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."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Arts and Entertainment
'Deep Breath' is Peter Capaldi's first full-length adventure as the twelfth Doctor
TVFirst episode of new series has ended up on the internet
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

Web Developer (C#, ASP.NET, AJAX, JavaScript, MVC, HTML)

£40000 - £45000 per annum + Benefits + Bonus: Harrington Starr: Web Developer ...

C# R&D .NET Developer-Algorithms, WCF, WPF, Agile, ASP.NET,MVC

£50000 - £67000 per annum + Benefits + Bonus: Harrington Starr: C# R&D .NE...

C# Developer (Web, HTML5, CSS3, ASP.NET, JS, Visual Studios)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Developer (ASP.NET, F#, SQL, MVC, Bootstrap, JavaScript)

£55000 - £65000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?