Hain blasts slowest economic recovery since records began

Anti-austerity champion Peter Hain has launched a stinging attack on Chancellor George Osborne as figures reveal Britain is struggling through the slowest economic recovery on record.

Data compiled by the Trade Union Congress shows that the British economy has typically grown in size by 16.1% in the first five years after recession – however under George Osborne that number has struggled to reach 8.8%.

This news compounds the Tories economic woes as in January it was revealed that over one quarter of Wales’ working age population is economically inactive.

The Neath MP said, “We have to recognise the utter folly promoted by George Osborne and his Tory austerity addicts. Britain desperately needs growth and their cuts jeopardise the country’s economic security.”

Mr Hain continued: “Between 2010 & 2012 the government made a number of disastrous decisions which seriously harmed the public investment led recovery the last Labour government had started.”

“As the TUC’s research shows, the strongest recovery on record occurred after the Great Depression, when massive public investment helped create jobs, tax receipts and growth.”

In the last quarter of 2014 Britain’s economy grew by just half of a percentage point, much lower than estimates from the Office of Budget Responsibility and City of London had expected, while Britain’s growth prospects for 2015 have also been revised down to just 2.4% in total, after the OBR had initially confidently predicted growth of 3%.

Fears are growing of another recession in Britain as economic indicators are suggesting a general slowdown. Employment in Wales fell by 40,000 over the year from January 2014.

“A vote for a Tory is a vote for economic lunacy in the upcoming election”, said Mr Hain, as he urged Welsh voters to defy the neo-liberal orthodoxy that drastic cuts would balance the British economy.

A graph by the TUC details the average growth of the British economy in the five years after a recession.

Hain warns of Skeleton Services for Local Authorities if magnitude of callous Westminster cuts continues

David Cameron has been warned by Peter Hain that continuing to slash budgets for local authorities will have irreversible consequences and leave Councils with the bare minimum of services. His letter comes as local authorities look to make further savings to plug their budget deficits with Neath Port Talbot looking at a cut of between £50 and £60million on top of the £30million already taken out in the last five years.

In a stinging letter to the Prime Minster the Neath MP said, ‘I am deeply perturbed by the devastating effect your Government’s swingeing cuts are having on the ability of local authorities to carry out their functions.

‘Difficult decisions have already been made to cut highly valued services and to reduce the size of the workforce to enable the Council to meet the budget shortfall. Only through the hard work of the Councillors, Officers, Trade Unions and staff have compulsory redundancies been avoided, which is vital given the high unemployment rate in the constituency.

‘If cuts of this magnitude continue to be passed down from Westminster, which is what local authorities are anticipating until 2020, it will effectively reduce them to the bare minimum of providing the statutory functions required of them. Local services will be decimated and no longer meet the taxpayer’s own expectations. Questions will be asked over the role of Councils with reduced functions and services. However I fear that this is the Government’s long term aim – to reduce the functions and role of local authorities to the point that they are no longer viable or necessary.

‘Substantial cuts have already been made to Neath Port Talbot’s budget with many of the visible services affected, libraries closed or transferred to local groups, the once gold standard service of school crossing patrols has been reduced to national standards, funding to third sector groups cut and jobs lost.

‘The further cuts of between £50 and£60million are a fifth of Neath Port Talbot’s total budget. The trajectory of these cuts emanating from Westminster is unsustainable.

‘Cuts of this magnitude are forcing Councils to think of costs and changes are being driven by savings, which is not what local representatives were elected to do and not what many of the workforce came into public service for. For many it is heart breaking not to be able to provide the standard of service they would like.

‘At a time when you and the Chancellor laud that the economy is growing these continuing cuts are out of step with your own proclamations. If the economy is doing as well as you profess then I fully expect the Welsh settlement to increase.

‘If on the other hand it continues to be reduced I fear that very soon local authorities will reach a crisis point in delivering services and will not be able to meet the demands placed on them. The implications for the future will be major and it is questionable whether the effects can even be reversed.

‘Margaret Thatcher’s legacy in Neath is the decimation of the mining communities yours will be the decimation of all communities with the dismantling of local government and the services they provide. Quite simply the continuation of the callous cuts by the Government will leave local authorities, including Neath Port Talbot with skeleton services and this cannot be allowed to happen.’

Letter to David Cameron – Budget Cuts

Aimless Austerity Risks a Generation

 

Former Secretary of State for Wales Peter Hain has today condemned the Tory-Lib Dem government after economic data from the Office for National Statistics indicated that real-wages have fallen for the seventh consecutive year.

His comments came after the Bank of England slashed its growth forecasts for the British economy as the debate about the health of the economy continues to rage on.

The MP for Neath said: “We’re seeing a lot of news about this being a “surprise” to some, if the Chancellor had listened to the shadow cabinet it would not be. My own research indicates that in Neath people are close to being £3,000 worse off than they were in 2008 because of the erosion of real-wages by inflation and austerity.”

He continued, “frankly I think we’re approaching a watershed in our society because the Chancellor refuses to accept his long-term economic plan is long-term economic pain to most people. A recent report released by the Children’s Society and Step Change revealed on Tuesday that there are tens of thousands of children in Welsh families trapped in the debt spiral.”

“One of my proudest achievements was to be a member of the last Labour government where we saw the number of children in poverty reduced by 800,000. The latest figures from the Institute of Fiscal Studies shows that under this government that number will have increased by 300,000 by next year.”

The report from Step Change and the Children’s Society built upon research done by the Rowntree Foundation conclusively showing that that almost one quarter of Welsh families were trapped in poverty, this estimated to effect 148,059 children in Wales.

Mr Hain said: “the writing is on the wall, the Welsh Government is fighting an uphill battle against austerity. So long as the Chancellor continues to push this austerity agenda Welsh families will suffer as we are consistently forced to bear the brunt of unfair policy, this risks the welfare of a generation of young people in Wales, it is tragic.”

-ENDS –

Labour’s achievements are something to be proud of

More evidence to buttress Seumas Milne’s scorn of Tory-Lib Dem “recovery” propaganda (Comment, 18 September). Output in the US and German economies rose above pre-crisis levels in 2011. In Britain GDP is still 3% below its 2008 peak. Our recovery is three years behind America’s and Germany’s.

The UK economy began growing again under Labour in 2010 but that was choked off by George Osborne’s budget cuts. His savage squeeze has meant that the UK is taking six years to achieve what our two major trading partners did in three, at terrible human cost and economic waste. The much trumpeted last-quarter “recovery” is barely a third of the US equivalent because Obama invested where Osborne cut. At our conference next week, Labour should be making these arguments with much greater vigour and confidence than we have been.

Published in The Guardian, 19th September 2013: Letters

Borrowing more today can mean borrowing less tomorrow by getting the economy growing again

During the budget debate in the House of Commons Peter Hain said,

“The Chancellor delivered last year’s budget in the week that the clocks changed.  We had hoped to hear that the economy was about to spring forward.  This budget confirms instead that it has fallen back – yet again.  For the third time in a row he has stood up on Budget day to announce that things have got even worse than he forecast the year before.  The Prime Minister says his economic policies are beginning to work, but where he sees signs of success the country can’t even see a brighter shade of fail.

All we got in this budget is more of the same from a Chancellor who looks increasingly like a loser, a spent force who talks aspiration but delivers stagnation.”

To read the whole speech click here