Johnson attacks Osborne cuts in first Commons clash

  • Published

Alan Johnson has attacked the government's proposed spending cuts in his first Commons appearance since becoming shadow chancellor.

Mr Johnson told MPs borrowing had risen under Labour to stop a "financial meltdown" but coalition plans for major cuts were entirely avoidable.

Chancellor George Osborne said Labour was "in denial" about the deficit.

The government has also confirmed it will publish its strategic defence review next Monday and Tuesday.

The prime minister's spokesman said the first part would set out the national security strategy and the second part would deal with allocation of resources.

The announcements will come before the publication of the overall spending review on Wednesday, 20 October, when the savings that individual departments will have to make over the next four years will be outlined.

The defence budget has been one of the main areas of contention amid fierce lobbying from the Ministry of Defence for the armed forces to be protected from the worst of the expected budget squeeze.

'Vast experience'

The clash between George Osborne and Alan Johnson at Treasury questions was their first since the latter's appointment as shadow chancellor on Friday.

Mr Osborne joked that he had done the job for nearly five years when the Conservatives were in opposition and he hoped his opposite number would hold it for "even longer".

Mr Johnson, whose appointment the Conservatives have described as a "caretaker" role, has made light of his perceived lack of expertise for the job and prefaced his first question by referring to his "vast economic experience".

He asked whether the government was still committed to its four-year plan to eliminate the bulk of the structural deficit in light of recent "unfortunate" comments by Lib Dem cabinet minister Chris Huhne.

The energy secretary said at the weekend that he did not believe the coalition was not "lashed to the mast" when it came to the timing of spending cuts and this could alter depending on changes in economic conditions.

But the government had got its economic arguments the wrong way round, Mr Johnson told MPs.

"The deficit was unavoidable to avoid financial meltdown and his budget proposals were entirely wrong," he said.

"Wrong because they would, according to the Institute of Fiscal Studies, have two and half times the adverse effect on the poorest as the richest in our society. And wrong because he is seeking to cut public spending before there is any momentum to private sector spending in our economy."

Mr Osborne said government was about hard choices and Labour had not come up with a "single suggestion" about how to reduce the deficit or how it would implement the £44bn of cuts it had advocated at the election.

The chancellor also announced a number of measures to strengthen the independence of the Office for Budget Responsibility and said it would publish its latest economic forecasts on 29 November.