Chancellor George Osborne was accused of being “Scrooge rather than Santa” last night after offering few giveaways in his mini-Budget.
The central message of Mr Osborne’s Autumn Statement was that Britain must not abandon his controversial recovery strategy and he insisted repeatedly: “The plan is working.”
In an attempt to draw pre-election battle lines and seize the political initiative back from Labour, the chancellor claimed credit for positive economic signs and warned that the “biggest risk” facing the country would be a change of course.
However, Labour and the SNP attacked Mr Osborne, saying he was “in denial” about the cost-of-living crisis.
The chancellor launched a fresh round of austerity measures, including £3billion of government cuts, plans to bring forward increases in the pension age and a new cap on overall welfare spending.
However, he sweetened the pill by cancelling a planned rise in fuel duty, scrapping employer national insurance contributions for under-21s and raising the income tax personal allowance to £10,000 from April.
Mr Osborne’s job was made easier yesterday by upbeat news from the independent Office for Budget Responsibility (OBR).
It predicted that the UK’s finances would finally be back in surplus in 2018-19, while more than doubling this year’s growth forecast from 0.6% to 1.4% and revising up the following year’s from 1.8% to 2.4%.
Public debt this year is due to total 75.5% of GDP, which is about £18billion lower than was forecast in March, and this year’s £111billion borrowing figure is expected to fall each year before reaching £23billion in 2017-18.
Mr Osborne said: “This statement shows that the plan is working.
“It’s a serious plan for a grown-up country. But the job is not done.”
Shadow chancellor Ed Balls said: “Isn’t this the truth – after three damaging years of flatlining, after the slowest recovery for over 100 years, from a chancellor and a prime minister who said ‘We’re all in this together’ and then gave a huge tax cut to millionaires – working people aren’t better off under the Tories. They are worse off under the Tories.”
Despite £3billion of cuts at Whitehall, UK ministers said the Scottish Government’s grant would increase by more than £300million under the Barnett formula.
However, Scottish Finance Secretary John Swinney also criticised the statement, saying: “This is delayed action directed not at helping people with the cost of living but at embedding austerity.”
Jonathan Loynes, chief European economist at Capital Economics, said: “The chancellor resisted the temptation to spend the proceeds of stronger growth on improving the government’s still-depressed opinion poll ratings. Of course, the shackles may loosen as the 2015 general election looms closer, particularly if the government continues to struggle to take credit for the economic recovery.
“For now, though, Mr Osborne has played Scrooge rather than Santa.”
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