Labour Shadow Chancellor Ed Balls has attacked the Chancellor’s autumn statement, saying it is a continuation of the “catastrophic” errors which have undermined efforts to balance Government finances.
In the emergency Budget in June, Chancellor George Osborne set out plans to eliminate the structural deficit and reduce state debt as a proportion of Government income by the end of the Parliament in 2015. He worked into that plan a year’s headroom, allowing him to put that deadline back to 2016. That headroom, he told MPs during his autumn statement this week, “has now disappeared”.
Responding to Osborne, Balls said rising borrowing and unemployment were evidence the Government’s austerity drive was making the situation worse.
He said: “Even judged by the one objective this Chancellor set himself, to get the deficit down, he is failing. Going further and faster has been utterly counter-productive and self-defeating. It has backfired. We have had all of the pain but none of the gain. Our fear is that once again the Chancellor is making a catastrophic error of judgement, refusing to learn the lessons of history or economics and to shift to a more balanced plan.”
Osborne said the Office for Budget Responsibility still expects the Government to meet the 2016 deadlines. He said: “As far as I can see, the Shadow Chancellor complains we are borrowing too much and then calls for more borrowing.”
Osborne accused Labour of pursuing the “stupid policy” of trying to push up the cost of Government borrowing after Balls slammed the Government for clinging to the “illiterate fantasy” that low long- term interest rates are a sign of economic credibility rather than stagnation.