Britain faces 'real economic crisis' warns George Osborne as he defends Spending Review plans

Mr Osborne also countered criticism that his plan was created with an eye on the upcoming election battle with Labour

Chancellor George Osborne today warned that Britain would face a "real economic crisis" if the country failed to follow the economic plan set out in yesterday's Spending Review.

Mr Osborne also countered criticism that his plan - which imposes a further £11.5 billion in cuts on Government spending - was created with an eye on the upcoming election battle with Labour.

Speaking on BBC1's Breakfast Mr Osborne defended the spending review saying that his plan was taking Britain from "rescue to recovery".

"We are out of intensive care," he added.

"It's taken longer than anyone would have hoped. That's partly because of all the things that went wrong in Britain, in our banks, but it's also because of what's happened elsewhere in the world, particularly in the eurozone.

"We face a choice as a country. We can either give up on the plan and go back into intensive care or we can go on confronting our problems and making sure Britain lives within its means.

"The basic fact is that Britain can't afford at the moment the size of the Government it's got, the size of the services it's got. We've got to take tough decisions about what we do about that.

"I've tried to prioritise the things that people really care about and most depend on - like the NHS and social care and schools - and also put money into the long-term things, the schools, the science and road-building and railways that are going to create an economy which creates jobs and creates income for the whole country."

Mr Osborne also denied his plan was an election pitch with one eye on the battle with Labour telling Radio 4's Today programme: "This is not an election pitch, this is about moving this economy from rescue to recovery and an economic plan that is taking Britain out of intensive care.

"I also think it is about reforming the state in a progressive way. If you look at the choices we made yesterday, we put more money into the pupil premium which helps the lowest income kids in our schools, we put more money into the troubled family initiative for 400,000 families who most need the support of the state to get their lives together, we put more money into social care.

"Distributional impact (analysis) of the entire consolidation shows that it is the richest in society who have lost the most proportionately."

Shadow Chancellor Ed Balls criticised the Mr Osborne's plans questioning whether the plans would bring the promised savings.

Mr Balls said Labour accepted the need to reduce the cost of social security - and would consider whether it can give its backing to a controversial new seven-day wait before claiming benefits - but accused the Government of using "nasty, divisive rhetoric" to try to turn voters against welfare claimants.

Mr Balls was challenged over whether Labour would back the seven-day wait for people to claim benefits after losing their jobs, which has been denounced by unions and charities.

He told BBC Radio 4's Today programme: "We will need to look very carefully at what this means. We'd supported when we were in government a three-day wait, so the principle of a wait is fine. With the move from three to seven days we need to know how much money will be saved, who from and how it would work.

"If this is a blank cheque to Wonga and other payday loan companies, that would be a very bad thing. If, on the other hand, it's a sensible way to focus on job search, it might not be."

But he added: "We've had a whole series of announcements from the Government over the last three years which claimed to save money but ended up not working and being ineffective. The welfare and social security bill has been rising.

"I think it's important that we find ways of saving money if we can, but in a fair way.

"I would have a compulsory jobs guarantee which would mean that every young person at 12 months unemployment would have to take a job, and there would be a job for the long-term unemployed at two years. We would pay for that by a tax on bank bonuses.

"I think that would be tougher than the Government but it would also get people back to work and save money.

"The reality is that, for all the Government's nasty divisive rhetoric on welfare and social security, they've actually been very bad at controlling the bills. I would have a tougher approach but also a fairer approach at getting young people back into work."

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Maths Teacher

£90 - £160 per day: Randstad Education Leeds: Secondary Science Teacher (mater...

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for an ...

Maths Teacher

£22000 - £37000 per annum: Randstad Education Leeds: A West Yorkshire School i...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week