UK Budget more ‘murky’ than people think: Ed Balls

Ed Balls: UK budget 'more murky' than sunny
Ed Balls: UK budget 'more murky' than sunny   

The U.K. government's economic policies are much "more murky" than meets the eye, Ed Balls, shadow finance minister in the opposition Labour Party, told CNBC Thursday.

His comments come a day after the U.K.'s Chancellor, George Osborne, presented his annual budget on Wednesday. With just two months to go before a general election in the U.K., Osborne's Budget aimed to please voters with tax breaks for first-time home buyers, workers and pensioners.

Telling a packed parliament in London that the government was meeting its targets to reduce the U.K's debt levels, Osborne said, "We will end this parliament with Britain's national debt share falling. The sun is starting to shine - and we are fixing the roof."

"I've been involved in budgets in our country in 20 years and once of the things you learn is that you can't judge the budget until the first 24-36 hours (have passed). On the first day, the chancellor gets the headlines and then people look to see what's really going on," Balls told CNBC Europe Thursday.

Read MoreDid the UK just call time on austerity?

Shadow Chancellor Ed Balls
Jason Alden | Bloomberg | Getty Images
Shadow Chancellor Ed Balls

When CNBC questioned Balls over his reaction to the Budget, he was unequivocal. "I'm afraid it's rather more murky than the sunny day you were describing," he said.

Osborne also revealed that growth forecasts by the independent government forecaster, the Office for Budget Responsibility (OBR), had risen to 2.3 percent for 2016, up from earlier forecasts of 2.2 percent. The U.K. is also targeting a smaller budget surplus in 2019/20, giving Osborne more room to soften the government's stance on austerity measures.

Although the general public reaction to the Budget was positive, the opposition Labour party was, predictably, not so enthusiastic about the Budget.

Labour Party leader Ed Miliband attacked the budget as "a budget people won't believe" and said that what Osborne "gives with one hand but takes far more away with the other."

Balls said that the OBR's predictions were based on people being worse off than they were before.

"I think what we're already seeing is that the OBR is highlighting how the cuts in public spending in the next three years will be deeper than the last five and that will be very dangerous for our National Health Service and public services," he said.

"When you look at the issue of living stands, for all the chancellor's boasts, people are actually worse off now than they were in 2010, not better off."

Read MoreUK budget live: Osborne tries to woo voters

Ed Balls: Don't buy into UK Budget spin
Ed Balls: Don't buy into UK Budget spin   

Unfortunately for the Labour party, the U.K. economy has grown under the Conservative government, which governs in a coalition with the Liberal Democrats.

Furthermore, low oil prices and falling consumer prices as a result have given the chancellor, and U.K. economy, another boost over the last year, adding to positive data on the employment and economic growth front.

Balls said the quality of the recovery was spurious, however.

"If you look at the quality of our recovery, on exports, on business investment and productivity, the OBR says business investment revised down, exports revised down and weak productivity lasting through the forecast period."

Balls didn't think the country could cope with more spending cuts and that austerity would continue as before. In the end, he added, "he'll raise VAT (a sales tax) or cut our National Health Service and both of those will be very worrying to people."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld.