Yesterday's growth figures showing the economy grew just 0.2% in the last quarter are very worrying. It confirms that George Osborne's austerity plan simply isn't working. The government needs a Plan B.
The Chancellor should have built upon the solid 1.2% second quarter growth he inherited from Labour last year. Instead he is cutting too far and too fast - hitting families, costing jobs and making it much harder to get the deficit down. We're already borrowing £46 billion more than was expected this year.
Labour's balanced deficit plan would focus on creating jobs, supporting businesses and fostering innovation. Of course we need tough decisions on tax and spending cuts, but the fastest way to get the deficit down is to combine sensible spending reductions with solid economic growth.
It's not just Labour calling for the Government to change course. In June, 52 of the UK's leading economists called for a plan B. They said the Chancellor's economic policies were 'self-defeating' and is 'likely to result in a lot more pain and a lot less gain'.
They called for a 'strategy for sustainable growth'. One part of this suggested plan was to focus on the low carbon economy - something this Government hasn't done.
It's estimated that over £100 billion will be spent on renewables and clean energy across the globe next year alone. Ministers should be providing the market certainty for green businesses to invest in the British economy. If they do, hundreds of thousands of jobs could be created, increasing revenues and driving growth as a result.
Instead of providing certainty, the Government has withdrawn support. Cutting 40% of the Carbon Trust's funding of green R&D, dithering over the Green Investment Bank, and unexpectedly removing Feed-in-Tariff incentives for solar power, making medium scale school, hospital and community projects unviable. A move which Howard Johns, chairman of the Solar Trade Association, said will cripple the UK's fledgling solar industry.
As a result of this approach, industry has lost confidence in Minister's ability to manage the low carbon economy.
In Ernst & Young's latest quarterly survey, only 8% of renewable industry professionals said that they were optimistic that the Government would establish the conditions for success in the next 12 months.
A good industrial policy gives entrepreneurs and investors the confidence, certainty and support to establish and grow businesses. This Tory-led Government has done the opposite and now we are going backwards.
In March, a report by the respected US Pew Environment Group showed the UK fell from being third in the world in green growth investment, to only 13th place, over the past year. This means we now rank behind emerging economies such as Brazil, India and China.
The report blamed this fall down on "a sharp decline in offshore wind energy investments and uncertainty surrounding [government] policy".
In the wind sector, we were once a world leader. Now we have been overtaken by countries such as Denmark, which has won half of the global market in wind turbines, boosting the Danish exchequer by £2.7 billion a year.
Other countries are powering ahead. We can't afford to miss out. For example, a recent report in the Financial Times suggested that in the same week that the Chinese premier was in London signing trade deals worth $2.2 billion, China and Germany signed trade deals on carbon capture technology and electric vehicles worth about $15 billion.
In the face of this decline, where is the plan to bolster tax receipts by encouraging low carbon start ups, fostering innovation and creating jobs in high tech manufacturing? The government doesn't have one.
The Government's 'Plan for Growth' released on the same day as the Budget, treated green growth as an afterthought. The document is 126 pages long but just three of them were dedicated to the low carbon economy.
We were promised the 'Green Economy Roadmap'. Don't worry if you've not heard of it, I've spoken to government ministers who haven't either. We are still waiting for it.
Business minister Mark Prisk has been talking about this joint BIS, DECC and DEFRA initiative since last autumn. It was meant to be published in April. Now it's nearly August and we still don't have it. It's incredible that after more than a year this government has been unable to publish any strategy for building a British green economy.
This needs to change and it needs to change quickly. It's not right that hardworking tax payers have to pay the cost of government ministers squandering opportunities to create jobs and build the industries of the future.
While in government, Labour introduced the Climate Change Act in 2008 to enshrine carbon targets in law, and to move Britain from a high-carbon to a low-carbon economy. We planned to achieve 40 per cent low-carbon electricity by 2020, and to create thousands of new jobs and apprenticeships in green businesses.
Today's figures show that the Chancellor needs to think again. He should adopt Labour's plans for a temporary cut in VAT to get the economy growing strongly again. Alongside this we need a proper plan for green growth. By unleashing a green revolution for skills and jobs, we could get our economic recovery back on track.
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