If George Osborne does one thing in his budget it should be to wean himself of his addiction to austerity and invest in jobs growth.
His call for a “march of the makers” rings ever more hollow as livelihoods are cast adrift and the dole queues lengthen. Stimulus not austerity is the answer. Mere words will not stop the economy from bumping along the bottom, nor lift the threat of recession.
There will be no “march of the makers” as job losses and factory closures mount. Just last week 450 pharmaceutical workers in Newcastle were told they were being made redundant, bringing to an end decades of manufacturing on the site. It is a scene that is replicated across the country week after week. As jobs are lost, spending is squeezed and our high streets become ever more pockmarked with boarded up shops and To Let signs.
As he tucked into his Bison Wellington during a state dinner in Washington last week, the Prime Minister would have done well to ask why the American economy was growing again. He could have picked up a thing or two and brought home an economics lesson for his chancellor.
As our economy languishes in the doldrums, the US’s grows by 2.2 per cent. On the other side of the Atlantic employment is on rise, while Osborne’s addiction propels a lost generation into a lost decade of economic growth.
Stimulus works. We need a strategy for growth with investment in industry and infrastructure. Cutting to the bone and tinkering around the edges, with a few million here and few million there, will do nothing to get the economy growing or boost confidence. Nor will dusting off failed old models of privatisation.
Tax cuts for the rich, while squeezing the middle and clobbering the poor will not deliver the growth the country is desperate for.
We need to be bold and think big. Investing £6bn to build 100,000 extra social and affordable homes would start to tackle the burgeoning housing crisis. It would create new jobs in construction and the supply chain, putting money in people’s pockets to spend on the high street.
Keynes not austerity is the mantra the chancellor should be extolling on Wednesday. We need to look at using our stake in the part-nationalised banks and establish a national investment bank to invest in infrastructure projects in transport and renewable energy.
Manufacturing cannot be allowed to wither on the vine if Osborne is serious about his ‘march of the makers’. The government must learn the lessons of Bombardier and use its purchasing power to secure manufacturing jobs in the UK.
The addiction to austerity is digging us deeper and deeper. It is a hole everyone from the IMF to Moody’s knows that the chancellor should stop digging to avoid the country’s hallowed triple A rating being lost.
With 80 per cent of the cuts yet to come, it is time the chancellor went cold turkey and starting investing in Britain.