Time for the chancellor to listen

The Observer reports that a hundred leading economists have made an impassioned call for the government to step back from the brink of a new economic crisis and back a Plan B to save existing jobs and create new ones, amid growing fears of a double-dip recession.

In a letter to the newspaper, the umbrella group of distinguished experts from across the country argue that the chancellor must rethink his strategy and enact emergency measures to kickstart growth and save the UK from growing unemployment and a further fall in living standards.

They call on the government to consider a host of measures proposed by a body of academics and economists brought together by the left-leaning thinktank Compass. The proposals, in a manifesto entitled "Plan B: a good economy for a good society", will be launched in London on Monday. They include:

• An immediate halt to cuts, to protect jobs in the public sector.

• A new round of quantitative easing to finance a "Green New Deal" to create thousands of new jobs.

• Benefit increases to put money into the pockets of those on lower and middle incomes and give a boost to spending.

• A financial transaction tax to raise funds from the City to pay for investment in transport, energy and house building.

It is very doubtful however that chancellor George Osborne will be influenced by this call for a different approach. The semi-passive attitude by Cameron & Clegg towards news of a 50% increase in directors’ pay has already clarified which section of society is going to carry the main burden of deficit reduction plans.

For all the talk of Liberal Democrats “acting as a bulwark against the worst excesses of the Tory right wing”, there is a familiar Thatcherite ring to statements from both sides of the ConDem coalition which refer to the absence of an alternative.

Listening is clearly not a habit of this government. But it is a habit they need to acquire if the economy is to escape serious and long-lasting damage.

Update: Will the promised £1billion to be spent on 100 projects be enough to kickstart the economy?  And how many of them are in Wales?