Balls: Labour has 'learnt from past'

Written By Unknown on Senin, 22 September 2014 | 19.12

22 September 2014 Last updated at 13:02 By Brian Wheeler Political reporter, Labour conference, Manchester

Labour has learnt from its "past mistakes" and will not "flinch" from tough decisions if it regains power, shadow chancellor Ed Balls has said.

Mr Balls told the party's annual conference it had "more work to do" to persuade people it can deliver the economic change people want to see,

But he recognised past errors on bank regulation, immigration and benefits and pledged a tough line on spending.

He said a 1% cap on child benefit rises would be extended to 2017.

In his final conference speech before next year's general election, Mr Balls outlined a list of measures which he said would be in his first Budget if Labour regained power.

He pledged to raise the national minimum wage, expand free childcare, raise the top rate of tax to 50p, introduce a "mansion tax" and reverse coalition housing benefit cuts.

'Tough decisions'

Mr Balls said Labour was serious about "balancing the books" in the next Parliament and would not "make any promises it cannot keep or afford".

"The country is crying out for change," he said. "But we have more work to do to show Labour can deliver the change that people want to see.

"To show that we have learned from our time in government, that we will make the tough decisions we need to get the deficit down and that we can change our economy and make it work for working people."

As part of what he said was a "fully costed" programme, he announced that the value of child benefits would continue to fall in real terms for the first two years of a Labour government.

Under his plans, child benefit payments would not rise in line with inflation but by a fixed rate of 1% per year until 2017. The policy is already in place until 2016, having been announced by the coalition, but Labour's move would see it continue for another year.

Millions of households which receive the benefit would be affected by the move.

At the moment, one parent can claim £20.50 a week for an eldest child and £13.55 a week for each of their other children up to 16 and, in some cases, until they are 20 years old.

Continue reading the main story 'Tough decisions'

Labour has repeatedly criticised the coalition government's benefit cuts, including Mr Osborne's decision to remove child benefit for higher earning households, which Mr Balls said in 2013 created "huge unfairness".

But Mr Balls said Labour was set to inherit an annual budget deficit of £75bn if it regains power and as a result will not be able to reverse most of the cuts and will have to introduce some of its own.

Shadow Chancellor Ed Balls outside Labour party conference venue in Manchester

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Shadow Chancellor Ed Balls: "We want to get the deficit down in a fair way"

He said: "We will have to make other decisions which I know will not be popular with everyone.

"I want to see child benefit rising again in line with inflation in the next parliament, but we will not spend money we cannot afford.

"So for the first two years of the next parliament, we will cap the rise in child benefit at 1%. It will save £400m in the next Parliament. And all the savings will go towards reducing the deficit."

Mr Balls said Labour would balance the books in a "fairer" way than the Conservatives because they would reinstate the 50% top rate of income tax.

Deficit cutting

Labour has said the coalition has missed its borrowing targets and therefore it will have to take tough decisions if it regains power next year.

It has said it wants to eliminate the annual budget deficit - the difference between what the government generates in revenue and what it spends - by 2020.

Borrowing has fallen in the past four years from £136.8bn in 2010-11, the first year of the coalition government, to £107.7bn in 2013-14.

The independent Office for Budget Responsibility has forecast that borrowing will continue to fall from £95.5bn this year to £75.2bn in 2015-16, £44.5bn in 2016-17, £16.5bn in 2017-18, before recording a small surplus in 2018-19.

He also announced plans for a 5% pay cut for government ministers with their pay to be frozen until the deficit has been cleared.

"The next Labour government will get the deficit down," he told Labour delegates.

"And Ed Miliband and all my shadow cabinet colleagues are clear it will mean cuts and tough decisions and we will take the lead."

A Treasury source said the child benefit move would only yield £120m, suggesting Labour was factoring in two years of savings, not one, and its figures were based on historical rather than current rates of inflation.

"Ed Balls' claims that he can cut the deficit have unravelled before he's even made his speech," the aide said. "The first saving he has announced would save less than a third of what he claims."

Analysis by personal finance reporter Kevin Peachey

Much of the focus at the start of 2013 - when big changes were made to child benefit - was on those high-income parents no longer entitled to the money.

But arguably more significant was the fact that lower-earning mums and dads were taking a hit in real terms too.

The benefit was frozen for three years from 2010 and is not rising in line with the cost of living for another two.

Remember, it is not the only benefit witnessing a 1% cap. Others include maternity pay and jobseeker's allowance.

Labour's proposals would tighten the financial squeeze on parents. But only when we see all parties' tax and benefit proposals in full will it be clear who is exerting the greatest pressure on our wallets and purses.

And child poverty campaigners said it would leave the typical family £400 a year worse off by 2017.

"Policy is about making choices and the shadow chancellor has made a choice - to look for savings by cutting help for children," said Children's Society chief executive Matthew Reed.

"We urge the shadow chancellor to reconsider so that children and their already struggling families do not suffer even more unnecessary hardship."

Mr Balls was in a cuts controversy of a different kind on Sunday, when he accidentally elbowed a journalist in the eye during a charity football match.

Does your family receive child benefit? What is your reaction to Labour's proposals? Email your response to haveyoursay@bbc.co.uk


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