The Economy

A temporary VAT cut could help kick-start our stalling economy and the Government should certainly consider it until growth returns. Instead of giving the banks a tax cut this year, the Government should repeat the bank bonus tax and use the revenue to create 90,000 youth jobs, build 25,000 much-needed houses and support more regional growth. The Chancellor badly needs to change course. It is not as though the Government are not used to retreating, backsliding, U-turning and executing 180° handbrake turns. They have had enough practice recently. The list is long and growing: decimating school sport in the run-up to the Olympics—abandoned; flogging off our forests—abandoned; ensuring anonymity for rape victims—[Hon. Members: ““Abandoned.””]; reinstating weekly bin collections—[Hon. Members: ““Abandoned.””] Only yesterday in the House after Treasury questions the Government executed two huge policy retreats on their proposals to offer 50% discounts on prison sentences and the massive car crash that is their wasteful top-down reorganisation of the NHS. Their Back Benchers might not like it, but they have learned to live with it. They are even learning to adapt their behaviour to accommodate it. Just look at what some of them are saying on the ConservativeHome website. One said:"““When I get a torrent of emails about a controversial issue now, I leave them for seven days before replying, because there is an increasing chance that the line is going to change.””" Another is being even more sensible. He wrote:"““I let the letters and emails on anything where there is a hint of a U-turn pile up for thirty days. Frankly I don't want to make myself look stupid by defending a policy only for it to change a few days later.””" Another complained that the Whips asked them to write letters defending the Government's reform plans then the next day abandoned them, stating:"““Ten times bitten, eleventh time shy.””" The reason for all these U-turns and policy retreats is that this is a reckless Government who act first and think later. This is a Government who rush to ideological judgments, act recklessly, and cause chaos and then have to retreat, causing uncertainty and waste. That pattern perfectly describes the Chancellor's irresponsible first Budget. His decision to cut too far and too fast set the context of rapid cuts against which so many of the recent U-turns have had to be performed. As the Prime Minister said yesterday:"““Being strong is about being prepared to admit you didn't get everything right the first time””." I could not agree more. It is time for this Chancellor to follow his Prime Minister's example and be strong on the economy. It is time for a plan B.