David Hanson MP, Labour’s Shadow Treasury Minister, in response to the Office for Budget Responsibility’s paper on household debt which admits that George Osborne’s emergency Budget and spending review will lead to households borrowing more money than previously forecast, said:
“This is a very significant admission that hard-pressed families will have to borrow more and more money to deal with the effect of George Osborne’s tax and benefits squeeze. According to the the Tory-led Government’s own budget watchdog the result of George Osborne’s plans to cut further and faster than any other major country is that household borrowing is now set to rise further and faster.
“There have to be tough choices to get the deficit down, but by going too far and too fast George Osborne risks shifting the debt onto families instead. Cuts which are too deep and too fast are hitting families hard and risk holding back an economy which should be growing strongly this year. But this is a vicious circle because slower growth and more people out of work and not paying taxes will make it harder to get the deficit down.
“The Tories say we’re all in this together, but the banks are getting a tax cut this year while millions of families will find it more and more difficult to get by after this month’s cuts to tax credits, cuts to childcare support and child benefit freeze. And to make things harder still George Osborne’s VAT rise is looking like an own goal as it pushes up inflation which threatens higher interest rates for both mortgages and household borrowing.”