Having been in Parliament now since June 2001 I cannot remember a summer during the last seven years when politicians of all parties faced the parliamentary recess with such concern for the British economy.
If it was not for the very bleak domestic news about knife violence on Britain’s streets I suspect that the continuous deterioration in our nation’s economic wellbeing would never be off the front pages. The truth is that knife crime will surely abate before the summer is out but the prospects for uplift in our economic situation seem a much longer haul.
As politicians, we have to keep an eye on and carefully consider some of the less immediate, but similarly important, issues that will need to be confronted after the summer break. There are few people in the government who seem to be thinking now beyond the immediate crises that have overtaken our banking sector, the housing market and the cost of living.
But all the decisions that are made today must also reflect the long term needs of this nation. We still see no sign of this government repairing our pensions industry and helping our young people retain some hope for their retirement possibilities. The government continues to fail the less well off in our society by hoping that the complex tax credit system will help instead of harm the needs of our low income families. They’ve made it harder and more expensive for people to put a foot on the housing ladder whilst more and more young people are turning away from university study because of their fears of starting their working lives saddled with debt.
What I would like to see today coming out of this current economic turmoil is more vision and more concern towards our long term future.
The Government needs to put pensions back as a long term priority for our nation. We need to see a reduction of personal taxation paid by the lowest earners. At the moment you barely have to earn £105 per week in order to start paying income tax. Rather than institutionalising the complexities of tax credits, I want to see a system whereby no one earning less than £200 per week pays any income tax at all. Similarly by raising slightly the thresholds of those paying tax at the higher rate, the better-off in our society would not benefit from this long overdue extension of the zero rating.
Instead of bemoaning the current housing crisis it makes sense to free the housing transactions of stamp duty and throw away the expensive idea of HIPS. Also, dare I say it, let’s encourage employers to keep their staff by easing the bureaucratic burdens of red tape that small companies can survive in good times but can break a company when times are tough. They are tough now but I believe they will get tougher and I fear for the levels of unemployment in this country.
Short term measures and mistaken complex tax and benefits systems have brought us to a point where we are unfit to face a global economic recession. Politicians must not be frightened to make the case for radical change to be implemented during times of crisis but any reforms that are made and any decisions taken during this difficult period must also take account of their long term effect.
The sign of a robust economy is one that survives strongly in difficult circumstances as well as when global market conditions are set fair. The struggle that British residents face today, and for some months to come I fear, points to our economy being weak. The government must take its share of the responsibility but now is not the time to repeat the mistakes it has made in the past and look to short-term solutions.