The decision by Gove to axe Phase 3 of the Building Schools for the Future programme was predicable but still a shock. Increasingly there appears to be an outbreak of economic vandalism in Yorkshire - first Forgemasters and now £337million of cuts to the schools programme in Bradford. This is alongside the cuts in the police and other front line public sector workers.
Whilst we all recognise the need to impose cuts the severity and speed of these are simply breath taking. And they are coming at a time when the economic recovery is at its most fragile. Indeed as Paul Blanchflower and others have said this is simply not the time to be imposing cuts this deep.
Why? Well the first reason is simply about dampening demand. For every person you lay off you damage local economies (less spending power) and increase the likelihood of pressures on the benfits system. We need people to be spending now not cutting their cloth. As it is business confidence is at its lowest ebb for decades.
The second reason is that every cancelled government project has a huge effect on the private sector. The construction industry for example will suffer enormously in Yorkshire with Goves decision to axe the BSF projects. The idea that the private sector is somehow separate from the public sector is a myth peddled by politicans who actually havent got a clue about how the economy works. The decision to axe the Forgemasters LOAN has cost Sheffield dear, denied us the ability to be a world leader in a highly specialised industry and put a brake on jobs and expansion in the private sector.
Finally it is about time that the ConDems were tackled on their line about Labours economic record. They have very short memories. So a quick recap. We were a few hours short of a total meltdown in the banking system that was an INTERNATIONAL crisis. Gordon Brown bailed out the banks to ensure that people and businesses could still continue to operate. The alternative would have been that millions of people would have lost access to their accounts - some permanently. Of course if you have access to private means that wouldnt bother you - and may explain why Osbornes first reaction was not to intervene. But Brown did because there was no other course of action. The rest as they say is history. We have a record amount of debt for this reason but at least people have kept their homes, their jobs, and could feed their kids. (Well of course until this government starts laying off thousands of people).
The borrowing by Labour to pay for some projects may have been on reflection generous but this is stuff around the margins. The ConDems are going to continue to play the fear card for some time and the damage that it will do could last a lot longer.