'Nation's debt costs public sector jobs'
Dec 1 2008 by Adrian Pearson, The Journal
A LEADING Conservative MP has warned the North East the real impact of the Government’s emergency budget will be seen in public sector job losses, a £43bn share of the nation’s debt and an extra 300,000 facing increased tax bills.
The Tories claim a detailed look at the Chancellor Pre-Budget Report reveals a “huge long-term burden” to the region.
Shadow Treasury minister Philip Hammond warned the region that the Government’s £5bn worth of “efficiency savings” will mostly come form job cuts in the public sector, a move which would have a devastating impact in the North.
Labour MP Nick Brown last night said the Conservatives had failed to show any plan which would ease the impact of the economic downturn.
Last month’s PBR introduced plans to borrow money in order to pay for Government spending during a recession, which the Tories claim will hit £1 trillion by 2013.
And diving the sums by head of population, they belive North East taxpayers will have to shoulder £43bn of this national burden.
Mr Hammond said: “The families and businesses of the North East are being saddled with a staggering bill to pay their share of Brown’s Borrowing Bombshell.”
The PBR also announced a series of tax changes which Conservatives believe will lead to 300,000 people in the region paying out slightly more in taxes.
“These figures are far, far worse than anyone expected,” said Mr Hammond. “One of the biggest problems is that people are not spending and a 2.5% reduction in VAT is not going to help that.
“We are seeing additional borrowing for a short-term tax cut. It is not borrowing for the public sector spending plans, for the infrastructure work.
“We have looked at the report, there is no spending programme.
“And on top of that the Government has dramatically downgraded future spending growth to 1.1% in real terms.
“That comes on top of £5bn worth of efficiency savings which are job cuts. That is what he announced on Monday.”
Minister for the North East Nick Brown has rubbished Mr Hammond’s claims and accused the Tories of putting jobs at risk.
Mr Brown said: “A substantial amount has been done and is being done to help small businesses.
“We all know the Conservatives are offering nothing but criticism, they have no plan to get the economy moving. We have said we need to borrow now to make that happen and pay it back during better times.
“It is a plan that will work well for the North East, a region which knows all too well the terrible effects of mass unemployment, a threat the Government is determined we will not have to face again.
“If we simply sit back and do nothing, which is what the Conservatives propose, we will see a return to those days.”
The Conservatives have insisted they have a credible plan to kick-start the economy, including calls for the Government to guarantee small business loans.
Mr Hammond said: “We need to make it easier for businesses to get through this. If you are unsure about wether or not your job is safe you will not spend more you save money. So what is vital is that we make it easier for businesses to get access to the funds they need to see their way through this.”
