The Economy

VAT is up, wages are frozen, hours are falling and real standards of living are sinking fast. It is certainly hurting, but it does not seem to be working. The Government's choice to put deficit reduction above every other consideration means that, one year on, they have developed no credible strategy for growth and jobs. All the important economic indicators are warning that the British economy is moving in the wrong direction. The Chancellor's irresponsible scaremongering about bankruptcy and his reckless decision to compare us to Greece talked consumer confidence down to a 20-year low in January. Inflation, which was falling last year, is now more than twice the Bank of England target and the third highest in the OECD. Unemployment is set to be 200,000 higher than predicted in every year of this Parliament, with youth unemployment blighting one in five of all our young people. Despite all of the talk of being a pro-growth Government, the truth is that growth forecasts have been downgraded, thanks to his choices, again and again and again. Things were getting better when we left office, but after a year of the present Chancellor and his political choices, they are getting worse. He has created a vicious circle in the British economy. He has put this country into the economic slow lane. By choosing to cut too far, too fast many more people are out of work, claiming benefits and not paying taxes. As a result, the Government have to borrow £46 billion more in the coming years than they expected only last autumn. We on the Opposition Benches warned the Chancellor last year that huge and rapid cuts in public expenditure risked stifling the economic recovery. We said that his plan to cut billions from public spending last June, when the economy was still fragile, was reckless and irresponsible. Now more people are expressing their doubts about his plan. We have consistently called for a steadier and more balanced approach to reducing the deficit, but instead this ideologically blinkered and arrogant Government continue to claim that there is no alternative. This is irresponsible, it is complacent and it risks putting a permanent dent in our future prosperity.