This is final proof that Plan A has run out of road, says Balls

  • @NigelpMorris

The shadow Chancellor Ed Balls declared yesterday that George Osborne's mini-Budget was final proof that "plan A has failed – and has failed colossally".

In a wide-ranging attack on the Coalition Government's strategy, he said that deep cuts to spending had aggravated the country's economic woes by snuffing out recovery.

Mr Balls cited "flatlining" growth figures, rising unemployment and increased borrowing as evidence that the Chancellor needed to order a dramatic change of direction.

In stormy scenes in the Commons, Mr Balls said: "With prices rising and unemployment soaring, families, pensioners and businesses already know it's hurting. And with billions more in borrowing to pay for rising unemployment, today we find out the truth – it's just not working."

Mr Balls said: "For his sake, for his party's sake and in the national interest, the Chancellor needs to change course and he needs to do so now."

He attacked the Chancellor for trying to blame "anyone or anything... but himself" for the grim economic forecasts facing Britain, listing "the Labour government, the snow, the royal wedding, the Japanese earthquake, higher inflation, VAT, the eurozone, low-paid dinner ladies and teaching assistants".

Mr Balls mocked David Cameron and Mr Osborne for their insistence after the election that they had steered the British economy "out of the danger zone".

He said: "We know the truth – cutting too far and too fast has backfired and every one of the Chancellor's claims of a year ago have completely unravelled." Mr Balls added: "How much worse does it have to get? How many more young people have to lose their jobs? How many more businesses have to go bankrupt? How many billions more in borrowing do we need to pay for failure before this Chancellor finally sees sense?"

He lambasted the Autumn Statement as a "a cobbled-together package of growth measures which he must know do not address the fundamental problem that is his rapid, reckless and deflationary plan that is choking off the recovery and pushing up borrowing".

Andrew Tyrie, the Tory chairman of the Commons Treasury Select Committee, welcomed moves to encourage the banks to lend more cash to companies: "Britain's recovery depends on thousands of small businesses in our constituencies that need the confidence and the cash to invest and grow."

David Miliband, the former Foreign Secretary, warned that 250,000 young people had been unemployed for more than 12 months, over 100,000 more than 18 months ago. The Labour MP Michael Meacher accused the Chancellor of "merely tinkering at the edges" because plans for infrastructure spending of £5bn represented just 0.7 per cent of current expenditure.

Labour's Barry Gardiner said the investment was welcome, but claimed it would be "paid for out of the pay packets of individuals both in the private and the public sector".

The Green MP, Caroline Lucas, protested over subsidies being offered to heavy industry to offset the cost of meeting targets for reducing carbon emissions. She protested that that the Chancellor had "taken over £250m from hard-pressed families and given it to some of the country's biggest polluters".

The left-wing Labour MP John McDonnell claimed that while some families were relying on food parcels, a few executives were seeing their pay packets rocket. He said ministers had to tackle the "obscene" inequality in society.

Robert Halfon, the Tory MP for Harlow, thanked Mr Osborne for "listening to millions of hard-pressed motorists" and vetoing next year's planned increases in fuel duty.

In the Commons: Clarke casts his vote for Plan Zzzzzz

You can gauge the solemnity of a public occasion by whether Ken Clarke falls asleep during it.

As George Osborne grappled with grim forecasts and complex figures to give the nation his take on the economy yesterday, the Justice Secretary did rather more than simply nod in agreement as his younger colleague addressed the House.

Mr Clarke's eyes were rested and, to all appearances, he paid another of his brief visits to dreamland.

Previous events thathave caused Mr Clarke to succumb to drowsiness include Mr Osborne's Budget speech in March, and the US President Barack Obama's speech in May in the House of Lords.