Sunday, December 13, 2009

Labour has its policies on the economy all wrong

Labour has its policies on the economy all wrong. More taxes on jobs and allowing Britain's debts to continue to mount unchecked is not going to help the country out of recession. Instead Labour’s policies risk more unemployment and higher interest rates. Labour has failed to take the tough decisions on spending before the election and so there will be even higher taxes if they win the election.

The central measure in the Chancellor’s Pre Budget Report was a tax on jobs that hits everyone earning over £20,000. Labour’s hike in National Insurance is also a back door cut to the NHS. With £446 million coming from the NHS budget, Labour plan a real cut in health spending.

A Conservative government will protect health spending - because there are huge challenges facing the NHS in the years ahead - and we will try to avoid Labour's National Insurance rise. Of all Labour's tax rises, it is our priority to avoid their tax on jobs.

The Conservatives understand that people are struggling to find jobs because very few businesses are taking on new staff. To get companies hiring again we should have tax breaks for companies that create new jobs with cuts in National Insurance and Corporation Tax for small companies.

We need a government that will be straight with people on the economy. Last year the Chancellor told us he planned to borrow £38 billion and that the economy would grow 2.5% this year. He now tells us that he plans to borrow £178 billion and that the economy will in fact shrink by 4.75%.

Labour also needs to be honest about the state of the public finances. They are borrowing £1 for every £4 the government spends. Government debt is now over £800 billion and will exceed £1 trillion in the next year. The more debt the government builds up the longer it will take to pay back and the more taxes will have to rise. Unchecked borrowing will also push up interest rates, hitting businesses and homeowners.

By contrast Conservatives have bold plans to deal with the big problems the country faces. Labour are now the party of unemployment - we are the party of new jobs and new opportunities. To deal with Labour's Debt Crisis we have been honest with the British people about the tough decisions we need to take. Unlike Gordon Brown, we won't duck them and treat the British people like fools.

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