Balls: “Osborne’s got two weeks to come up with a plan B”

Ed Balls has warned that George Osborne may be "making the same mistakes" as Thatcher "all over again", and that he's got just two weeks "to come up with a plan B for the Budget".

Ed Balls has warned that George Osborne may be “making the same mistakes” as Thatcher “all over again”, and that he’s got just two weeks “to come up with a plan B for the Budget… don’t hold your breath”. In his latest Tribune column, the shadow chancellor also calls on Osborne “to take immediate action on the cost of fuel” – particularly VAT on fuel.

Balls writes:

“The two global recessions in the 1970s were both linked to the supply and cost of oil from that region which the whole world is dependent on. The 1973-75 recession followed the collapse of the OPEC deal which saw a big rise in oil prices. And in 1979 it was the revolution in Iran and the deposing of the Shah which forced up world oil prices, with petrol hitting £1 a gallon.

“Both times global downturns hit Britain hard. But in 1979 things here were made much worse by the austerity budgets of the incoming Thatcher government – near-doubling VAT, cutting spending and forcing up mortgage rates. Sound familiar? I fear George Osborne may be making the same mistakes all over again.

“He has chosen this very moment of rising oil prices and world commodity prices to hike up VAT. It’s the wrong tax at the wrong time – taking £13 billion out of the economy just when growth has stalled and unemployment is rising.

“The result is that families on low and middle incomes face a real cost of living crisis over the coming years – as Ed Miliband set out earlier this week. Families are being badly squeezed by this Conservative-led government’s hit on living standards through cuts to public services, cuts to tax credits and higher taxes like the VAT rise, with the threat of higher mortgage rates on the horizon.”

Balls also sets out four reasons why the government should think again on the VAT rise on fuel, concluding:

“The Chancellor needs to come up with a plan to get our stalled economy moving again and get more people into work paying taxes and making a contribution. That’s the best way to get the deficit down. At the moment it seems George Osborne is still in denial about the state of the economy and the tough times families are facing this year…

“He’s got two weeks to come up with a plan B for the Budget – a plan that puts jobs and growth first, gets our economy growing strongly again and eases the pressure on millions of families feeling the squeeze. Don’t hold your breath.”

Earlier today, Balls launched a pre-Budget campaign to reverse the VAT rise on fuel, which has added nearly 3p to the cost of a litre of unleaded petrol – £1.35 to the cost of a filling up a 50-litre tank – and helped to push petrol prices to record levels.

He said:

“Families are already facing their incomes squeezed this year and events in the Middle East and North Africa are helping to push up oil prices around the world. But in Britain George Osborne is making things much worse, not better, for families and pensioners with his hike in VAT.

“Conservative cabinet ministers have dismissed the impact of their VAT rise, but it has added £1.35 to the cost of filling up a 50 litre tank. George Osborne should admit he got it wrong, immediately reverse the VAT rise and ease the pressure on families right now.”

Research by the House of Commons Library revealed that the rise in VAT is adding 2.71p to the cost of a litre of unleaded petrol, assuming a pump price of 130p; based on these figures, the VAT rise has added £1.35 to the cost of filling up a 50-litre tank, with the extra cost for annual mileage of 10,000, 20,000 and 50,000 miles around £30, £60 and £150.

19 Responses to “Balls: “Osborne’s got two weeks to come up with a plan B””

  1. Jon H

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  2. Watching You

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  3. badgerbrocks

    Balls: "Osborne's got two weeks to come up with a plan B" | Left Foot Forward: http://bit.ly/gFTXuy via @addthis

  4. CAROLE JONES

    RT @leftfootfwd: Balls: "Osborne's got two weeks to come up with a plan B" http://bit.ly/eYK7ik

  5. Will Straw

    RT @leftfootfwd: .@EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  6. Deborah Jones

    RT @wdjstraw: RT @leftfootfwd: .@EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  7. Peter Watt

    RT @wdjstraw: RT @leftfootfwd: .@EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  8. Sue Marsh

    RT @leftfootfwd: Balls: "Osborne's got two weeks to come up with a plan B" http://bit.ly/eYK7ik

  9. Sue Marsh

    I bloody love Ed Balls

  10. Brian Barefield

    RT @suey2y: RT @leftfootfwd: Balls: "Osborne's got two weeks to come up with a plan B" http://bit.ly/eYK7ik

  11. Richard Hincks

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  12. Jonathan Fellows

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  13. Paul Kenny

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  14. Daniel Pitt

    Osborne has two weeks to come up with a Plan B http://bit.ly/gqx1s6 #ConDemNation

  15. DrKMJ

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  16. Mr. Sensible

    Osborne and the government are still yet to come up with a Plan A for economic growth…

    the VAT increase should be scrapped; it’s not about cutting the deficit, it’s about tax cuts such as Corporation Tax and the Income Tax threshold gimmic.

  17. Tacitus

    It’s good to see Ed Balls now getting the bit between his teeth. Until now he has been a bit silent, so i am particularly pleased to see him addressing VAT and supporting those who experience fuel poverty on a daily basis.

    The Shadow Cabinet must stand united behind this campaign and Ed needs to be far more passionate and vocal in his delivery if he is to earn the title of party leader.

  18. Hitchin England

    RT @leftfootfwd: . @EdBallsMP: "Osborne's got two weeks to come up with a plan B": http://bit.ly/gqx1s6 reports @ShamikDas

  19. Ed

    Erm, didn’t Thatcher only come to power in 1979? Considering she then won three terms I’m sure Osbourne would be delighted if he is making the same ‘mistakes’.

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