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Osborne created the cost of living crisis

Mismanagement of the economy by George Osborne has led to a cost-of-living crisis for thousands of families in North Warwickshire and Bedworth said Mike O'Brien. This followed a visit to Coleshill by the Chancellor George Osborne in which he announced he plans to cut a further £25 billion from public spending after the 2015 election and of that £12 billion will come from people on benefits.  There was little detail in the Chancellor's speech but his aim he said was to make the state, particularly the welfare state, "permanently smaller".

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Osborne said 2014 was the "year of hard truths", warning voters that only further austerity measures can pay for the tax cuts he wanted.

 He claimed that Labour was "not being straight with people" by suggesting that there was a "magic wand" which would allow a chancellor to spend more.  But Mike O’Brien has said the Chancellor’s was the one who was making false claims.

 Mike O’Brien said,

 “It’s Mr Osborne who has failed to face the truth. When he became Chancellor the economy had been steadily recovering for five months and he said this allowed him to promise to balance the books by 2015 by wielding a big axe on spending. He chopped the police, benefits for those on low incomes and cut wages. He made people poorer and predictably the economy stalled for three years.  As a result the deficit is now expected to be with us for another five years. The current recovery is due to massive dose of spending on ‘quantative easing’ for the banks in 2013 which has boosted housing development.

 “Even worse, his mismanagement has led to a cost-of-living crisis for thousands of families in North Warwickshire and Bedworth.  Hard working families are on average £1,600 worse off since May 2010.  For 41 out of 42 months, prices have risen faster than wages, which means people have got poorer, day by day.

 “And the burden has been spread unfairly. He cut the top rate of tax for millionaires, but paid for it by increasing VAT, imposing the bedroom tax on the poor and squeezing middle income families.

 “But this speech was important because it exposed the real motivation of this Chancellor.  In the past he has said the cuts were about the deficit.  But now Osbourne has admitted it is about something else: the Tory Party ideology of creating ‘a smaller state’. He has accepted that there are less police, less teachers, less nurses, less soldiers and the NHS and other services are being privatised in order to create a state which is “permanently smaller”, rather than being temporary to cure a deficit. 

“This speech exposed an ideologically motivated Chancellor pursuing a narrow party political agenda of creating a smaller state, by cutting the police, the NHS and public services simply because he wants less state employees. He wants to fight the next election on the Tory desire for a British state which is smaller, cares less for the poor and has less state employees - for the sake of it.  He is openly banging the old time Thatcherite drum of a country where millionaires like him get richer, whilst middle income families are squeezed and working people are squashed.

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Like Del Boy he promises that if he creates a smaller state, ‘tomorrow we will all be millionaires’.

“By contrast Labour's plan is to earn our way by hard work to higher living standards for all.  We will tackle the cost-of-living crisis and getting the deficit down in a fairer way.  We will announce our detailed spending plans before the election in 2015, when we know the state of the public finances.  But I can promise that, unlike Mr Osborne, we will not give tax cuts to millionaires, but we will help hard-working families.” 

Paul Johnson, director of the independent Institute of Fiscal Studies said about the speech by George Osborne: ‘Wherever you look, you are taking money either from people who are poor, from people who are sick and disabled or people with children, none of which looks terribly easy to achieve, but these are difficult times.’

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