Deficit heading for £100bn

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LABOUR Shadow Chancellor Ed Balls has said, if elected, a Labour government would match the Tories cut for cut.

He said that Labour would be ‘tough on the deficit and tough on the causes of the deficit too’.

Balls’ comments came in anticipation of Tory Chancellor George Osborne’s Autumn Statement delivered today.

Signalling big cuts to public expenditure, Balls said that the deficit was ‘big and it has got to come down’.

He said: ‘Unlike George Osborne, I am not going to come along and make promises I can’t know I can keep, unfunded commitments.’

Asked to name some substantial spending cuts a Labour government would make, Balls repeated announcements he has already made such as stopping the winter fuel allowance for pensioners who are higher rate tax payers.

Earlier in the year Balls pledged: ‘The next Labour government will balance the books and deliver a surplus on the current budget and falling national debt in the next Parliament.’

Speaking earlier in Nottinghamshire, Labour leader Ed Miliband said Prime Minister David Cameron and George Osborne, had missed ‘every single target they set themselves on clearing the deficit and balancing the books by the end of this Parliament’.

Meanwhile George Osborne’s plan to cut the UK’s budget deficit has been shattered by the revelation that the government will have to borrow as much as £75 billion more than it had originally planned over the next five years.

In other words the cuts have only just begun.

A fiscal forecast from the Office of Budget Responsibility (OBR) has revealed that the UK’s economic outlook is much bleaker than the government has let on.

The coalition aimed to reduce the deficit in 2015 to £40 billion, but the latest figures show that it will actually be almost £100 billion.

The report suggests that the total borrowing figure will be revised upward, with the complete budget deficit expected to be £280 billion by 2020.

The figures show that the UK will have a deficit of £75 billion more than previously expected.

The increased government borrowing has been affected by falling oil prices and decreased revenue from stamp duty and income tax.

The government has already had to borrow £3.7 billion more during the first half of 2014.

While the Tory government has boasted about a ‘significant rise in employment levels’, a large proportion of the 700,000 newly employed workers are tied to zero-hour contracts, which has further had a negative impact on the levels of income tax the government receives, because often zero-hour contract workers are forced to rely on in-work benefits.

A spokesperson for the Joseph Rowntree Foundation said: ‘The labour market has changed significantly in the last ten years.

‘There has been a vast increase in insecure work – zero hour contracts, part-time work and low-paid self-employment, which means that getting a job does not necessarily mean getting out of poverty.’