Liberal Democrats have welcomed the announcement that George Osborne is to abandon his fiscal rule and called on the Government to move Government spending to a ‘war footing’ to combat the impact of a Brexit Recession.
The Liberal Democrat shave long said the fiscal rule would restrict growth, but it’s impacts would be even more severe given the impact of a Brexit vote. They said that now is the time to dramatically increase spending on infrastructure to boost the economy.
They called on the Government should provide direct support to businesses that risk failure due to the restriction of bank lending caused by the Leave vote.
Specifically, the Government should provide the British Business Bank with a significant capital injection to providing lending, overdraft and bridging loans to high growth businesses in the technology and advanced manufacturing sector.
Liberal Democrat Leader, Tim Farron said:
“Abandoning these unrealistic spending plans is the right thing to do, but it needs to be backed up by action. The current Government cannot just sit on its hands and wait for the next Tory leader. They need to move to a war footing against a Brexit recession.
“George Osborne must now begin to aggressively invest in infrastructure and projects to support jobs and encourage growth.
“The British Business Bank, set up by Vince Cable during the coalition, will be a key player in ensuring that the Brexit recession does not claim our newest and brightest companies. The UK has the potential to be a world leader in advanced manufacturing and technology services, but these companies are already struggling to get banks to lend. The Government must immediately inject money into the British Business Bank to step in as the banks withdraw to their core business.
“The Chancellor often favours words over actions, but if he does not act now then his legacy as Chancellor will be as badly damaged as David Cameron’s has been as Prime Minister.”Follow this link for more info: http://ift.tt/29aL0y5