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Saturday 17th March 2012 | 19:44
Ahead of Wednesday's Budget please see below Ed Balls' article in tomorrow's Sunday Mirror. Ed will also be on the Andrew Marr Show tomorrow morning.
“We will put fuel into the tank of the British economy.”
That was the Chancellor George Osborne’s pledge in last year’s Budget – to get the economy motoring and keep petrol prices down.
But since then our economy has stalled, while countries like America race ahead.
Unemployment rose to a 17-year high this week, with women and young people hardest hit.
And to pay for this economic failure the government is set to borrow an extra £158 billion. Raising taxes and cutting spending too far and too fast has backfired.
Even though one million young people are now out of work, all David Cameron and George Osborne seem to be arguing about this weekend is whether they can get away with cutting taxes for those earning over £150,000.
Surely they cannot be serious? It may go down well with their friends, but how can this be the right priority when people on middle and low incomes are being squeezed by higher VAT, cuts to tax credits and soaring petrol prices. What planet are they living on?
So with the economy stuck on the hard shoulder and families under pressure, this week’s Budget needs to pass two tests – on jobs and on fairness.
We need a plan for jobs and growth, because to get the deficit down we have to get businesses growing and more people off benefit and into work.
Rather than tax cuts for the richest, Labour has different priorities. The first line of a Labour Budget next week would be a fully costed policy to guarantee a job for every young person out of work for more than a year - a job they would have to take up, funded by a tax on bank bonuses.
Our jobs plan also includes tax breaks for small firms taking on extra workers and fair tax cuts to jump-start the economy. A temporary VAT cut is the quickest and fairest way to do this, because it will help pensioners and those on lower incomes who won’t gain a penny from Nick Clegg’s policy of increasing the income tax personal allowance.
As well as a jobs plan there have to be tough decisions on tax, spending and pay to help get the deficit down. But they must be done fairly.
While the banks are getting a tax cut this year, a family with children are set to lose an average of £530 a year from next month.
And the government’s unfair and perverse changes to tax credits will mean thousands of working parents will be £73 per week worse off – and better off if they quit work.
This tax credits bombshell for working parents can and should be stopped.
And it can be done by reversing the £1.6 billion pensions tax cut George Osborne has already given to people on over £150,000.
Last year the Chancellor put the wrong type of fuel into the tank. In this year’s Budget he needs to get us back on the road to recovery.