12 point plan for fixing the economy - Manning's Money - Mirror.co.uk

12 point plan for fixing the economy

By Clinton Manning on Jan 27, 11 12:50 PM in Business

A SHOCKING series of statistics this week have shown the government is steering the economy towards a cliff.

Grim data revealed the output of UK Plc shrank by an alarming £1.6billion in the final three months of last year - and that's before the VAT rise kicks in or we feel the full force of Slasher Osborne's spending cuts.

At the same time Bank of England governor Mervyn King has warned families face the biggest squeeze in living standards since the 1920s as wages fail to keep pace with the cost of living.

Then, no lesser figure than billionaire financier George Soros waded into the debate, warning that the spending squeeze would be a bullet to the head of any recovery and send the UK lurching back into recession.

Such dark days demand urgent action. So what should the government be doing to avoid a calamity?

1) Slow down the pace of government spending cuts to prevent a sharp and sudden rise in unemployment and a sharp increase in benefits bill.

2) Apply far more pressure on the High Street banks to lend AND reduce the cost of borrowing, particularly for small firms.

3) Stop pressuring the Bank of England to raise the cost of borrowing. This would be a disaster, tipping more families and firms into the abyss.

4) Cut red tape, making it easier for small firms to grow and create jobs. Offer more incentives for firms to recruit young people and offer skills training.

5) Help kick-start the housing market by scrapping stamp duty for first-time buyers and easing planning restrictions, particularly in the south-east.

6) Boost spending on affordable housing. A £6billion investment would build 100,000 homes and create an estimated 750,000 construction jobs. It would also cut the mammoth waiting lists for council houses and bill for people living in hotels and B&Bs.

7) Invest more in key transport links, particularly rail, creating jobs and improving public transport.

8) Close tax loopholes that allow footballers and some companies to avoid paying billions.

9) Make the 50% tax on bank bonuses permanent. It raised £3.5 billion under Labour and did not lead to the threatened City exodus.

10) Freeze fuel duty to relieve pressure on motorists and haulage firms and slow food price rises.

11) Take advantage of the weak pound to boost UK exports. Although our manufacturing base is not as powerful as it once was it is still an engine for growth. Take the Nissan factory at Sunderland which exported more than a million cars last year.

12) Offer tax breaks to firms willing to invest in deprived areas. This would not cost taxpayers any money but could help create work. The other benefit is that any risks are with the private developer, not the state.

ends

via blogs.mirror.co.uk