Protecting Recovery
Posted by James Plaskitt, MP for Warwick and Leamington, at 15:46, Fri 26 March 2010:
At last year’s Budget, David Cameron called for immediate cuts to spending. Was he right?
Well, the IMF said he was wrong. So did the Institute of Directors. So did the Nobel Prize-winning economist Paul Krugman. So did the Finance Ministers of all twenty leading economies of the world. So did all the opposition parties in those countries, including Cameron’s allies. Professor David Blanchflower, former member of the Bank of England’s Policy Committee, warned that Cameron’s policies could push unemployment beyond 5 million. President Obama called Cameron a “lightweight”.
Fortunately, we didn’t take David Cameron’s advice. Labour supported the economy by investing in growth, not cutting back.
One year on, and the results speak for themselves. VAT receipts were £3 billion higher despite the cut to 15%, car sales were up 30%, income tax receipts were higher despite the loss of some jobs, and company profits resulted in higher corporate tax revenues. Our policies got the economy moving again. Borrowing is £100 billion lower over the forecast period, and growth is better than expected. Our international credit rating is intact. We’ve spent less on unemployment benefit because our support for jobs is working. Unemployment is falling and is still lower than when Labour entered government in 1997.
This is the difference between Labour and the Tories. We will secure the recovery by investing in growth. The Tories are obsessed with immediately cutting back on spending. Today’s figures show that our approach has been proved right, and theirs is still wrong.
CUTTING THE DEFICIT FAIRLY
We will halve the budget deficit over the next four years. We will do this by making some savings in spending, by increasing some taxes and by continuing to support growth. But we will do this fairly – we won’t be cutting back on essential services, and we will ask the wealthiest in society to bare the biggest burden of tax increases. Two-thirds of the tax rises announced are levied on the top 5% of earners.
The tax on banking bonuses, announced last November, has already raised over £2 billion – double the predicted amount. The new 50% rate of tax on top earners will take effect next month. The 1p increase in National Insurance contributions will not affect anyone earning up to £20,000. We will help first-time buyers get on the housing ladder by abolishing stamp duty for cheaper properties, funded by increasing stamp duty on million-pound homes. Current income tax rates and tax-free personal allowances will not be changed. In all, 60% of new tax revenues will come from the top 5% of earners.
Our budget savings will start in Whitehall. We will make savings of £20 billion by cutting consultants and quangos, trimming senior civil service pay packets, putting public pensions into line with private pensions, moving one third of Whitehall jobs out of London to less expensive offices in areas which need jobs, more efficient procurement and selling unused assets.
We are also closing down tax loopholes both here in the UK and internationally. We’ve signed agreements with tax havens which will ensure that we get an extra £500 million every year in tax receipts.
The taxpayer has received over £8 billion in fees and charges from the banks for the bailout. We will sell our stakes in RBS and Lloyds when the price is right for the taxpayer. Already, Lloyds is predicting a return to profitability later this year. Until then, we are requiring taxpayer-owned banks to increase their business lending to £94 billion, and we’ve created a complaints service with legal powers for any business who feels they have been unfairly denied credit.
We won’t make cuts to essential services – that would kill off the fragile recovery. But David Cameron has already announced his priorities. He wants to give a £200,000 tax break to the wealthiest 3000 families in the country by cutting inheritance tax. But he wants to limit Child Tax Credits and Child Trust Funds. He won’t commit to keep the Education Maintenance Allowance, which helps 600,000 youngsters stay on at school. He wants to limit access to SureStart children’s centres. And he won’t match our guarantee to give young people a job or training if they are unable to find work.
Are Cameron’s priorities your priorities?
There is more to do and we are a long way from full recovery. But we face a choice: keeping support for the economy in place, and paying for it fairly over the next four years. Or cutting back on support now, leaving businesses and families to sink or swim.
In the next few weeks, you will have the chance to decide which course the country should take.
Comments
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Posted by Doug Thompson, 16:30, Fri 26 March 2010: (Is this post abusive?) #
Once again I can’t believe that Labour have been in power all this time and are still behaving like an opposition party. Why can’t you talk about plans and genuine action. How long did it take to get the word cuts actually said. Its is recognised by everyone that efficiency savings won’t be enough and many of the figures quoted were already on the books and relate to previous investment. The fact that Labour won’t talk about specifics until after an election means that they are either A) Scared B) Deceitful C) Hoping it’ll all go away or D) Don’t give a fig as long as they are elected. It is clear that when cuts are made it won’t just be the fat, but also things we use. Treat the public like adults please. Saving the Banks was the right thing to do and one of the few courageous moves, but now Labour are trying to play the them and us nasty Banker game. It is pantomime politics where we hiss at the bad guy. Labour is talking about higher earners whilst moving the boundary of what constitutes higher earning depending on whether its benefits or taxation. All the while the real Politicians claim to be under paid despite falling into their own higher bracket. I just don’t know where to go on this anymore, we are all the unheard majority being fed increasingly insulting lies.
Posted by Brian Jones, 11:11, Sat 27 March 2010: (Is this post abusive?) #
Always what they are going to do and rarely getting around to doing it. We were promised decisive action on expenses swindlers and we are still waiting while the MP's squirm about avoiding payment. How difficult it would be to vote for this party again, they don't even like their own leader.
However at the moment I am not impressed by any of the major parties all the leaders seem to be involved with is photo shoots showing them in caring situations or displaying their spouses like trophies.
Oh for an injection of trust, honesty and integrity into this sewer of sleaze, spin and deception.
Posted by Martin J. Olner, 07:20, Mon 29 March 2010: (Is this post abusive?) #
James - You're a great MP and I think youve done the local community proud. Unfortunately I cannot stand the back stabbing, arrogant, smug Gordon Brown any longer.
He talks down to everyone he comes into contact with. I wouldnt trust him if I worked with him let alone to run the country on my behalf.
He has destroyed the economy. Ourselves and our children will be paying this debt off for years and years to come.
We live in a "Nanny state" where we are told more and more what to do on simple everyday things and yet Brown seems incapable of sorting important issues like drugs, knife crime, education etc.
This country is in a downward spiral because good people are not able to have effective power to move things in the right direction. The Do-gooders are too easily allowed to stick their oars into everything and yet when we need decesive strong action they run to the hills rather than take the challenge on.
The Goverment is a team. A unit voted in to SERVE the public. Brown is a one man show - Hitler was a one man show. I want a democracy not a dictatorship.
This said - good luck in the election James - you appear to be one of the good ones.
Posted by Mr Edmund McConnell, 19:06, Mon 29 March 2010: (Is this post abusive?) #
"The tax on banking bonuses, announced last November, has already raised over £2 billion – double the predicted amount."
-- so much for your predictions then. 100% out.
Just because it's 100% in your favour doesn't give you any credit. Be accurate, then I might believe your next prediction.