Differences in outlook grow stark

Mar 29 2010 by Kevin Rowan, The Journal

LAST week's Budget was the latest in a series of ‘last chances’ the Labour government has had to convince the voting public it is still the right party to lead the country.

This could have been one of the most difficult moments in Alistair Darling’s political career; the future of his party was riding on which rabbits he might pull out of his little red box.

In fact, it was a fairly straightforward analysis. The critical ambition for the Government is to not harm the very modest and painfully gradual route to economic growth everyone can see happening, even if not everyone is yet feeling the benefits of it. The clear evidence demonstrates that the impact of the last recession, in terms of business failure, unemployment or house repossessions, has been significantly mitigated by public spending investment.

To avoid further damage to the economy it would be logical then to seek to maintain that public investment, within prudent fiscal guidelines, as high and as long as possible without risking international monetary paralysis. This Budget has done that.

It is perhaps the way public sector investment has been targeted in this Budget that is most creative and helpful to the recovery. The significant establishment of a ‘Green Investment Bank’ could be instrumental in ensuring the UK’s pole position in that fast growing sector, with clear benefits for the North East. Young workers have been severely hit by the recession and extending the particular features of the ‘young person’s guarantee’ to at least 2012 will make a huge difference to the next generation of workers – something that the Conservatives have said they will not fund.

Delaying public spending cuts is the right thing to do. The best way to get the public borrowing requirement down is to grow the economy. In the absence of private sector investment, it is the role of the public sector to step in until there is sufficient, steady and sustainable economic growth. The benefits of so doing are clear, more businesses surviving, fewer people losing their jobs, more keeping their homes.

That’s a big difference between political choices in my book.

Kevin Rowan is regional secretary of Northern TUC