In an open letter to The Observer newspaper, we argued that the chancellor must rethink his strategy and enact measures to kickstart growth and save the UK from growing unemployment and a further fall in living standards.

We wrote that "it is now clear that Plan A isn't working. Wave after wave of economic figures... have all concluded the British economy is faltering." And we warned that: "Doing nothing is not an option."

We called on the government to consider a host of measures proposed by a body of academics and economists brought together by the thinktank Compass. The proposals, in a manifesto entitled "Plan B: a good economy for a good society", was launched in London on Monday this week and can be found here.

These measures include:

• An immediate halt to cuts, to protect jobs in the public sector.


• A new round of quantitative easing to finance a "Green New Deal" to create thousands of new jobs.


• Benefit increases to put money into the pockets of those on lower and middle incomes and give a boost to spending.


• A financial transaction tax to raise funds from the City to pay for investment in transport, energy and house building.

"It is now clear that plan A isn't working. Wave after wave of economic figures from HM Treasury, national and international economic institutions such as the OECD, the IFS and the IMF have all concluded that the British economy is faltering. The UK jobless total is now at its highest for more than 17 years, while growth has all but stalled.

We urge the government to adopt emergency and commonsense measures for a Plan B that can quickly save jobs and create new ones. A recovery plan could include reversing cuts to protect jobs in the public sector, directing quantitative easing to a green new deal to create thousands of new jobs, increasing benefits to put money into the pockets of those on lower and middle incomes and thus increase aggregate demand.

This could in part be paid for by the introduction of a financial transactions tax. The government could do far more to create the space for new and innovative industries and companies to flourish. One idea is a British investment bank, to leverage and back investment in low-carbon sectors such as housing, transport and renewable energy.

Doing nothing is not an option. We therefore call on the government to put the national interest first and hold an emergency budget that would instigate a Plan B for jobs, fairness and sustainability to rapidly get the economy moving again".

The letter was signed by a hundred academics and economists who can be found listed here.

Professor David Bailey works at Coventry University Business School