Government is failing to deliver growth plan, says Labour

Labour has accused the coalition government of failing to deliver a credible growth plan, undermining the UK's competitiveness in critical industries.

In a debate last week, shadow business secretary Chuka Umunna said the government was hindering growth and argued that policies like the VAT rise and flagship projects meant the country's economy was flatlining.

Labour has called for tax on bank bonuses to stimulate jobs for young people; increase building of affordable housing, and a one-year national insurance tax break for small businesses.

Umunna said: "The fact that youth unemployment is now over one million is a disgrace and a tragic waste of talent.

"The government is seeking to pass on blame to the very businesses that they claim they want to help - it's an utter fiasco."

Business secretary Vince Cable admitted that the current state of the economy was worrying but said the government is now on their way to rectifying the situation.

"We accept that we have a worrying level of youth unemployment. It is correct to say, as the motion does, that we have a high, and we would argue excessive, level of borrowing," he said.

"We inherited an economy that was horribly unbalanced in favour of debt-supported consumption and banking, and we are now rebalancing the economy towards exports and trade.

"The factories are being built and the jobs are being created, and that is what matters."