Thursday, 8 January 2009

Field hits out at government's handling of economy

The government’s strategy to tackle the financial crisis has been criticised by influential Labour back-bencher, Frank Field. The MP for Birkenhead, who recently led a back bench revolt against abolition of the 10p rate of tax, writes on his blog that he feels, ‘a deep unease about the Government’s strategy to counter what is euphemistically called a recession’.

The striking thing about Field’s piece is that his analysis is not terribly different from that of the Conservative party. He is scathing about the efficacy of a 2.5% Vat cut and identifies the government’s failure to get credit moving to viable businesses, despite its partial renationalising of the banks. Although the credit crunch problem has been self-evident for months, Labour has done little to address its effects on the economy.

“Weeks and weeks later the Government still hasn’t announced how it can throw extra lifelines to viable companies who are being denied a working capital from the banks. Giving the banks more assets for capitalisation is almost as pointless as the VAT cut. The Government now has a small clutch of nationalised banks. Why isn’t it using them to get credit out to viable firms?”

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