Labour Question Government Borrowing Forecasts

Labour Question Government Borrowing Forecasts

The Government could end up borrowing £100 billion more than it planned up to 2015, Labour has claimed.

It published comparisons of independent public sector net borrowing estimates from a year ago with a round-up of the latest estimates.

Labour's analysis uses Office for Budget Responsibility forecasts from November 2010 and compares them with latest consensus estimates.

They show the coalition could borrow £11 billion more than it thought this year, £22 billion next year, £34 billion in 2013-14 and £42 billion in 2014-15 in the run up to the next general election. In total, if the forecasts prove accurate, the Government will borrow £109 billion above its plan.

Shadow chief secretary Rachel Reeves said: "These very concerning forecasts expose how this Government's reckless plan to try and cut spending and raise taxes too far and too fast is backfiring badly, as we and the International Monetary Fund warned it would.

"They suggest slow growth and higher unemployment could mean over £100 billion more borrowing over this Parliament than the Chancellor planned."

She said the Government's economic policy "choked off the recovery and pushed up unemployment well before the eurozone crisis". She added: "We are now in a weaker position. It's a tragedy for the one million young people out of work and the thousands of businesses that have gone bust, but it's utterly self-defeating on the deficit too."

Economic Secretary to the Treasury David Gauke said the Government was committed to eliminating the budget deficit by the end of this Parliament.

He told BBC2's Newsnight the economy was "going through a difficult time because of the eurozone crisis", but claimed it was "absolute nonsense" to suggest the coalition Government would borrow more than £100 billion above its planned borrowing by 2015.

He added: "If we had followed the plan Labour had advocated the UK would have been incredibly vulnerable to the type of issues we have seen in Europe, the bond markets would have had no credibility, our credit rating would have been downgraded (and) our market interest rates would have increased."

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