George Osborne’s economic plans are a complete nonsense because they contain no admission that taxes will have to rise after the election to bring the deficit down by 2017-18, the deputy prime minister has said.
Nick Clegg insisted taxes would have to rise in the next parliament. Speaking on Radio 4’s Today programme, he said: “What the Conservatives are saying is a complete and utter nonsense. There is not a single developed economy anywhere in the world that has balanced the books and only done so on the backs of the working-age poor, which Osborne has now confirmed several times he wants to do.
As he set out his party’s plans to remove tax breaks for wealthy pensioners, Clegg also accepted that the public finances were not improving as fast as planned due to tax receipts failing to match forecasts, but he refused to say if this would require the coalition to put back its deficit plans.
He said: “If tax receipts are not as buoyant as predicted then of course that has an effect. Time will tell if that is a semi permanent effect or a temporary blip, but it means it comes down a little less than predicted.”
He also said the government would be legislating to guarantee its future capital spending and foreshadowed an announcement expected on Tuesday by the Liberal Democrat Treasury chief secretary Danny Alexander setting out a multibillion-pound housing investment programme in the next parliament, one of the chief Labour spending pledges.
Clegg’s unusually blunt attack on his Conservative colleagues precedes an autumn statement in which the two coalition parties, the Tories and the Liberal Democrats, will agree on the need to bring the deficit into balance by 2017-18, but agree to disagree on how to achieve this.
The Item Club is one of many economic forecasters to suggest the government may need another year to bring the deficit under control. But Clegg insisted savings of £100bn had been made in this parliament, and the savings required in the next parliament were “substantially lower”.
He added: “Some of the breathless rhetoric that suggests we will enter a new world where the level and scale of the cuts are going to be melodramatically much more than what we have done before I don’t agree. The climb has become slightly deeper but not in a way that I would think is impossible to deliver.”
In the runup to the autumn statement, the government has focused on announcing extra cash for the health service and a major roads programme. Osborne confirmed a one-off payment of £1.5bn for the NHS – which was welcomed by its chief executive, Simon Stevens, as a down payment on what the government needed to spend.
Clegg insisted the deficit was coming down and it would have been more or less halved in this parliament. He also made a virtue of the way in which the government through the parliament had changed its initial economic plan by slowing the pace at which the deficit was brought under control.
He said: “This government has not been dogmatic about deficit-reduction plans. We have been firm, we have been consistent, but when it became obvious that the deficit was not going to be eliminated by the end of this parliament, far from doing what some people urged me to do – which was to chase our tail, cut even more – we said no, it is going to take a little longer, and it will be three years into the next parliament before we wipe the slate clean and balance the books for future generations.
“No one would have thanked us if we had stuck dogmatically to the original timetable and implemented even more stringent cuts. We stuck to the pace which we think is economically socially and politically sensible. If this parliament has been all about rescuing the British economy, pulling the economy back from the brink, from the precipice, which is where we found it back in 2010, I think the next parliament and beyond is about renewing the British economy and making sure that all parts of the country can fairly benefit from the economic recovery as it takes root.”
He challenged claims that the bulk of the cuts necessary for the deficit reduction have still to be implemented in the next parliament.
Clegg was speaking outside Stonehenge to emphasise plans for an underpass to keep cars from the historic site. Asked if the £15bn road-spending pledge was new, he said it did not matter whether the money was new, since the public just wanted to know if the road programmes would go ahead. “I can’t imagine the circumstances in which anyone would want to reverse this decision. Not least because we are also enshrining the main financial commitment in law,” he said.
The Stonehenge monument had been around for 3,000 years, he said, and sometimes “the debate feels as if it’s gone on almost as long, about how we can protect this world heritage site, protect the environment, but also make sure that we have a proper dual carriageway, expressway, all the way down the A303 and A358, joining up with the dualling of the A30, right down into Cornwall, so that people can get to the south-west much more quickly and easily than they can at the moment”.
He also promised to unblock traffic “bottlenecks across the Pennines”, adding: “We will make sure the east of England is properly linked to the rest of the country through the completion of the dualling of the A47. Those are some of the main announcements we’re making today and they are announcements which will not be reversed.”
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