Alan Johnson, the shadow chancellor and Labour MP, has warned Britain’s cuts could resemble Ireland’s in the wake of the coalition government’s Comprehensive Spending Review (CSR).
Johnson observes Ireland had forced through a similar round of swift cuts in 2009, only to find itself dipping back into economic contraction in the second quarter of this year.
“We were looking for a much more gradual reduction which does not stifle the low levels of growth coming into the economy”
He agrees Britain should cut spending, but more incrementally, in a way which Labour feels will do less damage to the country’s fragile recovery.
“We were looking for a much more gradual reduction which does not stifle the low levels of growth coming into the economy,” he says.
By contrast, he describes the coalition cuts as “ideological”, referring to the Conservatives’ traditional emphasis on reducing state growth. (article continues below)
George Osborne, the chancellor of the exchequer, has lowered his forecast for departmental spending cuts to 19%, lower than the 25% projected and the 20% he says Labour had asked for.
Philip Hammond, the transport secretary, says Labour would have announced 20% departmental spending cuts if it had won the election, based on Labour’s private projections while it was still in power.
But Johnson says the coalition could not claim to have been tougher on public spending than Labour as well as to have cut less.
He says Labour’s spending cuts would initially have been half as harsh as the coalition’s and demands to see the costs incurred by the extra redundancies, which he says will eat into the total.