Delivering Jobs and Growth

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Economists support call for Government to draw up a plan B

21/10/2010

Leading economists are backing the call for Government to set out a plan B to swing into action if the economy is thrown into recession by the new austerity measures.


There is mounting concern that the Chancellor George Osborne's gamble with the economy could plunge the UK in to a double dip recession.

Their fears bring fresh impetus to the Get Britain Building Plan B campaign to secure recovery and create jobs through extra investment in the built environment.

This morning the Financial Times reported that the Chancellor's spending plans amounted to a huge gamble and its leading commentator Martin Wolf called on the Government to have a plan B ready.

He said: "Reducing public spending to 40% of GDP is not unreasonable. My main concern is we are closing the deficit too quickly.

"This is the fastest structural stabilisation of the fiscal position of any country by far over the next four years and this will push us very close to recession, which means the fiscal position won't improve."

Andrew Smith, chief economist at KPMG, warned that the Chancellor had made some heroic assumptions when determining mapping out his deficit-busting proposals.

He said: "While spending cuts and higher taxes have their part to play, the resumption of robust growth is crucial to the deficit reduction arithmetic.

"But the Chancellor is making some rather heroic assumptions.

He warned: "Households may continue to save and pay down debt rather than spend, businesses may remain reluctant to invest and export performance could suffer from a lacklustre global recovery."

Howard Archer, chief UK and European economist at IHS Global Insight, also warned: "If the global economy suffers serious problems over the next couple of years, then the UK economy could struggle terribly."

Their fears underline the pressing need for the Government to have a backup plan.
The coalition of major industry groups backing the Get Britain Building campaign has lobbied all political parties to embrace the Plan B campaign.

This hammers home the message that targeted investment in building is the best and fastest route to maintain and create 2.5m real jobs and deliver big payback for Britain.

Mike Leonard, spokesman for GBB, said: "Even the country's leading economists are recognising the need for a back-up plan.

"The Get Britain Building campaign led by the BMF, MMA, FMB and British Precast has published a ‘Plan B' which sets out the value of the construction sector to UK PLC.

"Rising unemployment will be one of the main consequences of the spending plans and it is for this reason that we believe that having our Plan B is vital for maintaining and creating real jobs."

He added: "There has never been a more important time for the industry to make sure this Government knows and appreciates the contribution that the building industry can make to the long term economic recovery of Great Britain."

For more information and chance to show support for Plan B visit 

www.getbritainbuilding.org