Missed targets ‘costing billions’

Published: Monday 1st December 2014 by The News Editor

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Labour has accused the Government of costing the taxpayer tens of billions of pounds in lost revenues through the “abject failure” of its economic policies.

As Chancellor George Osborne prepares to deliver his set-piece Autumn Statement, Labour released figures which it said showed lower- than-expected tax receipts and ballooning social security payments had cost £116.5 billion over the course of the parliament.

Over the weekend, Mr Osborne said the strengthening economy had enabled him to throw a £2 billion lifeline to the cash-strapped NHS as well as investing in a major road improvement programme over the next five years.

However ministers are braced for official figures to be released by the Office of Budget Responsibility on Wednesday alongside the Chancellor’s statement to show a further deterioration in the public finances after sluggish earnings growth meant tax revenues came in lower than expected.

With the Tories committed to £7 billion in tax cuts – raising personal allowances for basic and higher rate tax payers – the Institute for Fiscal Studies warned of a new round of austerity after next year’s general election with some Whitehall departments set to lose a round a third of their budgets.

It sets the scene for what is likely to be a highly political statement with Mr Osborne seeking to draw the battle lines for the forthcoming election struggle.

Mr Osborne acknowledged that he faced “tough decisions” if he is to balance the books by 2018 as promised and he signalled a fresh squeeze on benefits if the Conservatives regain power in May.

Labour however said that ordinary families were paying the price for the Chancellor’s failure to fulfil his promise at the last general election in 2010 to clear the deficit and start paying down Britain’s debt by the end of the current parliament.

The party said that figures calculated by the independent House of Commons Library showed that over the course of the current parliament, income tax receipts were £66 billion lower than originally forecast, national insurance contributions were down £25.5 billion while social security spending is £25 billion higher than planned.

It said the loss was the equivalent of almost £4,000 for every taxpayer – resulting in persistently higher borrowing than the Chancellor had forecast.

Labour leader Ed Miliband said that millions of families had been left trapped in “the most prolonged cost-of-living crisis for a century”.

“For them this is a joy-less and pay-less recovery,” he said.

“The Government’s failure to build a recovery that works for every-day people and tackle the cost-of-living crisis isn’t just bad for every person affected, it also hampers our ability to pay down the deficit.

“Britain’s public finances have been weakened by a Tory-led Government overseeing stagnant wages which keep tax revenues low.

“The result has been David Cameron and George Osborne missing every single target they set themselves on clearing the deficit and balancing the books by the end of this parliament.”

Published: Monday 1st December 2014 by The News Editor

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