Budget aftermath: Coalition scrambles to defend cuts

By Alex Stevenson and Ian Dunt

The government scrambled to justify one of the toughest Budgets in living memory today, as opponents of George Osborne’s programme prepared to fight cuts to spending and welfare.

David Cameron responded to angry criticism of the Budget at PMQs, with Labour leader Harriet Harman accused him of “not being straight” with people.

“The whole country can see what is happening here. One party put us into this mess. Two parties are working together to get us out of it,” the prime minister responded.

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Ms Harman used her questions to accuse the government of making pensioners worse of as a result of the Budget. She also suggested families with children would suffer as a result of cutbacks to benefits, including the child tax credit.

“What we are doing is making sure the less well-off families get the most money. What a contrast again,” Mr Cameron continued.

“Since 2004 child poverty went up 100,000 under a Labour government. In this Budget child poverty does not go up by one single family.”

PMQs as-it-happens“>

Ms Harman pointed out that because over-65s do not qualify for the income tax personal allowance, they will suffer overall as a result of the increase in VAT from 17.5% to 20%.

The prime minister mocked her refusal to accept his initial answer that the Budget’s arrangements were too complicated to provide a specific answer on the amount of money allocated to fund the re-linking of state pensions with earnings.

“Perhaps I can recommend the Budget red book – or in her case, I suspect, it might be the un-read book,” he suggested, to laughter from the government benches.

Ms Harman responded by outlining the specific page of the Budget red book which stated: “Money set aside – zero!”

But Mr Cameron finished: “The Labour party have absolutely nothing to say about the biggest problem which is sorting out the deficit.”

The exchange came as the Institute for Fiscal Studies cast doubt on several aspects of the chancellor’s Budget, saying the VAT rise might not have been necessary if the government had not cut taxes for corporations.

The thinktank also warned that Britain faced the most severe public sector retrenchment since the Second World War.

The prime minister and his deputy, Nick Clegg, will undertake a joint BBC interview to be broadcast this evening as they continue their bid to justify the swift cuts being made to public spending.

Earlier today chancellor George Osborne addressed the issue of tensions with the Lib Dems directly in an interview with Sky News, as he insisted the two parties were united in their efforts to tackle the deficit.

“Liberal Democrat colleagues in this government have been incredibly supportive,” he said.

“Both the Conservatives and the Liberal Democrats are working together to tackle this debt problem.

“Harriet Harman, people will remember, was in government for thirteen years, as was Alistair Darling and Gordon Brown. They’re the people who created this almighty economic mess.

“Instead of shouting from the sidelines, it would be better if they offered some constructive suggestions on how to deal with it.”

Parliament will spend the next few days debating the Budget. It is likely to be bad-tempered if yesterday’s statement was anything to go by.

Labour MPs sat incandescent with rage as the chancellor reeled off long lists of welfare cuts – in effect dismantling a substantial portion of the benefit system Labour had created.

At several points, the deputy Speaker was forced to intervene so Mr Osborne could be heard.

His comment that it was a “progressive Budget” provoked further anger on the opposition benches.