Thatcher's cuts too low..[ 1860 ]

Cuts 'will be worse than Thatcher'

Standard co.uk.,10.10.10

 Alan Johnson said the Government's spending cuts would cause more damage than that inflicted by Margaret Thatcher

Shadow chancellor Alan Johnson has warned that the Government's spending cuts would cause more damage than that inflicted by Margaret Thatcher in the 1980s.

In his strongest attack so far on the coalition's deficit-reduction plans, Mr Johnson said they would "fundamentally alter our community" and require years of repair.

He also raised the spectre of a double-dip recession, claiming that the Conservative-Liberal Democrat administration was putting economic growth at risk with cuts of 25% over four years.

Pointing to the continued economic turmoil in Ireland, he told The Observer: "We don't have to look far to see what the effect can be of cutting too deep too soon.

"Even if double dip doesn't happen, the way this coalition is implementing these changes will fundamentally alter our community and lead to a situation where we spend years trying to repair the damage. If you think of Thatcher in the Eighties, the most she cut was 10%, and we are still feeling the effect of that in Hull, the city I represent."

Mr Johnson is still fleshing out his approach to the economy after emerging as Labour leader Ed Miliband's surprise choice for shadow chancellor.

He has endorsed former Labour chancellor Alistair Darling's plan to halve the deficit over four years, saying that is his starting point, and has also indicated he would not oppose every cut proposed by the coalition, whose comprehensive spending review on October 20 presents Mr Johnson with his first major test.

Chancellor George Osborne is to detail about £83 billion of cuts from Whitehall budgets, but Mr Johnson, who was home secretary until Labour lost the general election in May, said there was "no way" his old department could afford to lose a quarter of its budget.

But he insisted he was a "realist" about the need to reduce the deficit, but added the proviso that economic growth had to be the priority.

"If you are cranking up lots of interest on debt you need to bring the deficit down as fast as you can, consistent with jobs and growth and I think that is where the Conservatives have fallen down," he said.