George Osborne's Autumn statement announced a series of key measures aimed at getting the economy back on track on Tuesday.
He admitted growth will be slashed by the Office of Budget Responsibility (OBR) and the cost of borrowing will soar.
The OBR's forecast also predicts that there will be 710,000 public sector job cuts by 2017, a vast increase on 500,000 predicted in the coalition's 2010 spending review.
Giving his Autumn Statement to the house, Osborne announced:
- Growth forecasts have been slashed to 0.9% in 2011, and 0.7% in 2012
- A 3p rise in fuel duty due in January has been cancelled
- £40bn will be made available in loan guarantees for small businesses
- Up to £10bn will be invested in infrastructure, with £20m more coming from pension funds
- £400m is to be made available for housing projects
- The child element of working tax credit is to be increased
- A 2% rise in train fares has been cancelled
- Public sector pay rises have been reduced from 2% to 1%
- The bank levy has been increased
Ed Balls, however, said the £100bn extra borrowing meant his ‘economic and fiscal strategy was in tatters’.
The Shadow Chancellor concluded that, "after eighteen months in office, the verdict is in: Plan A has failed and it has failed colossally."
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