Owen Smith MP, Labour’s Shadow Exchequer Secretary to the Treasury, said in response to today’s inflation figures:
“It’s good that inflation has dropped in line with expectations, but it remains double the Government’s target rate and the highest of any EU country except Slovakia and Poland. And the squeeze on hard-pressed families who have been hit hard by the VAT rise is set to continue as they face further cuts to their tax credits this year.
“Of course there need to be tough decisions on spending, tax and pay to get the deficit down, but cutting spending and raising taxes too far and too fast has backfired. By choking off the recovery and putting more people out of work, the Government is set to borrow £158 billion more than planned.
“Labour would be making very different choices now and putting jobs and growth first. We are urging the Government to adopt our five point jobs plan, which includes a temporary VAT cut to ease the squeeze and boost our struggling high streets and a tax on bank bonuses to fund 100,000 jobs for young people.
“But if the Government ignores the IMF and ploughs on with a failing plan, the next Labour government will have to pick up the pieces. That is why we cannot make any promises now, three years before the election, to reverse spending cuts or tax rises. After five years with David Cameron and George Osborne at the helm we don’t know how bad the economy will be. But we are clear that the next Labour Government will have to sort out the deficit where this Government failed and deliver social justice in tougher times.”