---

Economic Growth and Employment

I beg to move,"That this House notes with concern that UK economic growth is flatlining and was choked off well before the recent Eurozone crisis, that youth unemployment is now more than one million and that Government borrowing is therefore expected to be £46 billion higher than forecast over the Parliament; further notes with regret that the Government has failed to deliver a credible growth plan, is undermining critical industries in which the UK must compete, is failing to use strategically procurement and other tools to drive growth and innovation, and is holding back regional growth with its flagship projects mired in inertia and with most business still waiting for Regional Growth Fund money seven months after the recipients were announced; therefore calls on the Government to deliver a growth plan that provides an immediate boost to the economy to increase demand and growth, including a £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 more affordable homes; and further calls on the Government to bring forward long-term investment projects to get people back to work, to reverse the damaging VAT rise of January 2011 for a temporary period giving families a £450 boost and providing immediate help for the UK's high streets, to provide a one-year cut in VAT to five per cent. on home improvements, repairs and maintenance to help home owners and small businesses, and to provide a one-year national insurance tax break for small firms to help them grow and create jobs." In his Conservative party conference speech last October, the Chancellor said he would stick to his plan to cut faster than any other Chancellor in our history, regardless of the consequences, because, he said, it was necessary to put our economy on a sound footing. With reference to the Business Secretary he said:"““Together, Vince and I have started to open Britain for business.””" A year later, what do we find? The economy has grown by just 0.5% in the past 12 months. This compares with growth of 1.5% in the US over the same period and is significantly down from the 2.6% growth in the previous 12 months, thanks to the measures taken by the Labour Government. Have the Chancellor and the Business Secretary opened Britain for business? The figures tell a different story. The number of UK enterprises fell by 20,000 in the year to March 2011, with decreases in business numbers in every region except London and Scotland, and business confidence nose-dived following the announcement of the Chancellor's spending review. What effect is this having on the people of this country? More than 2.6 million people are out of work, the highest rate in 17 years. More than 1 million young people are now out of work, the highest since comparable records began in 1992. Let me be clear: these are not our statistics. They are those of the Office for National Statistics. They are the facts. How have the Government responded to the facts? Last week, when we learned of the youth unemployment figures, the Prime Minister and the Chancellor were nowhere to be seen. Instead, the Minister with responsibility for employment took to the airwaves. He told us that the 1 million figure for youth unemployment was ““a distraction.”” The 1 million figure for youth unemployment is not a distraction. It is a disgrace. What a tragic waste of talent. He not only described the figure of 1 million as a distraction, but attempted to blame it on the eurozone crisis. Does he really think that the British people will fall for that? In fairness to the Business Secretary, when the figures came out his unofficial spokesperson, the noble Lord Oakeshott, told The Guardian:"““It's ridiculous to blame this rise in unemployment on the crisis in the eurozone. All economists know it's a lagging indicator, so this is the result of what has been happening in our economy over the past year””." I could not put it better myself. Despite that view, the Business Secretary remains resolutely wedded to the Government's economic strategy, however disastrous it is turning out to be. He does so in the name of deficit reduction, yet the independent forecasts published last week show that the Government are projected to borrow, on average, more in each remaining year of this Parliament than we would have done under our more balanced deficit reduction plan. Those are neither the Opposition's figures, nor those published by the Office for National Statistics; the summary of independent forecasts was published last week by the Government themselves. Of course, the Office for Budget Responsibility has already forecast borrowing to be £46 billion higher than previously thought. The evidence is clear: the Government's strategy is not working because reducing borrowing requires growth, which they choked off by cutting spending and raising taxes too far and too fast, and long before the eurozone crisis.