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Budget 2013: Ed Balls urges George Osborne to 'U-turn' on economy Budget 2013: Ed Balls urges George Osborne to 'U-turn' on economy
(about 1 hour later)
Shadow chancellor Ed Balls has urged George Osborne to make a swift economic "U-turn", after growth forecasts for 2013 were halved to 0.6% in the Budget.Shadow chancellor Ed Balls has urged George Osborne to make a swift economic "U-turn", after growth forecasts for 2013 were halved to 0.6% in the Budget.
Mr Balls said government policies had "sucked confidence" out of the economy. Mr Balls said government policies had "sucked confidence" out of the economy and the plan was not working.
But senior Conservative backbencher David Davis called on the chancellor to "go further", with more cuts to corporation tax and capital gains tax. During the two men's tour of media outlets after the Budget, Mr Osborne defended his economic package.
Mr Osborne insists his strategy is working and says his Budget was aimed at "those who want to work and get on". He insisted his strategy was working, saying "we have to go on confronting these problems" and cutting debt.
In a package of measures announced on Wednesday, the chancellor froze petrol duty rises and said corporation tax would be cut to 20% in 2015. Those measures included freezing petrol duty rises and a cut in corporation tax to 20% in 2015.
'Borrowing for failure''Borrowing for failure'
He also cancelled alcohol duty rises, cut beer by 1p a pint and unveiled measures to boost the housing market. He also cancelled future automatic beer duty rises, cut current duty on a pint by 1p and unveiled measures to boost the housing market.
But he cut his growth forecasts for this year to 0.6% - having predicted 1.2% growth four months ago in his autumn statement.But he cut his growth forecasts for this year to 0.6% - having predicted 1.2% growth four months ago in his autumn statement.
And figures from the Office for Budget Responsibility suggest the government's efforts to cut the deficit - the difference between money spent and earned in a year - have stalled and it will remain stuck at about £120bn for three years.And figures from the Office for Budget Responsibility suggest the government's efforts to cut the deficit - the difference between money spent and earned in a year - have stalled and it will remain stuck at about £120bn for three years.
Ahead of a Budget debate in the Commons later, Mr Balls told the BBC that while there were some "good things" in the Budget, it had shown "in even more vivid detail than before... that the plan's not working. The economy is not growing".Ahead of a Budget debate in the Commons later, Mr Balls told the BBC that while there were some "good things" in the Budget, it had shown "in even more vivid detail than before... that the plan's not working. The economy is not growing".
He added: "If you're a chancellor, if you made a mistake, do your U-turn quickly.He added: "If you're a chancellor, if you made a mistake, do your U-turn quickly.
"The longer you wait, the worse it gets, and the harder it becomes politically, even if economically it's the right thing.""The longer you wait, the worse it gets, and the harder it becomes politically, even if economically it's the right thing."
He accused the chancellor of having a "self-denying ordinance" which restricted him from do anything other than "tinkering at the edges".He accused the chancellor of having a "self-denying ordinance" which restricted him from do anything other than "tinkering at the edges".
"They are borrowing for failure when they could have borrowed to get the economy moving and actually get the deficit down," he added."They are borrowing for failure when they could have borrowed to get the economy moving and actually get the deficit down," he added.
Mr Davis said the government needed to do more to help Britain be competitive in the global economy. But Mr Osborne told BBC Breakfast: "I'm not going to pretend there's an easy answer to our problems. We've just got to go on confronting them, dealing with those debts."
He urged the chancellor to extend the new employment allowance, which will cut National Insurance bills cut by £2,000 for every firm, and cut capital gains tax to 18%. That echoed the message he gave in his Budget statement, that it was taking longer than expected but "we are, slowly but surely, fixing our country's economic problems".
In his Budget statement, Mr Osborne admitted it was taking longer than expected but insisted "we are, slowly but surely, fixing our country's economic problems".
He told MPs: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation."He told MPs: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation."
In other Budget news:In other Budget news:
Business Secretary Vince Cable admitted the economy was "flat lining" and refused to predict when the "age of austerity" might end - although he thought it "unlikely" to last until 2020.Business Secretary Vince Cable admitted the economy was "flat lining" and refused to predict when the "age of austerity" might end - although he thought it "unlikely" to last until 2020.
It all meant Mr Osborne had little room for manoeuvre when it came to tax giveaways, but he found some extra cash by squeezing public spending further and other measures.It all meant Mr Osborne had little room for manoeuvre when it came to tax giveaways, but he found some extra cash by squeezing public spending further and other measures.
This allowed him to bring forward the introduction of a £10,000 income tax threshold by a year, to 2014, in a move that pleased the Lib Dems, who had campaigned on the issue at the last election.This allowed him to bring forward the introduction of a £10,000 income tax threshold by a year, to 2014, in a move that pleased the Lib Dems, who had campaigned on the issue at the last election.
'Miserable Budget''Miserable Budget'
The chancellor ignored pre-Budget calls by Mr Cable and others to borrow more to boost growth with a big building programme.The chancellor ignored pre-Budget calls by Mr Cable and others to borrow more to boost growth with a big building programme.
But he did announce £2.5bn of spending on infrastructure paid for by a fresh public spending squeeze. Details of where the axe will fall will be announced in June when the government unveils its spending review.But he did announce £2.5bn of spending on infrastructure paid for by a fresh public spending squeeze. Details of where the axe will fall will be announced in June when the government unveils its spending review.
Mr Osborne also announced that the Bank of England Monetary Policy Committee had been given an updated broader remit, but keeps its 2% inflation target.Mr Osborne also announced that the Bank of England Monetary Policy Committee had been given an updated broader remit, but keeps its 2% inflation target.
Meanwhile, after the Evening Standard tweeted details of the Budget before Mr Osborne had delivered it, the chancellor has asked his top official to conduct a review of the practice of releasing Budget information in advance of the speech.Meanwhile, after the Evening Standard tweeted details of the Budget before Mr Osborne had delivered it, the chancellor has asked his top official to conduct a review of the practice of releasing Budget information in advance of the speech.
The Scottish National Party described Mr Osborne's statement as a "miserable Budget" which "just continues along the austerity path that is clearly failing".The Scottish National Party described Mr Osborne's statement as a "miserable Budget" which "just continues along the austerity path that is clearly failing".
Plaid Cymru said the £2.5bn in infrastructure spending was just a "fraction" of what was actually needed.Plaid Cymru said the £2.5bn in infrastructure spending was just a "fraction" of what was actually needed.
Green Party MP Caroline Lucas said it was "yet another Budget that treats the public with contempt, continuing to peddle the myth that our national debt and deficit increased due to excessive public spending rather than bank bailouts".Green Party MP Caroline Lucas said it was "yet another Budget that treats the public with contempt, continuing to peddle the myth that our national debt and deficit increased due to excessive public spending rather than bank bailouts".
UKIP leader Nigel Farage dismissed Mr Osborne's statement as a "Budget for headline writers" that failed to tackle "the serious problems in our economy".UKIP leader Nigel Farage dismissed Mr Osborne's statement as a "Budget for headline writers" that failed to tackle "the serious problems in our economy".