Shadow Chancellor lambasts the Coalition's 'deficit deceivers'

Alan Johnson denounced the huge cuts in public spending unveiled yesterday as an ideologically driven assault on the state that was taking a "reckless gamble with people's livelihoods". In his first major Commons test since being made shadow Chancellor, Mr Johnson said the £81bn programme of cuts was too severe and risked stifling Britain's weak economic recovery just as it was beginning.

While he admitted that spending cuts had to be made to reduce the budget deficit, he accused the Chancellor, George Osborne, of introducing "the deepest cuts to public spending in living memory". He said many Conservative backbenchers relished the prospect of shrinking the welfare state.

Mr Johnson, who was a surprise choice to replace Alistair Darling, has already said he would stick to his predecessor's plan to reduce the deficit at a slower rate to that instituted by the Coalition Government yesterday. He did not use the opportunity to unveil an alternative cuts programme, but said the size and speed of Mr Osborne's spending review was unnecessary.

"We have seen people cheering the deepest cuts to public spending in living memory," he said. "For some members opposite, this is their ideological objective. Not all of them, but for many of them, this is what they came in politics for."

He labelled some members of the Coalition Government "deficit deceivers" – a riposte to the Tory claim that Labour ministers were "deficit deniers" because of their plan only to halve the deficit over four years. Mr Johnson said the Government had "peddled a whole series of myths to the British public" about the state of the economy.

"The most incredible myth of all is that the [largest] global economic crisis since the Great Depression is the fault of the previous government," he said, adding that Britain's debt was the second lowest among the G7 group of wealthy nations when the financial problems hit.

"If countries around the world hadn't run up debts to sustain their economies, people would have not lost their credit cards – they'd have lost their jobs; they'd have lost their houses; they would have lost their savings," he said.

Mr Osborne had attempted to wrong-foot Labour by saying his 19 per cent overall departmental cuts were less than the 20 per cent advocated by Labour earlier this year. Mr Johnson dismissed the claim as "nonsense", adding that Labour would have insisted on budget cuts of around half the level of those announced yesterday.

He warned that the 500,000 job losses in the public sector by 2014 would have a similar impact on the private sector, adding that there was an alternative. He also criticised the £7bn raid on welfare payments.

"At the same time as you are throwing people out of work, the Government is reducing the support to help people return to the workplace," Mr Johnson said. "With the proposals today you have actually made it harder for people to return to work."

Mr Johnson also attacked Nick Clegg, the Deputy Prime Minister, and the Liberal Democrats for the way in which they had embraced huge spending cuts, saying that they had gone into the election campaign arguing that fast and deep reductions in public spending were not needed.

"In the period between the ballot box closing and his ministerial car door opening, the Deputy Prime Minister discovered a different approach," Mr Johnson said.

"It's our firm belief that the rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term and for prosperity in the longer term. We believe we can and should sustain a more gradual reduction, securing growth."

In a sign that Labour will attempt to win back the support of middle-income voters who deserted the party in swathes at the last election, Mr Johnson said the budget cuts would see the "middle squeezed even further".

As the impact of the changes to welfare became clearer last night, Labour used the huge benefits cuts to underline their effect on women and the poorest.

"Once again, the Government is hitting women much harder than men, and families with children hardest of all," said Yvette Cooper, the shadow Equalities minister. "Women are harder hit by the cuts in pension credit, working tax credit, childcare support and the cuts in public-sector jobs.

"Cutting jobs for women and help for women to work is crazy – it is bad for the economy, increases child poverty and will end up costing us more. It also makes it much harder for parents to balance work and family life and shows the Government really doesn't get the pressures working families face."