1.7% growth forecast shows Tory cuts aren't working
14th March 2011
The downgrading of Britain's economic growth forecast in the budget today shows the Tory strategy of deep cuts isn't working, Alan Whitehead has said today.
Alan says:
"The most significant figure in the budget came right at the beginning. This was that the Office for Budget Responsibility, even after factoring in all the measures the chancellor claimed in his budget will stimulate growth, get people in jobs and start new business up has downgraded projected growth by a huge amount to just 1.7% next year. That means a pretty flat economy.
"There is no plan to get Britain moving again, and no plan to put money back into the national coffers from the taxes and national income that growth in the economy brings.
"With unemployment rising substantially, with prices surging ahead and no growth in the economy, we’re in for a pretty rocky year because the chancellor has cut too far too fast, and with no plan for the future.
"That, I’m afraid is the stark message this budget sends out.”
More budget information
Tax & Benefits
In this Budget the Tories have confirmed the banks will get a tax cut this year while 26,705 families in Southampton will see their child benefit frozen and will pay an average extra £450 in VAT this year. Families earning as little as £26,000 are set to lose their tax credits next year too.
Unemployment & Inflation
The VAT rise and cuts which go too deep and too fast are driving up unemployment again and the independent budget watchdog says inflation will be higher and the economy will grow more slowly this year and next. That’s why borrowing will actually be higher after this Budget than before. So these reckless plans will make it much harder to get the deficit down.
Petrol Prices
On petrol prices the government should have gone further in this Budget. Across the south-east the average cost of a litre of unleaded is now 133.6p – up from 122.7p in December before the Tory VAT rise. George Osborne should have listened to Labour and reversed the VAT rise on petrol, which is adding £1.35 to the cost of filling up a 50 litre tank.
The Labour Alternative
Labour has called on George Osbourne to repeat the bank bonus tax this year, and use the proceeds to help young people into work, build thousands of affordable homes and boost business investment. That’s the fair things to do and would help to get our economy moving again and get people into work to help get the deficit down.
Ed Balls MP, Labour’s shadow chancellor, said:
“These cuts are too deep and too fast. Labour would be halving the deficit steadily over four years – not trying to cut it further and faster than any other major economy in the world.
“There have got to be some tough choices to get the deficit down too. But you can’t get the deficit down if the economy isn’t growing strongly and you’re throwing hundreds of thousands of people out of work.
“What we really need is a plan for jobs and growth to help people in Southampton and help get the deficit down. Alan Whitehead and I will be campaigning together for that in Westminster and urging the government to change course.”
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