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UK Politics

Ed Miliband accuses Government of 'total arrogance'


Prime Minister David Cameron and Chancellor George Osborne were accused of "self-satisfied, smug complacency" after figures showed Britain's economy shrank at the end of last year.

The Office for National Statistics estimated a 0.2% contraction between October and December, figures the Prime Minister said were "disappointing" but not unexpected.

Mr Cameron said they reflected the "overhang" of the debt and deficit, squeezed household incomes and the eurozone crisis.

At Prime Minister's Question Time in the Commons Mr Cameron said: "This is the year we have to take further action to get our economy moving, but the most important thing is to have a credible plan to get on top of the deficit which has given us the lowest interest rates for over a hundred years."

He insisted there was "not one ounce of complacency" but Labour leader Ed Miliband accused the Government of "total arrogance".

Mr Miliband told him: "You and your Chancellor are but the byword for self-satisfied, smug complacency and that is the reality."

Mr Miliband said, 18 months into Mr Cameron's Government, "our economy is not growing, it's shrinking".

He asked: "What's gone wrong with your economic plan?"

Mr Cameron said: "These are extremely difficult economic times. These are disappointing figures, they are not unexpected figures, they are what the Office for Budget Responsibility forecast - a small decline in GDP at the end of last year.

"But I will be frank with you, I think they reflect three things: they reflect the overhang of the debt and the deficit that we have to deal with.

"They reflect the higher food and fuel prices that put a squeeze on household income towards the end of last year.

"And, yes, they also reflect the crisis in the eurozone that has frozen Europe's economies.

"The forecasts for France, for Germany, for Spain, for Italy for the end of last year forecast as great a decline or in many cases a greater decline."

Mr Miliband claimed "people are fed up" with Mr Cameron's excuses and said growth had been "flatlining" since the autumn 2010 spending review, well before the eurozone crisis.

"What has characterised the Government's approach throughout this period? Total arrogance."

He asked: "How bad do things have to get in our economy to shake you out of your complacency?"

The Prime Minister said: "There is not one ounce of complacency; that is why we are cutting corporation tax, we scrapped Labour's job tax, we introduced the enterprise zones, we are investing record sums in apprenticeships."

Labour, he said, had only one answer: "To deal with a debt crisis by borrowing more and adding to debt.

"That is your answer, that would wreck our interest rates, wreck our economy and make things much worse."

As the raucous session continued, Mr Miliband said the Government was being forced to borrow £158 billion more than forecast because of the "failure" on growth and unemployment.

He told Mr Cameron: "You said unemployment will fall: it isn't. You said the economy would grow: it hasn't. You said we are all in this together: we are not.

"When will you face up to the fact it is your policies that are failing our country?"

The Prime Minister said: "Our economy grew last year... there are more people in work today than there were at the time of the last election."

Following yesterday's decision by the International Monetary Fund to slash its growth forecasts for the UK, Mr Cameron said shadow chancellor Ed Balls had demanded the Government listen to the body and change course.

But Mr Cameron told MPs the IMF said: "We do not think that fiscal consolidation adds to the problem. Fiscal consolidation is part of resolving the problems facing the UK economy."

He added: "That is the truth, there are two parties in this country taking responsibility for clearing up the mess, there is one party refusing to take responsibility for causing the mess."