George Osborne has lashed out at criticisms of his plans for further public spending cuts in the next parliament, accusing the BBC of hyperbolic coverage and conjuring up bogus images of the 1930s depression.
The chancellor voiced his anger during a BBC Radio 4 Today programme interview in which he was asked whether he agreed with projections by the Office for Budget Responsibility (OBR) that cuts will reduce the state to its lowest size since the 1930s.
He said: “When I woke up this morning and listened to the Today programme it felt like I was listening to a rewind of a tape of 2010 with BBC correspondents saying Britain is returning to a sort of George Orwell world of the Road to Wigan Pier and that is such nonsense. I would have thought the BBC would have learnt from the last four years that its totally hyperbolic coverage of spending cuts has not been matched by what has actually happened. What I reject is the totally hyperbolic BBC coverage on spending cuts. I had all that when I was interviewed four years ago and has the world fallen in? No it has not.”
Saying the deficit has been halved since 2010, he insisted: “I am the first to say difficult decisions are going to be required. Government departments are going to have to make savings. I am not pretending these are easy decisions or that they will have no impact. But the alternative of a return to economic chaos, of not getting on top of your debts, is not a world I want to live in.”
He said projections of the cuts required in non-protected departments in Whitehall made by the Institute for Fiscal Studies thinktank were wrong because they assume no savings would be made in the welfare budget. Osborne again set out plans to freeze work tax credits and to lower the welfare cap to £23,000.
He said he had already made £20bn of cuts to the welfare budget, adding: “If we didn’t make those decisions on welfare the alternative was to borrow more, massively raise taxes or cut departmental budgets.” He said he wanted a balanced package.
He said he had planned for £13bn of extra savings next year and insisted crime was down and the health service doing well despite the cuts.
He added he was holding to his pledge for income tax cuts after the election, saying he had increased the personal allowance further in the autumn statement.
Figures published on Wednesday show the Treasury is about a third of the way towards the welfare cuts Osborne said were required before the autumn statement,
In its report accompanying the chancellor’s statement the OBR said public spending would fall from from £5,650 a head in 2009-10 to £3,880 in 2019-20.
Public spending as a proportion of gross domestic product was projected to fall to 12.6% in 2019-20, its lowest level since the 1930s.
The OBR chairman, Robert Chote, described it as a “very sharp squeeze”. About 60% of this reduction is forecast to come in the next parliament.
Osborne accepted on Wednesday that the budget deficit – due to be more than £90bn this year – was not closing as fast as he had hoped.
Ed Balls, the shadow chancellor, refused to say when Labour would aim to bring the deficit back into balance, an issue on which he is likely to make a decision in a Commons vote in the new year.
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