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Business Wants Action Not Excuses From the Government

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ED BALLS ECONOMY
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Businesses want urgent action and leadership from the government to get our economy moving again. That's the clear message I've heard from companies around the country in the last few weeks.

In York on Friday, the main concerns amongst business leaders I met were the difficulties in getting credit from the banks and a wider lack of confidence - something which risks getting worse if the eurozone crisis deepens, but has been a growing issue since the start of the year. And in Southampton there was frustration that a flagship government scheme to help new businesses excluded the whole of the south east, as well as London and the east of England.

With consumer and business confidence slumping now for a year and getting worse, businesses are crying out for a plan for jobs and growth from this government.

Major business organisations like the CBI and British Chambers of Commerce are calling for infrastructure investment to be brought forward - a key part of Labour's five point plan for jobs to boost demand now and help strengthen our economy as we build a better economy for the future.

The Federation of Small Businesses is also backing Labour's proposal to use the unspent money in the government's £1 billion failed national insurance holiday for new businesses and extend it to all small businesses who take on extra workers - and in every part of the country. The CBI has proposed something similar, focusing their tax break on businesses large or small who take on one of the million young people now out of work.

Labour's call for a temporary VAT cut to boost demand and help hard-pressed families and pensioners has been echoed in recent days by the Financial Times' Sir Samuel Brittan and Nobel Prize winner Christopher Pissarides. And our one year cut in VAT to 5% for home repairs and improvements to help small businesses and homeowners is backed by a coalition of organisations from the National Trust to the Federation of Master Builders.

The government insists it will not change course, regardless of the evidence - more of which we saw this week - that their reckless plan has choked off the recovery, pushed up unemployment and will mean billions more borrowing than planned.

Ploughing on regardless is deeply irresponsible and Ministers are running out of excuses for inaction.

First, over the past week, the government has tried to blame the eurozone crisis. But while a deepening crisis in the eurozone will clearly affect our economy going forward, our recovery was choked off well before the recent crisis.

Now my fear is that the Chancellor is eyeing up the planned strikes over public sector pensions the day after his autumn statement as the next thing to distract attention from his economic mistakes.

As Ed Miliband said on Thursday, there is a huge responsibility on both sides, even at this late stage, to stop the strike happening. Both unions and government need to give some ground. The strike can still be avoided if both sides are willing to negotiate.

But there has been no movement on the crucial issue of the 3 pence in the pound rise in contributions, which the government imposed without negotiation and before Lord Hutton's important report had even been published. And despite the government's claims in recent weeks about protecting the lowest paid, more than 750,000 workers earning less than £15,000 - mostly women in part-time work - will face a big rise in contributions.

It seems that the government is happy to see a disruptive strike. As the Daily Telegraph's deputy editor wrote this month: "Mr Cameron is privately delighted that the unions have rejected the deal. The view in Number 10 is that they have been craftily manoeuvred into a trap." That is no way to approach the long term needs of the country and of low paid dinner ladies and nursing assistants who have worked hard for many years and are approaching retirement.

There is a responsibility on unions and government alike to do everything they can to avoid these strikes, protect low paid workers and deliver long-term reforms that are fair to taxpayers.

Rather than trying to use the strikes to distract attention, the Chancellor must make the right choice in the autumn statement. He can plough on regardless with a plan that is hurting, but not working to get the deficit down. Or he can stop blaming everybody else for his own mistakes and change course.

There is a better way: a plan for jobs and growth - like Labour's five point plan - will get Britain working again and get our deficit down too.

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