Archive for the ‘Labour 5-Point Plan’ Category

Five-Point Plan of Labour for Jobs & Growth

Jeudi, octobre 20th, 2011

Labour in their Five-Point Plan are saying that the Tory-led Government is cutting too far and too fast and risks choking off economic recovery. They say that unemployment is rising again and is currently at the highest level in 17 years. Labour adds that one in five young people are out of work and now more women are unemployed than at any time since 1988.
On this latter point, David Smith writing in his Economic Outlook column in the business section of the Sunday Times of 16 October, comments that we would serve our young people better if we did not give such a bleak picture of youth unemployment. He says that everybody knows that the unemployment figure of 991,000 includes 269,000 full-time students looking for part-time work. Subtracting the latter figure and measuring youth unemployment as a percentage of the youth population as a whole (and as calculated by the Centre for Economic & Social Inclusion), brings the youth unemployment rate down to a still too high but more manageable, 9.9%.
However, David Smith would not reject all five points of the Plan overall, although he considers cutting back VAT to 17.5% a non-starter, presumably because this would entail higher government borrowing (to disturb the credit rating agencies) and/or higher taxes (to stifle growth further) to fill the resulting shortfall in tax income. On the more positive side, he writes that other points such as a one-year national insurance break for small firms hiring new workers, a temporary VAT cut to 5% on home improvements and bringing forward some capital investments, all merit further consideration. Indeed, on the question of capital investment he confesses himself disappointed to see little of this discussed at the recent Conservative Party annual conference. He makes no comment on the first point of the Plan, a populist proposal for a further £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 affordable homes.
Of course, it is much easier for Labour to talk about plans for jobs and growth in isolation from the global economy i.e. when in opposition and not facing the practical realities of the government of a trading nation such as the UK, whose major trading partners - the European Union and the United States - are also struggling to create growth and the associated jobs. It is again rather disingenuous of Labour to talk about temporarily reversing the VAT rise to provide a £450 boost for individual families with children, when a significant part of the growth in the economy presided over by the previous Labour government, was driven by our now over-borrowed consumers spending money to buy goods they couldn’t really afford and, therefore, should have done without at the time.