Protecting our services...AND sorting deficit
East Ham MP Steve Timms this week gives his take on the economic recovery THIS week I want to set out measures to secure economic recovery and prepare for future growth. We need to continue to support the economy until the recovery is secure. In a recent
East Ham MP Steve Timms this week gives his take on the economic recovery
THIS week I want to set out measures to secure economic recovery and prepare for future growth.
We need to continue to support the economy until the recovery is secure.
In a recent House of Commons debate, Peter Lilley rose from the Conservative back benches. He recalled the occasion in the 1980s when the Conservative government ignored a plea from 264 prominent economists. They pleaded with the Government not to make cuts at that point - but they made the cuts anyway.
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For Peter Lilley, this was a great success because the economy quickly started to grow. For me, Conservative economic management then was a disaster because we ended up with 3.2 million people claiming unemployment benefit.
Tory policies today is just the same. The Tory plan for immediate - but unspecified - spending cuts would be deeply damaging. There is still too much uncertainty in the world economy to withdraw support. Developments in Dubai and Greece have underlined those concerns.
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Together with every other developed country, supporting the economy means borrowing.
It helps that we had a low level of debt going into the recession - the second lowest level of debt (after Canada) of all the G7 countries. Our firm commitment is to halve the deficit over four years and we are putting The Fiscal Responsibility Bill before Parliament for approval, laying down in law our intention.
Doing it over four years, we can deal with the deficit whilst protecting key front line services. We need to safeguard progress since 1997 - in East Ham the number of teachers has gone up by 310. Police numbers in London have increased by nearly 5,500. We will protect the budgets for the health service, schools and the police.
Spending on Sure Start Children's Centres will be maintained in line with inflation and spending on overseas aid will remain on track to reach 0.7 per cent of Gross National Income by 2013.
Government will need to be more efficient. Where we raise taxes, those with the broadest shoulders should make the biggest contribution. Of the tax consolidation measures we have announced, over half the extra will be paid by the best off five per cent.
The Tories argue that the deficit should be reduced sooner. But to bring forward our plans even by one year would require finding an extra �26 billion of cuts in the third year-equivalent to half the schools budget, or a five percentage point increase in VAT.
Our approach is a balanced: the best economic approach for long term stability, and above all, fair.
When the General Election is called, the economy, as usual, will be centre stage.
Last week, I was at a lunch sitting next to Denis Healey. At 93, he was in sparkling form, and talking about his plans for the future. He said he was wanting to write a book on "People I have known".
One of the people he recalled meeting was Joe Stalin! Denis is a remarkable man.