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Monday, 05 April, 2010 
Gordon Brown is claiming today that our proposal not to go ahead with the bulk of the National Insurance (NI) rise planned by him for April 2011 risks plunging the UK back into a recession. Last week we announced that we would not go ahead with this rise, meaning 7 out of 10 people will be better off under our plans and instead we fund this by efficiencies within the public sector of £6bn. These are efficiencies already identified by the Government but which they do not want to deal with until another day.
So let me get this straight, Gordon claims we will go back into recession because of our NI plans, is this guy serious?
First, he claims our efficiency gains are not specific, unfunded and therefore not real. Does he expect us to believe that we cannot find £6bn savings from the public sector which spends around £700bn or so each year, less than 1% of the total?
Second, his own Government advisors have identified at least £11bn of waste that could be cut but he is just refusing to do so until a later year. Just how does spending £11bn next year on waste help the recovery?
Third, he claims that our plans would take £6bn out of the economy at this crucial time in the recovery. I don’t know where Gordon did economics, but he is just plain wrong, no money would be taken out of the economy.
Under Conservative plans we wouldn’t go ahead with the tax rise so £6bn stays with the people who earn it and are therefore able to spend and save it as they see fit.
Under Labour plans £6bn is taken from working people and spent by the Government on their behalf on what the Government already admits is wasteful activity.
In purely economic terms, and assuming that the Government can spend money efficiently, there is no money taken from the economy, it is merely transferred from individual spending to Government spending. In real life we know that a lot of the money gets swallowed up by waste and inefficiency so the ‘bang for your buck’ from £6bn spent by individuals is greater than £6bn spent by the Government. That is why the Government argued that the temporary VAT cut of £12bn was an effective way of boosting spending, because it put money into the hands of people immediately.
The simple fact is that Labour likes spending our money and they think they can spend it better than us. They don’t like plans which mean they get less to spend and leave more with the people who earn it.
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