The UK is officially out of recession, but Michael Foster MP has warned against withdrawing government support while the economy is still recovering.

The figures, published by the independent Office of National Statistics this morning, show that the UK economy has begun growing again, with GDP growth estimated at 0.1% for the last quarter of 2009.

At the same time, a report by experts at the International Monetary Fund (IMF) warned against withdrawing government support from the economy too soon.

Michael Foster MP:
“This is good news for Hastings and Rye and for Britain, but also a reminder that there is no room for complacency. The Labour Government will continue to do everything we can to protect communities and keep the economy growing.

“During this difficult period, Labour is taking action to help people in Hastings and Rye back into work and to support local businesses. We introduced the ‘Time to Pay’ scheme, which allows struggling companies to postpone tax payments and helps keep businesses afloat. Money to protect and create jobs has been invested in the area through the Working Neighbourhood Fund and Future Jobs Fund. We will continue to help local people who have lost their jobs to stay in their homes through our mortgage support schemes and.

“While these figures suggest Labour’s economic policy is working, we will continue to take action to strengthen growth and promote jobs. As the IMF said today, while the economy is still recovering, it is crucial that the Labour Government maintains support for the local economy here in Hastings and Rye and nationally. Today’s news underlines how dangerous it would be to throw caution to the wind, as the Tories propose, and make deep cuts now. They risk choking off the recovery just as it begins.”

Ends

Editor’s notes

1. The Gross Domestic Product figures released by the ONS can be found online here:
http://www.statistics.gov.uk/pdfdir/gdp0110.pdf

2. The IMF’s report on the World Economic Outlook today argued that Governments should maintain their fiscal stimulus while the global economy is fragile.

"Due to the still-fragile nature of the recovery, fiscal policies need to remain supportive of economic activity in the near term, and the fiscal stimulus planned for 2010 should be implemented fully.”

"...a key risk is that a premature and incoherent exit from supportive policies undermines global growth"

3. The Conservatives opposed the Labour Government’s fiscal stimulus:

Andrew Marr: If you’re against an unfunded fiscal stimulus, you’re presumably determined to vote against an
unfunded fiscal stimulus?
David Cameron: Everyone knows exactly where we stand
AM Show, 23 November 2008
“I think it’s very unconvincing and I’m not sure it will be particularly stimulating so I’m very sceptical.”
David Cameron, AM Show, 23 November 2008

4. The Labour Government’s package of labour market support includes:

·        The 2009 Budget announced a guaranteed job, work placement or training place for all 18-24 year olds on Job Seeker’s Allowance for longer than six months to ensure no young people are left behind due to long-term unemployment. This 12 month Guarantee became available in January 2010;

·        The Guarantee includes 100,000 new Future Jobs Fund jobs for young people as well as adults in areas hardest hit by the downturn. Already, up to 95,000 jobs across the UK have been announced through the fund. For example, in Liverpool there will be up to 6000 high-quality jobs and apprenticeships in fields including community care, environmental services and sports coaching;

·        The Jobcentre Plus staff headcount has been increased by 15,000 to continue the personalised support and advice that has proved effective in helping nearly 70 per cent of jobseekers to leave JSA within six months of a claim;

·        since April 2009, over 12,000 people have benefited from the comprehensive support made available to those unemployed for more than six months. Support includes up to £2,500 for employers that recruit and train those in receipt of Jobseeker’s Allowance for six months or more, as well as additional training places, volunteering opportunities and financial support and advice for those wanting to set up their own business;

·        over 300 organisations have already committed to provide support to young people through the Backing Young Britain campaign. This support includes mentoring, apprenticeships, work experience and internships;

·        over 3000 employers have used the Rapid-Response Service since the 2008 Pre-Budget Report announced a doubling of funding. This service provides on-site support for both small- and large-scale redundancies, to help employees find a new job even before they become unemployed; and

·        all 16 and 17 year olds will be offered a place in education or training through the September Guarantee. Building on this every 16 and 17 year old who is not in education or training in January 2010 will be offered an Entry into Employment place supported by an Education Maintenance Allowance.

5. These employment support measures have been welcomed by the business community:

“With unemployment rising sharply, the extra funding put in place for Jobcentre Plus will be vital in ensuring the recently unemployed do not slip into the ranks of long-term unemployed.”
Richard Lambert, Director-General of the CBI, 22 April 2009