Osborne cuts 'will wreck economy'

How the Morning Star covered the publication of LEAP's dossier on Osborne.

by Roger Bagley in Parliament

Left-wing economists stripped the facade today from Chancellor George Osborne's disastrous attack on public services and the poor.

Mr Osborne's big lie that Con-Dem spending cuts are "fair" was also punctured when a bunch of 35 super-rich big business bosses signed a letter to the Daily Telegraph expressing their fulsome support for the Chancellor's policies.

On the eve of tomorrow's Comprehensive Spending Review containing further huge cuts, the Left Economics Advisory Panel (Leap) issued a dossier highlighting Mr Osborne's flawed assertions, mistakes and U-turns since his June Budget.

Leap chairman John McDonnell MP accused Mr Osborne of being "wrong time and time again."

Mr McDonnell said: "Our community is now about to be devastated by four years of cuts in valuable public services with hundreds of thousands losing their jobs as a result of his faulty economic calculations and recklessly risky policies."

The bosses of Marks and Spencer, Asda, Alliance Boots, BT, Diageo, Microsoft and GlaxoSmithKline were among 35 big business chiefs signing the Telegraph letter, which claimed it would be a "mistake" for the Chancellor to water down his cuts.

"Addressing the debt problem in a decisive way will improve business and consumer confidence," they argued.

But Leap co-ordinator Andrew Fisher accused Mr Osborne (pictured, left) of pursuing "a pessimistic strategy based on failed monetarist policies."

He added: "Fundamentally, the Osborne economic strategy is simply a Thatcherite ideology that wishes to roll back the state. Today, the small government idea is the Big Society, which is not about strengthening society, but burdening it."

The Leap dossier pointed out that cutting the public sector would not "make room" for the private sector, but would sap demand and weaken the private sector as well.

A leaked document from the Office for Budget Responsibility had recognised this by estimating that cutting 600,000 public-sector jobs would lead to a knock-on loss of 700,000 jobs in the private sector.

Leap also pointed out that, since the June Budget, leading economic forecasters had downgraded prospects for growth in the British economy.

In addition to Mr Osborne's U-turn over withdrawing child benefit from households with a higher rate taxpayer, the overall three-year freeze on child benefit would mean a 10 per cent cut in real terms.