From Recession to Recovery
Posted by James Plaskitt, MP for Warwick and Leamington, at 13:20, Fri 29 January 2010:
Britain is now coming out of recession, but we cannot risk any action which could threaten the fragile recovery.
2009 saw Britain enter the most serious economic downturn for years as a result of the global banking crisis. My first priority in the recession was to ensure we helped people and businesses get through it.
So I supported the Government’s £5 billion investment in JobCentre Plus to help people get back to work. The Conservatives opposed every penny of this money. Today, unemployment in Warwick and Leamington is falling, and is still less than half the level of the previous recession in the early 1990s.
I also supported the Government’s Car Scrappage Scheme which has widely been hailed a success, despite misgivings by the Conservatives. I met with several automotive businesspeople locally who told me how this scheme had literally saved their business from going under. More than 20,000 new cars were sold under the scheme in the West Midlands. The scheme helped protect businesses from the worst of the 2009 downturn.
The last quarter results from the end of 2009 also put the downturn into perspective. Despite the recession, more businesses opened in the UK in 2009 than the year before, and the FTSE climbed more than 22%. UK house prices are increasing again, showing that confidence is returning to our economy.
From Recession to Recovery
Now that we have protected British people and businesses from the worst effects of the recession, we can begin to think about how to address the deficit. We entered the recession with one of the lowest national debts of any industrial country. We have repaid more national debt since 1997 than all governments over the previous 50 years.
We have announced a four year plan to halve the deficit over four years by cutting waste and low priority spending, boosting growth and bringing in fair taxes including the new 50p rate for those earning over £150,000 and a levy on bankers’ bonuses.
There will be tough spending choices ahead. But we will not rush into any action which could choke off the help already given to millions of people.
The Conservatives want immediate and deep spending cuts right now. This would sap the lifeblood out of our economy, taking us back into recession. Even if they halved the debt over three years instead of four, they’d need to find an extra £26 billion next year– the equivalent of putting VAT up to 23% or cutting the schools budget in half.
David Cameron likes to tell people that his priority is getting the deficit under control, even if that means cutting public services. Yet at the same time he is still promising to cut inheritance taxes for millionaires – the equivalent of paying £2 billion of public money to the richest 3000 families.
My priority is helping all people fairly through the downturn. I will not support any action which will threaten the recovery here in Warwick and Leamington.
Comments
Commenting on this message is now disabled.
Posted by tim johnson, 13:53, Fri 29 January 2010: (Is this post abusive?) #
Dear James, thank you for you support for employment and business in the constituency. I was interested in your arguement that Labour had cut the national Debt since 1997 as it is commonly argued in the press, and appears to be a generally held view that this government has increased the national debt, sold the gold reserve at rock bottom etc and generally increased spending and so borrowing.How are the Tories getting away with this claim? Kind regards Tim Johnson
Posted by Guy Freeman, 14:15, Fri 29 January 2010: (Is this post abusive?) #
Dear Tim Johnson,
Mr. Plaskitt did not argue that Labour cut debt, because that would be untrue. The national debt has increased massively since 1997, especially since 2007. Please refer to the information here to understand how and why: http://www.economicshelp.org/blog/uk-economy/uk-national-debt/
To compare how the UK's debt has grown more than other rich economies' since 1995, see here: http://www.economist.com/world/international/displaystory.cfm?story_id=15328727
Mr. Plaskitt's claim that more national debt was paid since 1997 than in the previous 50 years is because of the effects of inflation --- the reason why a loaf of bread costs £1 now when in 1960 it was more like a few pence. More debt is taken on which is why more of it is paid back.
The Government did sell some of their gold reserves when the price was low, see: http://www.telegraph.co.uk/news/newstopics/politics/labour/4162054/Gordon-Browns-decision-to-sell-half-of-the-UKs-gold-reserves-cost-UK-5billion.html
None of this is meant to be a criticism of Mr. Plaskitt or the Government in which he serves, but merely an attempt to correct some misconceptions that you, Mr. Johnson, expressed in your comment.
Posted by Doug Thompson, 14:57, Fri 29 January 2010: (Is this post abusive?) #
reduced deficit since 1997!!!!!!!!!!!!!!!!!! Sweet Jesus it was done by selling off the gold at the lowest possible price. It's like saying I paid off my car loan by selling the car and now I haven't got the asset but still half the debt. This government has run the country into the ground by encouraging a culture based in fantasy, spin and a never never life style. the fact that they are now painting themselves as saviours is stomach turning. A change is needed and it's needed now.
Posted by Glenn Gordon, 15:23, Fri 29 January 2010: (Is this post abusive?) #
The recession is by design, deliberate. It is to force us into a global single currency and ultimately a one world government. Peter Mandelson is a known member of the highly secret Bilderberg Group, and pro European Union. I wouldn't be one bit surprised if the recession was born at a Bilderberg meeting. WE MUST FIGHT TO DESTROY ANY FURTHER ATTEMPTS AT A "NEW WORLD ORDER".
Governments MUST issue its own bank notes and abolish the Bank Of England and the US Federal Reserve, bringing down the houses of Rothschild & Rockefeller!!
NO NEW WORLD ORDER!! THE PEOPLE MUST RISE AND TAKE CONTROL!
Posted by James Plaskitt, 16:11, Fri 29 January 2010: (Is this post abusive?) #
Thanks for the links to the interesting articles, Mr Freeman. The Government sold some of the gold in order to buy Euros which has also increased substantially in value and has greater purchasing power with our European trading partners.
But on the issue of debt, the UK entered the recession with the second lowest debt in the G7 - lower than France, Germany, USA, Japan and others. See my article here which explains this: http://www.jamesplaskitt.com/borrowing_can_we_afford_it
The reason we entered the recession with such a low debt is because Gordon Brown as Chancellor paid off the debt that had built up under the Conservatives. As the graph in your link shows, the debt in 2007 was about 35% compared with 43% when Labour entered office. So Labour did cut the debt - substantially - up to 2007.
Since 2007 of course, the debt has increased, as it has done in every single other country around the world. This is because we had to borrow more to provide the extra support to jobs and businesses, and to prop-up the banks. We plan to sell the banks again once they are back on a sound footing, which should recoup a lot (but probably not all) of the money spent on them. Our debt today is still lower than the USA, Germany, France and other G7 countries. According to the IMF our debt will still be lower than these countries in 2014.
The Government could have chosen to keep debt levels low, by not taking any of the action which has kept thousands of people in their homes and jobs, as the Conservatives wanted. But as someone who lived through the consequences of this action in the early 1990s, in my view that would have been fundamentally wrong. This was also the view taken by every other world leader at the G20 conference in London last year, and all the main opposition parties in Europe - except the Conservative party.
So although I am concerned about how we pay off our debts, I firmly believe it was right to take the action to combat the recession. If you have individual queries you do not wish to raise here, please write to me.
PS - There is quite a balanced report on the BBC about the UK's debt compared to other countries here: http://news.bbc.co.uk/1/hi/business/8415703.stm
Posted by Adam Webb, 16:17, Fri 29 January 2010: (Is this post abusive?) #
Dear James,
Could I ask if you are including all the off the book PFI debt That Labour has built up into your calculations?
You also mention that if the Conservatives want to pay half the debt off, they'll need to do the equivelent of raising VAT. Could you clarify what the Labour 4 year plan is and why if this is achievable now, it hasn't been achieved in the last four years?
Could I also request a loaf of bread and some milk when you put in this months unaccountable £400 shopping bill? Super!
Posted by Mr Edmund McConnell, 18:37, Sun 31 January 2010: (Is this post abusive?) #
> Despite the recession, more businesses opened in > the UK in 2009 than the year before,
Meaning what? Is that always a good thing? If one high tech factory closes, makes 100 staff redundant and they start one-man-companies doing cleaning at minimum wage - is that good? Well, there would certainly be more companies.
Don't be ridiculous.
Also, if last year 100 companies closed and 100 opened and this year 800 closed and 200 opened, we've still got a growth in companies opening but less companies in total.
Totally meaningless.
> and the FTSE climbed more than 22%.
yeah, from a historic low.
> UK house prices are increasing again, showing that confidence is returning to our economy.
given that the world-wide economic crisis was triggered by investment in over-inflated property prices, this comment is quite staggeringly and depressingly stupid.
Posted by M. Gray, 22:31, Thu 4 February 2010: (Is this post abusive?) #
Labour - the party of stealth tax and lies. Remember Gordon promising not to raise fuel duty for a year to help hard pressed families, and then in the same year he raised it twice. When I wrote to James to ask why (GB told lies and why duty was increased), he helpfully pointed out it was to ensure tax neutrality when the VAT was reduced. No comment on the lies I'm afraid. Unfortunately, tax neutrality didn't account for much when the VAT went back up in Jan - the government simply kept the increase in duty as well as the VAT on it. Don't you just love being treated like an idiot! It's not all bad though - they managed to recoup some of the £16m pension fund they gave the ex-RBOS chief who presided over the biggest loss in corporate history. Took us into 2 pointless wars ill-equipping our forces each time, and have landed us all the biggest national debt since records began. Ah yes, aren't Labour doing well :-)