Harriet Harman slams 'Tory Budget'

Chancellor George Osborne's first Budget will "throw people out of work" and stifle growth, acting Labour leader Harriet Harman claimed today.

The financial statement was a "Tory Budget", she said, arguing that the Liberal Democrat elements of the coalition Government had "always fought against" many of the measures introduced by Mr Osborne.

Faced with fierce heckling as she responded to Mr Osborne's statement in the Commons, Ms Harman told Government MPs to "read the book" of Budget statistics, telling them growth would be lower as a result of the measures.

Ms Harman said it was Mr Osborne's first Budget but "we have seen it all before" from the Conservatives.

"This is a Tory Budget that will throw people out of work, that will hold back economic growth ... and will harm vital public services.

"Yes, it's his first Budget but it's the same old Tories, hitting hardest those who can least afford it and breaking their promises."

While this was "true to form" from the Conservatives, Ms Harman said it "includes things that the Liberal Democrats have always fought against - surely they cannot vote for this".

One of the measures opposed by Lib Dems at the general election was a rise in VAT.

When Mr Osborne announced plans to increase the rate to 20%, Commons Deputy Speaker Lindsay Hoyle was forced to intervene to restore order amid loud protests from Labour benches.

Ms Harman continued: "The Chancellor says his top priority is to cut the deficit.

"In order to get the deficit down, you need to keep economic growth up and you need to keep unemployment down.

"Today's Budget is bad for growth and that will make it harder to cut the deficit."

In a report today, the Office for Budget Responsibility (OBR) set up by Mr Osborne revealed "because of this Budget growth next year will be lower than it would have been under our policies to support the economy", Ms Harman said.

"They have revised growth for next year down from 2.6% to 2.3% because of the harm that his Budget does."

Ms Harman said: "Today's Budget is bad for jobs and that too will make it harder to cut the deficit."

She said that, according to the OBR forecast, the price of Mr Osborne's plans was "tens of thousands of people out of work".

This was a "high price to pay" and was the "equivalent in scale to putting every working man and woman in the city of Coventry out of work".

She warned that the Budget would hit private sector jobs as well as public sector jobs.

"The reality is you do not get borrowing down by pulling the plug on businesses, you do not get borrowing down by throwing people out of work and on to the dole ... you do not get borrowing down by stifling economic growth," she said.

"This reckless Budget, short-sighted approach, will jeopardise the recovery and make the deficit worse.

"And when you do that, you end up with more tax rises further down the track and that's unfair."

Ms Harman said it was not true that the richest people would pay the most.

"As the Prime Minister himself said on VAT, he said: 'It's very regressive, it hits the poorest hardest'. It does, I absolutely promise you," she said.

VAT penalised the poor and it was unfair when cuts in public spending hit areas where public services and benefits mattered most, she added.

"The impact of his changes to benefits and tax will be greatest in poorest areas. We agree that borrowing must be brought down but look at who we've chosen to bear the brunt..."

The area most affected by Mr Osborne's "austerity policy" would be Merseyside and the area least affected would be Cheshire, his own constituency, she said.

"Before the election, the Prime Minister said he had no plans to put up VAT and now, in his first Budget, he puts up VAT.

"During the election campaign, the Liberal Democrats attacked what they called the Tories' secret VAT bombshell.

"Little did we know that the Lib Dems had their own secret bombshell to drop on us - that they would vote for it."

Ms Harman said Greece was "no alibi" for the Government's austerity Budget.

"Deficits must be reduced but we must not risk undermining the fragile recovery," she insisted.

"This is a Budget based on re-written history and false excuses. They say there is no alternative. But the truth is this is what they want.

"This Budget isn't driven by economics. It's driven by ideology - their commitment to a smaller state.

"This austerity Budget is their choice and right now it's exactly the wrong choice."

Turning her guns on the Liberal Democrats, she said: "This reckless Tory Budget would not be possible without the Lib Dems.

"The Lib Dems denounced early cuts - now they are backing them. They denounced VAT increases - now they're voting for them.

"How could they support everything they fought against? How could they let down everyone who voted for them? How could they let the Tories so exploit them?

"They are just a fig-leaf. The Lib Dem Chief Secretary is just the Chancellor's fig-leaf. The Deputy Prime Minister is just the Prime Minister's fig-leaf.

"The Lib Dem leaders have sacrificed everything they ever stood for to ride in ministerial cars and to ride on the coat-tails of the Tory Government.

"Twenty-two Liberal democrat ministerial jobs have been bought at the cost of tens of thousands of other people's jobs.

"The Liberal Democrats used to stand up for other people's jobs -now they only stand up for their own."

She said Lib Dem Business Secretary Vince Cable had undergone a remarkable transformation from "national treasure to Treasury poodle" in just a few weeks.

The Opposition would support measures which were "fair and helped the economy" like the rise in capital gains tax, the retention of the 50p tax rate and the increase in personal allowances, although the hike in VAT would leave people feeling "short-changed".

Ms Harman said the country needed a Budget to support growth, protect jobs and cut the deficit fairly.

"What we got was a reckless Budget that pulls the rug out from under the economy."

Urging the Lib Dems to think of their constituents and oppose the proposals, she said: "Whatever they do, we'll vote against it."

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