AS 2011: Balls slams ‘catastrophic’ Govt policy for hitting recovery

Shadow Chancellor Ed Balls has attacked the Government’s autumn statement saying it is a continuation of the “catastrophic” errors which have undermined growth and increased public sector borrowing.

Responding to Osborne’s autumn statement in Parliament this afternoon, Balls said new figures from the OBR, which contain falling growth projections and a slowing in the reduction of public borrowing, show Government policy is hitting the economy. He said measures announced by the Government today to help boost small business growth, including a new small firm investment scheme, were a “fantasy growth package” that was “cobbled together” and would do little to boost growth.

He said: “These would be difficult times for any Chancellor, but our fear is that once again the Chancellor is making a catastrophic error of judgement in his statement today. He is refusing to learn the lessons of history or economics. He is refusing to shift to a more balanced plan.

“If after just 18 months his plan is leading to falling growth, rising unemployment and £158bn more in borrowing the country either needs a new Chancellor or a new plan. We need real tax cuts and real investment. The Government set up the OBR, maybe they should listen to it.”

Osborne attacked the credibility of Labour singling them out as the only party in Europe proposing an extra spending. He said proposals laid out by Balls and the Labour party would require more borrowing than the Coalition is taking on, at a time when spending must be reduced.

He said: “As far as I can see the Shadow Chancellor complains we are borrowing too much and then calls for more borrowing. That is why so many of us are pleased he is in the job he is in.”

When Balls suggested low interest rates on Government borrowing were not necessarily a sign of strength in the British economy, Osborne accused him of pursuing the “completely stupid” policy wanting higher interests rates.

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