It’s terrible to say I told you so. It’s smug, and when matters take a turn for the worse, it doesn’t fix the problem one bit. But today, with the Office for National Statistics publishing the first estimate of 2011 third quarter growth as 0.5 per cent, there are many of us in the Labour ranks who will not be able to resist telling the chancellor we knew he was getting the economy wrong.
Let’s recap some facts:
1. Under Labour, we kept people in work through the downturn than in previous recessions, whereas the 2.57 million unemployed represent the largest number without work since 1994 – the time when the UK last had to escape a Tory recession.
2. Ed Balls told the chancellor last year that if he cut too far too fast, the growth wouldn’t come: From Ed’s speech at Bloomberg, August 2010: ‘By ripping away the foundations of growth and jobs in Britain David Cameron, Nick Clegg and George Osborne are not only leaving us badly exposed to the new economic storm that is coming, but are undermining the very goals of market stability and deficit reduction which their policies are designed to achieve.’
3. And the economy has flatlined: The OBR has been forced to downgrade growth predictions for this year and next given the chancellor’s performance. Today’s growth figure is yet more evidence Osborne has got the economy wrong.
But before we start to pat ourselves on the back, let’s all remember that political pointscoring won’t fix the economic problem we face. As I’ve written before, it’s young people in particular who are being most harmed by this absence of growth. They deserve better than that from us.
So what can be done?
The government doesn’t have the answers. Yesterday, no doubt in anticipation of the poor growth figures today, the prime minister wrote for the Financial Times, hailing the economic virtues of the UK, saying our natural qualities – our language and our timezone – would pull us through. In a slightly bizarre U-turn, Nick Clegg went to visit the once-maligned Sheffield Forgemasters telling the media he was now in charge of the regional growth fund. This now seems to be the best the government has to offer: English language, Greenwich Meantime, and, at the eleventh hour, long-awaited but limited investment.
Look back at this list from Osborne’s June emergency budget. Recall how the cancellation of these sources of government investment have harmed our economic prospects. These were the cuts that were too far too fast. These cuts slammed the brakes on; just Labour’s recovery was being secured.
Think of the impact of each individual cut. Take just the small investment in the Stonehenge Visitor Centre, for example. Dealt a blow in June 2010 when government funding was withdrawn, lottery cash came to the rescue at the end of the year. But still, that project has now been delayed unnecessarily six months and project development funds that could have been circulating round the southwest economy were not.
In my own constituency, £2.3m that had been committed to turn a landfill site into a riverside park was held back for a year after Osborne’s June 2010 budget. Money that should have been spent in the construction sector has not been. There are hundreds of projects like this held up, delayed or permanently cancelled. The net result: contracts with businesses cancelled, confidence down, little or no growth.
So, it’s up to Labour campaigners to hit the doorsteps and give people some hope. Ed Balls has driven forward a vision of strategic changes to the UK economic plan that can offer short term impact and long term gain.
I’m convinced most people know a young person without a job. So we need to talk about a £2bn tax on bankers’ bonuses to fund 100,000 jobs to get those young people to work. We need to be clear about the damage done by the Osborne slowdown, and campaign for the infrastructure our towns need to succeed. And because many people would like to respond to the current tough labour market by growing their small business, we should back them with Ed Balls’ plan for a one-year national insurance tax break for every small firm which takes on extra workers.
Ed Miliband rightly said last year that it was a time for humility and to listen to people. Of course, he was right. But I think the public need more than that from us now. They need hope for the future, and a plan to get the economy moving. We were right about the cuts. Now let’s show we’re right about the future.
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Alison McGovern is MP for Wirral South
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