‘Plan B’ call to Osborne amid double-dip recession fears

THE Government is today facing renewed pressure to abandon its economic policy in favour of a radical “Plan B” after 100 leading economists backed a highly critical report warning that the current programme of spending cuts could trigger a double-dip recession.
By Jack Blanchard and Simon Bristow
Published 31st Oct 2011, 08:12 BST

The experts, including former European Investment Bank consultant Dr Ha-Joon Chang and academics from across the country, say Chancellor George Osborne should instead adopt “emergency” measures to stimulate growth.

They are backing a report by centre-left think-tank Compass, which accuses Ministers of taking a “terrible gamble” with the nation’s finances and claims the cuts may actually increase the budget deficit.

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The report, entitled Plan B, recommends a series of radical steps are taken to bring about recovery and avert a fresh economic crisis.

The measures include:

Reverse the cuts until strong economic growth is secured.

Cancel PFI debts.

Introduce a “financial transaction” tax on the City.

Increase some benefits for the poorest.

Neal Lawson, Compass chairman and joint editor of the report, said: “Everyone knows Plan A isn’t working and looks set to increase the deficit.

“This document outlines for the first time a genuine and credible alternative the country can get behind. The priority has to be to get the economy moving in a way that is sustainable for businesses, the environment and society”.

Ministers are braced for more bad news tomorrow with the publication of the latest growth figures by the Office for National Statistics.

The Treasury said the recovery was expected to be “challenging” and that latest plans for growth would be announced next month.

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