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Clegg calls on Government to invest VAT cut money in jobs

March 23, 2009 4:36 PM
Originally published by UK Liberal Democrats

Nick Clegg criticises the Prime Minister's wasteful VAT cut and urges him to learn from his European counterparts by investing in jobs

In response to the Prime Minister's statement on the spring European Council, Nick Clegg welcomed news of a common European framework of regulation in financial services but was critical of his arrogant and wasteful policies to combat the recession.

He called on the Government to immediately cancel the VAT cut and invest the money in public transport and home insulation to create new jobs straight away.

See the full speech below

Mr. Nick Clegg (Sheffield, Hallam) (LD): I thank the Prime Minister for his statement, in which there is much to welcome. The principle of a common European framework of regulation in financial services is a significant step forward, and one that we have been advocating for many years. There will continue to be differences in detail-he alluded to them himself-but the principle of cross-border regulation of cross-border finance will be welcomed by all but the most small-minded Eurosceptics. The eastern partnership with countries such as Georgia and Ukraine is also welcome, not least because of Russia's sometimes belligerent attitude towards its neighbours.

I remember in years gone by that the whole of Europe would groan every time the Prime Minister made another tub-thumping speech about how superior his policies were to everybody else's, so it is good that the idea finally appears to have dawned on him that he does not have all the answers and that he might even have a thing or two to learn from our European Union neighbours. Is the problem not now that, even with a touch of new-found humility, it is hard for him to lead at the G20 summit and in the European Union, because he does not practise at home what he preaches to them abroad? Would his rhetoric about stopping protectionism not pack more of a punch if he had not indulged in populist rhetoric about "British jobs for British workers"? Would his words about cracking down on tax havens not be more compelling if he had not presided for 12 years over industrial scale tax avoidance by British banks and big businesses here in Britain?

When the Prime Minister tries to act as President Obama's agent in Europe and persuade his European counterparts to issue another fiscal stimulus, would those leaders not listen to him more if he had not blown £12.5 billion on his wasteful VAT cut? Would those leaders not be more likely to listen to his recommendation that economic recovery must be driven by green investment if he was actually making those investments at home, rather than talking-as he did the other week-about 400,000 fantasy green jobs, which he has no idea how to create? If he had used the VAT money, as we proposed, to invest in public transport and in a transformation of our housing stock, he could have created 100,000 new jobs starting right now.

It is becoming increasingly clear that it will be difficult for Britain to afford a sustained, major new fiscal stimulus to boost our economy. Is it not therefore clear that we must take drastic action to ensure that we stop wasting any more money on things that do not create jobs? Will the Prime Minister commit immediately to cancelling the VAT cut and investing what money there is left in green transport, in the insulation of our homes, schools and hospitals, and in jobs? Did he not wonder, as he looked round the table at the other EU leaders at the summit, why not one of them had copied his cut in sales tax? Will he admit that they were right to choose to invest money in jobs instead?