Saturday, 29 June 2013

The Spending Review shows that David Cameron’s economic plan has failed

This week David Cameron and George Osborne presented a Spending Review in which they were forced to make more cuts because their economic plan has failed.

They have failed on living standards, failed on growth and failed on the deficit. And Britain’s families and public services are paying the price. The scale of the cuts is a direct result of their failure to get the economy to grow.

It doesn’t have to be this way. Instead of planning cuts two years ahead George Osborne should be acting to boost growth this year and next year

Boosting growth and living standards this year and next year would bring in more tax revenues and reduce the scale of the cuts needed in 2015. That’s why the Government should be taking action now to boost economic growth – for example, by bringing forward infrastructure investment this year as the IMF has called for.

But if David Cameron and George Osborne continue failing to act, Labour will have to deal with a difficult inheritance in 2015. Ed Miliband and Ed Balls have said these totals for day-to-day spending in 2015/16 will have to be our starting point, but we will make different choices.

For example, we would not continue paying the winter fuel allowance to the richest 5 per cent of pensioners at a time when the NHS and social care are under such pressure. And we would not be paying for new free schools in areas where there are enough school places, while parents in other areas struggle to get their children into a local school.

And our root and branch review of every pound spent by government will look at how we can root out waste and inefficiency so we can focus spending on our priorities and on areas where we can save money in the long term.

Labour will root out waste and have an iron discipline on public spending, but we will make different choices so that we can turn our economy around and get the deficit down in a fairer way.