Budget: Harman says 'reckless' Budget will hit the poor

Budget is 'bad for jobs' says Labour's Harriet Harman

Harriet Harman has called the coalition Budget "reckless" and said it would lead to thousands losing their jobs.

The Labour leader said the programme of spending cuts and tax rises announced by George Osborne would hit the poorest hardest and jeopardise the recovery.

The proposed rise in VAT to 20% was "unfair" and contradicted pre-election statements by the Tories and Lib Dems that they had no plans to increase it.

The Budget was driven by "ideology not by economics", she told MPs.

Among a swathe of tax and benefit changes designed to reduce the deficit, the main rate of VAT will rise from 17.5% to 20% from next January. Public sector pay for those earning above £21,000 will be frozen for two years and child benefit frozen for three years.

Mr Osborne said the measures were "tough" but were needed to "pay the bills for past irresponsibility" and put the public finances on a sustainable footing by the end of the Parliament.

'Broken promises'

But Ms Harman said the Budget would harm economic growth and, quoting figures from the Office of Budget Responsibility (OBR), claimed it would "throw" thousands of people out of work.

According to the OBR's latest forecasts, she said economic growth would be lower next year than would have been the case under a Labour government.

She rejected the chancellor's claims that the VAT rise was "unavoidable" due to the dire state of the public finances, saying it was the government's choice and the "wrong choice" as it would "entrench unfairness".

Turning on the Lib Dems, she said the debt crisis in Greece - which Lib Dem leaders have cited as one of the reasons why they agreed to tougher spending and tax measures - was "no alibi" for their backing.

Challenging Lib Dem MPs unhappy with aspects of the Budget to vote against it, she suggested that the party was a "fig leaf" for long-held Conservative ambitions of cutting the size of the state.

"It is the chancellor's first Budget but we have seen it all before," she added. "It is the same old Tories, hitting hardest at those who can least afford it and breaking their promises."

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The Budget, June 2010

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