Ed Balls MP, Labour’s Shadow Chancellor, said in response to today’s final GDP figures showing the UK economy contracted by 0.5% in the final quarter of 2010:
“These final figures confirm that the recovery stalled and the economy did not grow at the end of last year, even once the effects of the snow have been taken into account.
“Our economy should be growing strongly this year. In next month’s figures for the first quarter of 2011 the economy should not just be making up all the lost ground from the end of last year but growing strongly on top of that.
“Before George Osborne ripped up our plan to halve the deficit steadily over four years the economy was starting to grow strongly, inflation was lower and unemployment was falling, which meant borrowing came in £21 billion last year lower than forecast.
“But now the government is trying to cut further and faster than any other major economy in the world things are heading in the wrong direction. The independent Office for Budget Responsibility has forecast lower growth this year and next year and unemployment up to 200,000 higher.
“The result of this slower growth and lost jobs is that government borrowing will actually be £46 billion higher than planned. This doesn’t make economic sense and underlines Vince Cable’s warning a year ago that cuts without growth will not get the deficit down.
“We should always treat one quarter’s figures with caution, but it’s not cautious for George Osborne to plough on regardless when the evidence is growing that his plan to cut too deep and too fast isn’t just hurting families and frontline services, it’s also not working. He needs to think again before it’s too late.”