In 2010 George Osborne set out his plan to rescue the UK’s economy, but this week we’ll once again see his failure laid bare. He told the country he would balance the books in this parliament, but his failure to get the economy moving again means that whoever is in government after May 2015 will inherit a deficit of over £90 billion.
By Margaret Curran, shadow secretary of state for Scotland, and Owen Smith, shadow secretary of state for Wales
In 2010 George Osborne set out his plan to rescue the UK’s economy, but this week we’ll once again see his failure laid bare. He told the country he would balance the books in this parliament, but his failure to get the economy moving again means that whoever is in government after May 2015 will inherit a deficit of over £90 billion.
Faced with such a difficult legacy, an incoming Labour government will need an iron discipline on public spending, combined with a bold plan for growth that gets people back to work and tackles the crisis in living standards across the country.
There are still two years to go before this parliament has run its course, and the coalition should listen to the voices from the IMF and others who back Labour’s call for a change in direction now that would create jobs and strengthen our economy for the long-term through a proper plan for investment in infrastructure, this year and next.
There’s also still time to listen to Labour and make sure the decisions that are taken ensure that those with broadest shoulders take the strain, and that the books aren’t balanced on the backs of the poorest. So instead of a Tory giveaway for millionaires, we’d be re-introducing a starting rate of tax to help low and middle income earners.
For many of us, we’ve been here before. In Scotland and Wales, just as in many parts of England, we still bear the scars of the last recession and Mrs Thatcher’s failed economic policies. And although Labour was the party of devolution before 1979, the events of the 1980s only made the case stronger. Those of us who campaigned for the Scottish parliament and Welsh assembly wanted institutions that could be relied on to protect our people if times were tough again.
The lesson, so far, from this downturn is that it’s not just devolved institutions – but devolved institutions in Labour hands – that make the difference.
In Wales, Carwyn Jones and his government have grasped this, and have prioritised investment in infrastructure and housing, support for the next generation through raising education standards and action on unemployment through the ground-breaking Jobs Growth Wales programme.
This has created 6,000 additional jobs, with four in five young people staying on in work after the initial six months, in sharp contrast to the dismal performance of the UK government’s Work Programme.
But with its capital budget slashed by a quarter, the Welsh government is struggling to make the level of investment in infrastructure that Wales needs. The Silk Commission, set up by the coalition to examine the devolution settlement, recommended that Wales be given borrowing powers and control over a number of taxes, ending the anomaly in which the Welsh assembly is the only elected body in the country unable to borrow to invest.
In the face of deliberate stalling from an ambivalent Wales Office, Osborne should choose to put good economics ahead of party politics and give the Welsh Government the tools it needs to boost the economy of Wales.
In Scotland, the SNP’s incoherent economic policy means there is a different story. Budget after budget since 2010, the SNP have told us that their ‘Plan McB’ means that infrastructure spending would be directed towards “shovel ready projects”.
However, construction has failed to materialise in the communities where it was promised, and in one key area for the construction sector – housing – we’ve witnessed activity fall to the lowest level since the Great Depression, not helped by the SNP’s 8 per cent cut to the housing budget in the last year alone.
Meanwhile, when the SNP are faced with tough questions about Scotland’s financial future (both in the event of separation or just after the next scheduled set of Scottish parliament elections), they turn the other way and refuse to tell Scots how they would deal with Scotland’s deficit. On one occasion, even going as far as suggesting they would simply default on Scotland’s debts if they didn’t get their way on Scotland retaining Sterling.
Labour in Wales and the SNP in Scotland have chosen two different paths. Carwyn Jones has shown how setting out to use government as a tool to change lives can really make a difference, even in straightened times. But Salmond and Sturgeon at Holyrood have prioritised their constitutional project – Scotland is on pause at the time when we need devolution to be working at full force.
In such difficult times as these, Labour’s One Nation vision is needed more than ever, rather than a nationalist mantra that would tear Britain apart.
As the only party that has a footprint across Britain, Labour is the only Party that has an interest in making the UK – and all our devolved institutions – work for everyone. That’s why when we talk about One Nation, devolution is central to that: because it means that the nations of the UK have the ability to play a big part and shape their contribution in getting the whole country back on track.
And while difference is what devolution is all about, Labour’s message across the country is the same – that we urgently need a change of direction and a recovery made by the many. A change that gets us out of the ideological cul-de-sac that both the Tories and the Nationalists have got us in to, and offers real and realistic hope to people in Scotland, Wales and across the UK.
Change that is only ever delivered by Labour governments.
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11 Responses to “An incoming Labour government will need an iron discipline on public spending and a bold plan for growth”
LB
So lets see. Argentina – meets your criteria – bust
Russia – meets your criteria – also defaulted.
Italy, France in the past have all done the same,
Zimbabwe likewise.
You are bankrupt if you cannot meet your obligations.
There are two tests for bankruptcy.
1. In ability to meet cashflows as they fall due.
2. Assets < liabilities and no possibility of a recovery.
The UK does not yet meet test 1. However test 2 has been met for a long time.
The reason you do not know this is that the largest debts have been omitted deliberately from the accounts.