Autumn Statement Labour response: The average worker is £2,000 worse off

Shadow Chancellor Ed Balls delivers forceful reply

An average worker in a full-time job is £2,000 worse off than when George Osborne came to office, Labour said today, as Ed Balls lambasted the Chancellor for breaking his promises on reviving the economy.

In rowdy scenes, the shadow Chancellor focused his party’s response to the Autumn Statement on the failure of wages to keep pace with prices over the last four and a half years.

He managed to avoid a repeat of his disastrous Commons appearance last year when he struggled to make himself heard in the face of sustained heckling.

Mr Balls foreshadowed Labour’s likely line of attack at next year’s general election as he told MPs that pay had lagged behind inflation for all but one of the last 53 months.

“Working people are now £1,600 a year worse off than they were in 2010. Someone in full-time work is now £2,000 a year worse off,” he said.

“For working people there is a cost-of-living crisis and that squeeze on living standards is not only hitting family budgets - it has also led to a shortfall in tax revenues.”

Mr Balls claimed Mr Osborne’s failure to deliver on his pledge to eradicate the deficit meant that Britain had been forced to borrow £219bn more than originally forecast.

The latest report from the Office for Budget Responsibility proved that the Chancellor’s promises were “in tatters”, he added.

He said: “We all know he’s changed the way he styles his hair, but he can’t brush away the facts. People are worse off and he’s failed to balance the books in this Parliament.

“I’ve got to say, for all his strutting, for all his preening, for all his claims to have fixed the economy, he promised to make people better off, working people are worse off.”

Mr Balls said the weakness of the eurozone could not explain Britain’s export performance was so much worse than other countries using the single currency.

He also warned that numbers of apprenticeships for young people were falling and that house building had reached its lowest level since the 1920s.

Mr Balls said welfare spending in the current Parliament would be more than £20bn higher than forecast, casting doubt on the Chancellor’s claim to make further cuts in the next Parliament.

* Vince Cable has told his officials they should avoid working with the Treasury to identify cuts for the next Parliament. The Business Secretary has also asked the independent Office for Budget Responsibility to set out the difference between Tory and Lib Dem economic plans after the general election.

Mr Cable made the demands as the Liberal Democrats seek to distance themselves from Tory pledges of cuts and more austerity in the run-up to the General Election.

Mr Cable said his Conservative colleagues wanted to cut public spending “rather more brutally than we think is necessary or desirable”.