Liam Byrne: It is time to get serious, Mr Osborne

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The Independent Online

George Osborne admits that he devotes more time to politics than to economics, and on Wednesday we saw the proof.

In a serious debate on the pre-Budget report, he fired cheap shots when what was needed was a big judgement call. Alistair Darling set out the most detailed plan of any G7 country for halving the deficit over four years. He acted to secure the economic recovery and go for growth – because faster growth will cut the costs of unemployment. He set out plans which will rebuild the public finances fairly – because we need to get the timing right, not choke off the recovery by cutting too soon.

And, true to our Labour values, he promised to protect our schools, health, police and Sure Start – while making services smarter, more efficient and more responsive. His message was clear: we will tighten our belts, as families are doing. It will not be painless, but it will not be reckless.

In reply, all Osborne could offer was political knockabout – long on jibes but desperately short on serious policy. The contrast, not just in demeanour, but in sheer weight of policy, was striking.

Now that we have set out our plans, the time has come for Osborne to do the same. The broad contours of the Tory approach are becoming clearer. We know that by cutting support for the economy now, he risks a decade of austerity and low growth. We know that he favours unfunded tax cuts to the wealthiest. We know that by opposing our guarantees on public services, such as being certain of seeing a specialist within two weeks of your GP suspecting cancer, he's content to reduce public services to a gamble.

But there are more questions he has to answer. The key question in British political economy is this: Osborne says that he would close the deficit faster, but halving the deficit just a year faster than us would mean cutting £26bn from public services or increasing VAT to 23 per cent. Which will he choose?

On spending, Osborne has also failed in the first task of a shadow Chancellor – controlling his Shadow Cabinet colleagues, who have indulged themselves in the Tory habit of trying to be all things to all people, making spending pledges as they did so. The cost of the resulting list? Tens of billions of pounds.

Meanwhile, his plans to save money unravel by the day. His party claims that its plans to curb spending – including scrapping ID cards and the NHS IT scheme, bringing forward retirement age and capping public-sector pensions – would save up to £45bn. In fact, our analysis suggests they'd save less than 5 per cent of that. What else will he cut – or which taxes will he increase – to make up that gap?

At their party conference, the Tories claimed they could make £7bn in savings, including £3bn a year by the end of the Parliament, by cutting Whitehall and quango costs by a third. But our "Smarter Government" document, published just before the pre-Budget report, saves around that amount from central government alone – and in fact much more in the wider public sector. How can he go further than that?

Treasury figures, disclosed to Parliament, show that his claim to save £400m from cutting Child Tax Credits for households on more than £50,000 a year misses the mark by a country mile, saving just £45m a year. They reveal that to save £400m means cutting benefits from people earning just £16,000. Will he cut those benefits or will he admit he got it wrong?

We live in serious times, and people want serious answers from their politicians. This week, Alistair Darling delivered them. As a pretender to the same historic office, the time has come for George Osborne to set aside the lightly proffered laurel of the Parliamentary sketchwriter. He must answer the tough questions he has so far ducked. It's time for him to step up.

Liam Byrne is Chief Secretary to the Treasury