Osborne Budget Seen Pressuring Labour Heading for 2015

U.K. Chancellor of the Exchequer George Osborne set out spending cuts for the 2015 election year, seeking to appeal to disaffected Conservatives while pushing the Labour opposition to come up with an acceptable alternative.

Announcing 11.5 billion pounds ($17.5 billion) of budget reductions today, Osborne protected spending on defense, schools and hospitals and increased outlays on science and transport infrastructure at the expense of local governments and welfare.

The chancellor taunted Labour lawmakers in Parliament in London, asking them what their alternative was. Labour’s Treasury spokesman, Ed Balls, said Osborne was being forced to make the cuts to “pay for his economic failure.” Recent data suggest an economic recovery is getting under way after a return to growth in the first quarter. Bank of England Governor Mervyn King said this week that growth is still “too weak to be satisfactory.”

“The whole statement was quite political, designed to set up elephant traps for the Labour Partyto stumble into,” Wyn Grant, professor of politics at Warwick University, said in a telephone interview. “Osborne is trying to portray the Labour Party as sticking up for benefit claimants.”

From 2015, the government will set a cap on total welfare spending, excluding state pensions, Osborne announced. The Office for Budget Responsibility spending watchdog will have a duty to warn him publicly if ministers are on course to breach the limit. He didn’t offer a likely level for the cap.

“We have set out our plans, we have set out our economic strategy,” Osborne told Balls. “Those who disagree with them – – advance an alternative or retreat from the battlefield.”


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