Labour will give “serious consideration” to certain measures in the government’s budget plans, the party’s acting leader, Harriet Harman, has said, adding that opposition parties were often too tempted to oppose everything a governing party does.
Responding to George Osborne’s budget statement on Wednesday she also accused the chancellor of putting his personal ambitions to become prime minister at the heart of the budget.
“When you’re in opposition, the temptation is to oppose everything the government does – and believe me, I feel that temptation,” said Harman, responding to the hour-long budget speech.
“But [the Labour party will] best serve this country by being a grown-up and constructive opposition,” she said. “So while we will fiercely oppose policies that hit working people, and we will expose policies that are unworkable, where the government comes forward with ideas that are sensible we will be prepared to look at them.”
Labour, said Harman, would be a different kind of opposition, “so there are measures in the budget which we will give serious consideration to”.
Osborne used his budget speech to set out £17bn of spending cuts – £12bn from welfare and £5bn from targeting tax avoidance – saying that overall spending reductions of £37bn would be needed over the parliament.
The first budget from a Conservative government since 1996 included the scrapping of student maintenance grants and billions cut from working tax credits. Osborne announced that a new higher minimum wage of £7.20, the “national living wage”, would be introduced by April, going up to £9 by 2020.
Harman accused the chancellor of delivering a budget that was more about his own personal ambitions to “move next door”, to 10 Downing Street, than it was about economic strategy, but she admitted that a Labour government would have cut spending outside protected departments and reduced the welfare bill.
Harman focused much of her response on the lack of government investment in infrastructure – making regular reference to the government’s “pausing” of the electrification of the Midland mainline and TransPennine train lines – which she said was contributing to the UK’s poor productivity levels.
“When it comes to productivity, this chancellor’s record is poor,” she said. “It’s not as if people aren’t working hard. But the things that turn their work into high productivity – skills, investment and infrastructure – are not there for them.
“That’s why we in the UK produce on average 30% less per hour than workers in Germany, France and the US. Output per hour in this country is 17% below the average for the G7 – the lowest we have been in the productivity league table since 1992.”
Harman argued that while the chancellor “talks big about empowering local government in his devolution plan and the new City deals”, local government had taken a disproportionate hit from his spending cuts, particularly in the north and in areas that most need economic regeneration.
“The 10 most deprived areas had their spending power cut by 12 times the amount of the 10 least deprived areas,” said Harman. “Local government is key to regeneration: it drives growth throughout the country, raising productivity and crucially rebalancing our economy. But you can’t empower local government if you impoverish it.”
Tackling the biggest surprise of the chancellor’s speech, the announcement of the introduction of a national living wage, Harman said that one of the reasons the minimum wage was introduced by Labour was to tackle the rising costs of in-work benefits, something Osborne has stated as his mission.
“The chancellor now claims that he wants a high wage economy with lower welfare bills. We all want that, but he’s putting the cart before the horse.
“At the heart of this budget is his announcement – heavily trailed in the press, but curiously not mentioned in the election campaign – to cut tax credits for people in work. But doing that without an effective across-the-board plan for higher pay will make them worse off. He’s saying he’ll cut welfare and wages will magically go up. We say: get wages up and the welfare bill will come down.”
Harman, who became Labour’s interim leader when Ed Miliband stepped down after the party’s defeat in May’s general election, said it was up to her party to ensure that “when [Osborne] says it’s fair, it is fair”. She said: “When he comes up with some new proposal, [we need to ensure] he consults in good faith to make sure it’s workable, and before he makes more promises, he delivers on those he’s already made.”
This article was written by Frances Perraudin, for theguardian.com on Wednesday 8th July 2015 16.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010