George Osborne: Deficit cut could take longer than planned
George Osborne: Deficit cut is taking longer than planned
(about 1 hour later)
Chancellor George Osborne has acknowledged that deficit reduction may take longer than he had planned.
Chancellor George Osborne has acknowledged dealing with the deficit is "taking longer" than planned.
He has called for people to "have the courage to stay the course" amid suggestions that the better-off could be required to contribute more.
But he told the BBC the government was "making progress" and that to "turn back now would be a complete disaster".
It comes as Mr Osborne concludes his work on the Autumn Statement, to be delivered on Wednesday.
Mr Osborne, who delivers his Autumn Statement on Wednesday, said well-off people would "pay their fair share".
Shadow chancellor Ed Balls said it was time to "change the medicine - or change the doctor".
Shadow chancellor Ed Balls said Mr Osborne's judgement had been "woefully lacking" and more investment was needed to promote economic growth.
'In it together'
The coalition has set a target of reducing debt as a share of national income by the next general election, due in 2015.
BBC political correspondent Iain Watson said the Autumn Statement was a Budget by any other name and some tax rises for the wealthy and cuts in welfare were widely expected.
Mr Osborne refused to divulge the details of the economic forecasts from the independent Office for Budget Responsibility, which will be unveiled during Wednesday's statement.
The chancellor warned that the road ahead was longer than thought but that he would not be doing a U-turn as "turning back now would be a disaster".
But he told BBC One's Andrew Marr Show: "It's taking longer to deal with our debt, and we are making progress. To turn back now would be a complete disaster."
He said if he did not continue his drive to bring down the deficit, then Britain would be plunged even deeper into debt and interest rates would rise as a result.
He added that some people were calling for more borrowing and others for more spending cuts, but the government had "got the right plan and we should stick to that plan".
Mr Osborne said: "We are still all in this together. Everyone must make a contribution to dealing with our debts, from the richest in our society to those living a life on benefits.
The chancellor also said: "It's clearly taking longer to deal with Britain's debts. It's clearly taking longer to recover from the financial crisis than people would have hoped."
"Every one of my Budgets has raised more from the richest. The situation under Labour where top people in the City were paying lower tax rates than their cleaners has been ended. And we are hunting down those who evade tax wherever they try to hide.
But the deficit had been cut by a quarter, he added.
"But we understand that fairness isn't just about taxing the rich. It's also about ending the something-for-nothing benefits culture.
Mr Osborne said of an economic recovery that "underpinning it will be the confidence of this country to pay its way in the world".
"So we have introduced a new cap on benefits and are changing the welfare system with our new Universal Credit so that it always pays to work. Unbelievably, the Labour Party opposes these vital changes."
However, Labour's Mr Balls told the same programme that Mr Osborne's "judgement has been proved to be woefully lacking".
He added: "The road ahead may be longer than we thought but it leads to a better future. Let's have the courage to stay the course."
He added: "The growth plan is a shambles. There's nothing there... We are in a hole with no growth and borrowing rising."
'Economy flatlining'
In an article for the Sunday Mirror, Mr Balls said he believed it was reckless for the government not to change course as the economy was not growing, and he repeated his call for a tax on bankers' bonuses.
Mr Balls said he would also like to see a delay in January's fuel duty increase and a temporary tax cut for people on low and middle incomes, such as through reducing VAT.
He said: "Everyone knows how tough things are right now. Prices are rising faster than wages, our economy is flatlining, and long-term unemployment is rising.
"This failure means the government isn't even passing the one test they set themselves - reducing the deficit."
He added: "We need a change of course from David Cameron and George Osborne. When the medicine makes the patient sicker, you don't just take more of it. We need to change the medicine, or change the doctor."
According to the Sunday Times, the chancellor is poised to cut the £50,000 annual tax relief cap on pensions to as little as £30,000 in his Autumn Statement.
According to the Sunday Times, the chancellor is poised to cut the £50,000 annual tax relief cap on pensions to as little as £30,000 in his Autumn Statement.
The change, affecting the wealthiest pension pots, would reportedly bring in up to £1.8bn a year.
The change, affecting the wealthiest pension pots, would reportedly bring in up to £1.8bn a year.
Mr Balls said such a course would be "deeply unfair".
There has been no comment from the Treasury.
There has been no comment from the Treasury.
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BBC political correspondent Iain Watson said the Autumn Statement was a Budget by any other name and some tax rises for the wealthy and cuts in welfare were widely expected.
