Column: Coun Steve Leigh: Labour’s lack of economic credibility

The Labour Government claims its number one priority is economic growth. However, the recent Spring Statement showed once again they are failing to deliver their promises, and revealed the enormous damage being caused to our economy since Labour came into Government last July.

The Statement confirmed that the Office for Budget Responsibility (OBR) has slashed UK economic growth forecasts by half, down to just 1% for this year and unsurprisingly the £9.9 billion in fiscal headroom (extra money) forecasted at the last Budget has now been wiped out to the tune of £14 billion due to lower economic growth, higher government borrowing rates, and rising in inflation.

All this is having significant consequences on living standards and the resources available for public services in Calderdale and across the country. However, the situation in which we find ourselves is not surprising given the £40bn in tax rises and Labour’s trashing of the economy which has scared business and consumers.

The Conservatives accept some responsibility for this crisis and several challenges faced by the Government are partly attributed to global problems. Nonetheless, that doesn’t change the fact that Labour’s decisions since last July have compounded the problems facing the UK economy, and the recent Spring Statement has only made matters worse.

In response, Rachel Reeves is trying to recreate another £9.9bn in fiscal headroom. One measure to achieve this is by making cuts to welfare spending that will raise £4.8bn. The Government has had to tackle this rising Welfare spending in order to ensure that people who can work are working, but they have lost the moral argument with their last-minute changes - which include additional cuts to meet the arbitrary target of £9.9bn in fiscal headroom.

It is deeply concerning that long-term policy changes to Welfare which will push 250,000 adults and 50,000 children into relative poverty (DWP) are being guided by fiscal targets that are so fragile that a small 0.6% rise in interest rates or a 0.1% drop in growth would erase the headroom in its entirety.

The fact that the headroom is so small also means that we will once again be debating the need for further spending cuts or tax increases - this is hardly the stability that Labour promised - and it’s certainly not a climate that inspires confidence or encourages businesses to invest.

Alongside all this bad news, from April household bills will be increasing - which on average will cost each household an extra £400 per year. This means that Welfare is being cut to meet an arbitrary fiscal target, more people are going into poverty, taxes are going up, and household bills are increasing.

In Calderdale, the Conservatives understand these problems, that’s why recently we proposed to limit the Council Tax rises to 3.5% this year, compared to the Labour Budget’s 5%.

Furthermore, at the recent Council Meeting we proposed a motion to help local business in Calderdale by encouraging the Council and local residents to spend locally. Earlier, we also proposed motions against the cuts to winter fuel payment and increases to National Insurance.