Ed Balls MP, Labour’s Shadow Chancellor, said in response to the ONS confirming its figures for growth in the first quarter of 2011:
“These final figures confirm that in the six months since George Osborne’s spending review and VAT rise the economy has flatlined and the recovery has been choked off.
“We will need to see growth of 0.8% in the second quarter of this year simply to get back on track to the OBR’s recent three times downgraded forecast of 1.7% growth this year - let alone to see growth of 2.6% this year, which was forecast before George Osborne’s first Budget.
“By cutting too far and too fast the Tory-led government risks getting us into a vicious circle. The government is now forecast to borrow £46 billion more than they were expecting last autumn – the cost of the slower growth, higher unemployment and higher inflation David Cameron and George Osborne’s policies have delivered.
“There is an alternative. Labour’s balanced deficit plan would put jobs first because getting people off the dole and into work is the best way to get the deficit down. To give the economy the jump start it desperately needs and help millions of families and pensioners, the government should temporarily reverse its mistaken VAT rise until the economy returns to strong growth. And George Osborne should repeat the bank bonus tax to build thousands of new homes, get young people into work and support small businesses.”