Ed Balls MP, Labour's Shadow Chancellor, responding to the letter from the chairman of the Office for Budget Responsibility to the Prime Minister, said:
“This is another embarrassing rebuke for the Prime Minister, just 24 hours after his panicky and defensive speech on the economy. Deep spending cuts and tax rises have reduced economic growth, as the OBR says, and so it was deeply misleading for David Cameron to claim otherwise.
“Of course there is a debate about the extent of the impact – the size of the so called fiscal multipliers. The Office for Budget Responsibility rightly draws attention to recent research from the IMF suggesting that the multipliers have been much greater than previously thought. The OBR says they are yet to be persuaded, but David Cameron must be living on another planet if he thinks spending cuts and tax rises have had no impact at all.
“This isn’t the first time David Cameron has been slapped down for making misleading claims. Only a few weeks ago the head of the independent UK Statistics Authority reprimanded him for claiming the government is getting the debt down, when it is in fact rising.
“David Cameron’s attempts to defend his failing economic policy are getting more and more desperate but as Prime Minister he has an obligation to be straight with people and not play fast and loose with the facts.”