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'EU judgement wrong' on UK deficit plan

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The Chief Secretary to the Treasury Liam Byrne has said the European Union has "got the judgement wrong" after it warned that the UK's plans for reducing the budget deficit are not ambitious enough.

He was responding to a leaked European Commission report which says the UK is not on course to cut its deficit in line with EU rules by a deadline of 2015. Those rules say deficits must be below 3% of GDP, but the UK's is expected to rise to £178bn - 12.6% of GDP - this year.

Mr Byrne told the Today programme that "we think the plan that [the Commission has] set out would require us to take something like £20bn more out of the economy by 2014-15 and we think that would do irreparable damage to public services or to taxpayers".

But the shadow business secretary Ken Clarke said that action was needed now to begin to cut the deficit. "What has to be done now is to get this debt rapidly under control and get the bulk of the structural deficit, get rid of it during the next parliament and I also think one needs to start now," he told presenter James Naughtie.

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