The shadow cabinet met for the first time on Tuesday Alan Johnson has attacked the government’s proposed spending cuts in his first Commons appearance since becoming shadow chancellor.
Mr Johnson told MPs borrowing had risen under Labour to stop a “financial meltdown” but coalition plans for major cuts were entirely avoidable.
He said it was wrong to cut public spending until it was clear private sector investment was back on its feet.
Chancellor George Osborne said Labour was “in denial” about the deficit.
The two politicians clashed for the first time at Treasury questions since Mr Johnson’s appointment as shadow chancellor on Friday.
It also came ahead of next Wednesday’s government spending review.
Mr Osborne joked that he had done the shadow chancellor’s job for nearly five years when the Conservatives were in opposition and he hoped his opposite number would hold it for “even longer”.
“He is seeking to cut public spending before there is any momentum to private sector spending in our economy”
Alan Johnson Shadow chancellor
Mr Johnson, whose appointment the Conservatives have described as a “caretaker” role, has made light of his perceived lack of expertise for the job and prefaced his first question by referring to his “vast economic experience”.
He asked whether the government was still committed to its four-year plan to eliminate the bulk of the structural deficit in light of recent “unfortunate” comments by Lib Dem cabinet minister Chris Huhne.
The energy secretary said at the weekend that he did not believe the coalition was not “lashed to the mast” when it came to the timing of spending cuts and this could alter depending on changes in economic conditions.
But the government had got its economic arguments the wrong way round, Mr Johnson told MPs.
“The deficit was unavoidable to avoid financial meltdown and his budget proposals were entirely wrong,” he said.
“Wrong because they would, according to the Institute of Fiscal Studies, have two and half times the adverse effect on the poorest as the richest in our society. And wrong because he is seeking to cut public spending before there is any momentum to private sector spending in our economy.”
Mr Osborne said government was about hard choices and Labour had not come up with a “single suggestion” about how to reduce the deficit or how it would implement the £44bn of cuts it had advocated at the election.
The chancellor also announced a number of measures to strengthen the independence of the Office for Budget Responsibility and said it would publish its latest economic forecasts on 29 November.
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