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Osborne Rejects Public Service Cuts Fears

(c) Sky News 2015
 

George Osborne dismissed fears over spending cuts to public services raised by the Office for Budget Responsibility.

Speaking on Sky News, Mr Osborne said the cuts were necessary but did not pinpoint exactly where the axe would fall.

He said: "People know that we have been careful with public money, we want to go on doing that at the same pace we have been doing that over the next couple of years."

The Office for Budget Responsibility (OBR) report released on the day of the Budget says the Conservatives' cuts leave "a rollercoaster profile of implied public services spending through the next parliament".

The OBR report projects a "much sharper squeeze" on spending in 2016-17 and 2017-18, which would be followed by a sharp increase in 2019-20.

Discussing his plans for a further £12bn welfare savings cuts, Mr Osborne said: "I'm not suggesting that these things are easy, but they are necessary if we are going to go on living within our means.

"We've saved £21bn in this parliament and we need £12bn in the next ... People can judge me by my track record.

"I'm a Chancellor who's made these sensible, balanced decisions and we can see the benefits in this massive moment for the UK, when debt as a share of national income is falling."

Shadow chancellor Ed Balls criticised Mr Osborne's cuts as "extreme" and told Sky News: "I think it is risky and dangerous. That is not what Labour will do. We will have a balanced plan to get the deficit down in the next parliament, to cut the Budget deficit, to get the national debt falling."

However, he admitted: "We will have to make sensible spending cuts and we will have some tax rises on the highest incomes, from the people at the top and also we will have a focus on raising people's wages.

"We are going to scrap the police and crime commissioners and save £250m in police budgets, £500m savings in local government, £230m in education and defence procurement ..."

The Lib Dem today unveiled  their own Budget to distance themselves from their coalition partner's Budget. 

George Osborne's no-gimmicks, no-frills Budget has set the dividing lines between the parties ahead of May's election.

He claimed Britain was "walking tall again" after five years of austerity.

Shadow Business Secretary Chuka Umunna said: "I'm not sure that I would want my public services to be on a roller coaster, I would want to have decent provision for my constituents and all across the country."

Mathew Hancock, the Conservative Business Enterprise and Energy Minister, responded to the criticism.

He said: "We have a plan to deliver and anyone who wants to spend more money or go more slowly will see the debt rising as a proportion of GDP, and that is exactly the sort of mistake that got us into this mess in the first place."

Mr Osborne's Budget did have some sweeteners for first time buyers and savers, including the first £1,000 of savings being tax free for a basic rate tax payer.

He also announced a help-to-buy ISA under which first-time buyers saving for a deposit will receive a 25p top-up from the Government for every pound they put aside up to a maximum of £3,000, on top of savings of £12,000.