan B. Cable says the plan B is already incorporated within the current policy. No scintilla of doubt on show.

Yesterday’s quarterly figures for the economy showed the British economy shrinking by 0.5% and not growing. Plenty are warning that the weather in December may have been responsible for the half a per cent. Some are warning that the survey is an early result and some variation to the result can be expected. Some are pointing out growth in the private sector and in manufacturing (albeit 0.9%). We can but hope that the picture is better than reported.

Certainly we don’t want to knock the confidence any more by predicting a double-dip recession (which technically is classified by 2 consecutive quarters showing the economy shrinking) although Conservatives and Liberal Democrats were quick to say the public finances were akin to Greece in crisis without concern for impact on confidence. But the projections for growth from the Conservative-led government were higher than yesterday’s figures. And they used to hold Ireland’s economic policy up as a model for recovery.

The increase in VAT in January has to cast doubt on the retail sector’s ability to contribute to growth. Cuts in public services will kick in more this quarter because there were some in-year cuts, although the local government sector cuts are most likely to be felt in the second quarter. Rate of increases in prices going up. Unemployment up. Some talk of the stock market again being over-valued. The housing market is stuck.

Surely this warrants serious contemplation from Conservatives and Liberal Democrats? But just why the only way forward have to be cutting £81,000 million from public spending – and creasing taxes by £30,000 million? Businesses, jobs and homes are at stake. People deserve better.

Richard Lambert, the retiring director general of the CBI (the Confederation of British Industry, an organisation seeking to represent United Kingdom businesses) says the government obsession with cutting the deficit has blinded them to the need for a strategy for growth.

Securing the economic recovery was Labour’s, and mine, top political priority at the General Election. Stated time and again in our election material. We predicted that cuts would choke off recovery - http://www.me4sd.com/labour-will-secure-the-recovery-- PriceWaterhouseCoopers predicted that for every job lost in the public sector, a job would be lost in the private sector.

The message was not heard, despite innovations such as TV debates between party leaders (or maybe because of them).

We need ambition for Britain. ConDems are wont to worry about the debt we pass onto future generations, but not the social damage and lack of opportunities that higher unemployment and poverty now will cause.

The kind of ambition shown in agreeing global reflation programmes in 2009 instead of going our separate ways whilst saying they had a nice time together last November.

We need a renewed ambition, and we need a plan B.