Ed Miliband has warned that the pain of austerity will worsen if the Tories win the general election, and accused the party of seeking to hide an “extreme plan” to impose “colossal” spending cuts in the next parliament.
The Labour leader said that Osborne had failed to mention the NHS in his budget, arguing that his plans for cuts threatened the NHS because the chancellor would struggle to impose deeper spending reductions on the police, defence and local government. Miliband told the Commons: “They won’t be able to deliver those cuts so they will end up cutting the National Health Service. That is the secret plan that dare not speak its name today. You can tell they are really worried about it.”
The Labour leader had earlier said: “The glaring omission from this Budget statement was the National Health Service and public spending. It was a completely extraordinary omission. Where was that discussion of the National Health Service and investment in public services?”
In the traditional response to the budget by the leader of the opposition, the Labour leader said: “No one’s going to take lectures on fairness from the Trust Fund Chancellor and Bullingdon Prime Minister.”
The Labour leader said the chancellor had glossed over “big cuts” in spending planned between 2015-16 and 2018, challenging Osborne’s claim that Britain was “walking tall” after five years of austerity. He pointed out that the budget red book said that day-to-day government spending, known as departmental expenditure limits (DEL), is due to fall from £371.9bn in 2016-17, to £361.4bn in 2017-18 before rising slightly to £363.2bn in 2018-19. Public spending, he said, then jumps noticeably to £387bn in 2019-20.
Miliband told MPs: “He has an extreme plan today. He didn’t say it in his statement, but he can’t hide what is in his red book. It is here in the red book in black and white on page 69. It shows his plan for extreme cuts in the next parliament. Table 2.4 of the red book shows he is trying to hide big cuts between 2015/16 and 2018.”
The Labour leader said that the projections offered the same level of cuts in the next parliament as in the current one – and that that pace of cuts would accelerate in the next few years. “So let me tell the House what the chancellor tried to hide. His plan offers at least as many cuts in the next parliament as this one and actually the pace of cuts in the next few years is faster than the cuts in the last few years. So here’s the thing, and I think it is very important the country knows this. He came along today to try and suggest that the pain was over. But if they get back, it isn’t. Their failure on the deficit means they are planning massive cuts in the next parliament – billions of pounds of cuts in the next parliament.”
Subsequently, the Office for Budget Responsibility spoke of a “rollercoaster profile” of public spending in the next parliament. The OBR put this down to the chancellor’s decision to backtrack from plans to reduce public spending as a share of GDP to levels not seen since the 1930s. When that projection first surfaced in the autumn statement, it was successfully seized on by Labour as a line of attack.
Osborne signalled a retreat on this front in the budget when he announced that he plans to run an overall surplus of £7bn by 2019-20 rather than the £23bn he outlined in the autumn statement in December. The OBR confirmed this analysis in its economic and fiscal outlook published at the same time as the budget. It said that “public spending as a share of GDP no longer falls to a post-war low in 2019-20”.
In rejoinder to Miliband’s remarks, Andrew Tyrie, the Conservative chairman of the commons treasury select committee, said: “It’s a tall order to make his speech when the economy is weak, but it’s when it’s strong, it really is an impossible task. And the economy is strong, with the best growth in the G7 last year.
“Chancellors should be judged on the performance of the economy during their tenure, and we now should accept that the chancellor, this current chancellor deserves a good deal of credit for the improved performance of the British economy.”
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