Budget 2015: Reaction to Chancellor George Osborne’s announcements

Acting Labour party leader Harriet Harman responds after Chancellor of the Exchequer George Osborne

Acting Labour party leader Harriet Harman responds after Chancellor of the Exchequer George Osborne delivered his Budget statement to the House of Commons, London. PRESS ASSOCIATION Photo. Picture date: Wednesday July 8, 2015. See PA story BUDGET Main. Photo credit should read: PA Wire - Credit: PA

George Osborne cannot claim to offer a Budget for working people because he is 'making working people worse off', Harriet Harman has claimed as she condemned cuts to tax credits and student grants.

The interim Labour leader, rising to make an immediate response to the Chancellor's Budget without a preview of its contents, told MPs Mr Osborne had been 'liberated from reality'.

Ms Harman said seven years after the financial crisis, Britain's economic recovery remained fragile, laying the blame at the door of Mr Osborne's Number 11.

Ms Harman said: 'The Chancellor is said to be liberated without the ties of coalition holding him back but what we have heard today suggests his rhetoric is liberated from reality.

'A Budget for working people? How can you make that claim when you are making working people worse off.

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'You are making working people worse off by cutting tax credits and scrapping grants for the poorest students.'

Deputy Speaker Lindsay Hoyle was forced to intervene after just seconds of Ms Harman's speech to calm jubilant Tory backbenchers celebrating Mr Osborne's announcements of a national living wage.

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Unions were quick to attack the Budget, describing it as a 'beautifully crafted con trick'.

Paul Kenny, leader of the GMB, said: 'On the one hand he offers a vision of a living wage which is welcome. He confirms what GMB has being saying for some time - the vast majority of employers can afford pay rises and no amount of howling from the CBI will alter that fact.

'On the other hand he is taking away money from working families without any guarantee that they will be better off.

'George Osborne is big in attacking working families and young workers but he has yet to take action on the billions of public money flowing out of the country into tax havens because of the abuse of housing benefits income by private landlords.'

John Allen, chairman of the Federation of Small Businesses, said: 'There was further support to reduce corporation tax, fix the annual investment allowance and boost regional growth, where investment in roads will be particularly well received.

'We agree with the focus on productivity but need to see the details to raise skills through the apprenticeship levy on large firms. Planning reforms are also critical to raising productivity and again we look forward to seeing the proposals on Friday.

'However, even though offset by a welcome increase in the employment allowance, some will find the new national living wage challenging. Changes to the treatment of dividends will also affect many of our members.'

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