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Johnstone's View 1st  August 2008

It would be funny if it weren’t such a personal catastrophe for so many ordinary people in Britain today. Gordon Brown has taken our economy for a decade-long joyride and left it bruised, battered and in need of urgent repair, throwing away all the economic gains of the 1980's and 1990's.

It's increasingly clear that our economy doesn't just need stability - it needs full-scale recovery. That means immediate action to help employees, homeowners, savers and families, as well as longer-term action to bring down the cost of living, sort out our public finances and spur economic growth.

First of all, we need to do all that we can to help those who’s jobs are threatened. Since the beginning of the year, unemployment has risen sharply and the credit crunch has meant more companies are finding it hard to get the money they need to keep their business alive.

This isn't good for the companies, many of which are actually fundamentally sound; this isn't good for the banks, which lend these companies money, and it's not good for employees - who face being laid off.

David Cameron has announced that he will consult on taking the best aspects of the American Chapter 11 system and give good companies breathing space to allow them to rescue or restructure the business in the face of the credit crunch.

This change will ensure that fewer good companies end up in liquidation - and fewer people lose their jobs through no fault of their own but of course, we cannot save all companies that fail. When that happens, we need to make sure the employees who lose their livelihoods get the support and help they need to get a job as soon as possible.

We also need to take immediate action to help homeowners - and those who want a home but cannot get one, because both are struggling.

The former have the threat of repossession hanging over them as they come up to re-mortgage. That's why the Conservatives proposed the plan to help re-open the mortgage market with the Special Liquidity Scheme, which has now been adopted by the Labour government.

And the latter just cannot get the finance together to buy their first place. Last October, the Conservatives promised a fully funded stamp duty cut taking nine out of ten first time buyers out of this tax altogether. Come on Gordon, what are you waiting for?

There's another area where this Government has got to stop the dithering and start acting. It needs to take immediate action to protect savers so that there is no repeat of the scenes we saw outside Northern Rock last September.

For a start, savers need the reassurance that if another bank goes bust, their hard-earned cash is protected, so the Government should act now to protect the first £50,000 for each saver in the event of their bank collapsing. There's nothing stopping them, they will have the support of the Conservatives, they just need to do it.

Next, we must help families with their finances and the rocketing cost of living. Of course, many of the problems families face come from abroad. A global food crunch is hitting people at the checkouts and the rising cost of oil and gas is hitting people at the pumps and whenever they pay their electricity bills.

But remember this. The biggest demands on your money don't come from some far-off ‘world’ economy, they are the never-ending demands for council tax, income tax, VAT, road tax, tax on fuel and tax on fuel tax, to name but a few.

The very least that the Government could do is stop making the cost of living worse and that's why the Conservatives are proposing a fair fuel stabiliser.

At the moment, tax revenues rise and fall with the oil price.  The increase in revenues from the North Sea more than offset any dampening impact high oil prices will have on tax receipts from the wider economy. Oil goes up, the tax goes up, people feel all the pain - and the Government gets all the gain. A fair fuel stabiliser will end that. Under the Conservatives, the Government will share the pain.

But in the end, the only sustainable way to reduce the demand for taxation and cut the cost of living is to bring down the cost of government and that's the next part of our economic recovery plan.

After immediate action to help employees, homeowners, savers and families, the next Government will need to take long-term action to repair the damage that has been done to our public finances and return to basic good housekeeping.

I’m under no illusion that this will be easy.