Labour will be “ruthless” about cutting public spending if it wins the next election, Ed Balls, the shadow Chancellor, has said.
Despite criticising the Coalition for cutting too far and fast, Mr Balls said he would examine and question every line of expenditure.
Mr Balls’ pledge comes after Nick Clegg, the Lib Dem leader, threw his weight behind “further belt-tightening” beyond the next election. This means all three parties have admitted the need for some degree of austerity beyond 2015.
“The public want to know that we are going to be ruthless and disciplined in how we go about public spending,” Mr Balls said in a newspaper interview.
“For a Labour government in 2015, it is quite right, and the public I think would expect this, to have a proper zero-based spending review where we say we have to justify every penny and make sure we are spending in the right way.”
Britain must accept “further belt-tightening” beyond the next election as public spending is out of control, Nick Clegg said today.
The Lib Dem leader told party members that the country must deal with its debts or potentially face an economic crisis like Greece.
Throwing his weight behind austerity, Mr Clegg warned voters to confront the “inconvenient truth” that high welfare spending and borrowing is unsustainable.
He said the Government is facing a fundamental challenge to “regain control of public spending, but also to completely redirect it so that it promotes, rather than undermines, prosperity”.
If Britain fails to rescue its economy, it will lose power in the world and risk a falling standard of living, he said.
No one dispenses advice to the eurozone better than David Cameron. His speech yesterday was a fountain of good sense and hard truth. Quite rightly, he said there’s no point in any uncompetitive, debt-addicted country thinking it can just muddle along. Radical, structural reform is needed. He didn’t say which of the many basket-case European economies he had in mind, but one sticks out. It is increasing its debt faster than anywhere else in Europe. It languishes behind even Pakistan and Nicaragua on the global regulation league tables. Its growth prospects have almost evaporated.
How do you solve a problem like the United Kingdom? Two years in, and Mr Cameron seems no nearer to a solution. He is ambitious over welfare and schools, but on the economy he seems trapped inside a failed Brownite consensus. The Prime Minister does know what should be done, as we heard yesterday: radical reform, and accepting that you can’t (as he puts it) “borrow your way out of a debt crisis”. But his government is attempting to do precisely that, borrowing more over five years than Labour did over 13.
Good morning everyone, let’s start the week with a gentle quiz. By the end of this parliament, will the United Kingdom’s national debt be a) higher, b) lower, c) about the same, or d) eliminated altogether? Balls, stop peeping at Osborne’s notes. Clegg, put away that calculator.
The answer is, of course, a). In just four years’ time, our state debt will be 40 per cent – yes, forty per cent – higher than it is today. By 2015-16, thanks in part to the power of compound interest, the Government will owe on our behalf more than £1.4 trillion, compared with just over £1 trillion in 2011-12. For context, the extra £400 billion is equal to one year’s income tax, Vat, corporation tax and national insurance, combined.
Over the past 12 months, the outlook for Britain’s liabilities has deteriorated. In his Budget last year, the Chancellor forecast that by the time of the next election national debt would be £1.359 trillion. Now he is predicting £1.437 trillion, some £78 billion more (twice what we spend on defence). Before considering why Britain’s debt is increasing at roughly £2 billion a week, here’s part two of the Monday brain-teaser. In the next four years, will our national income grow a) more quickly than the debt or b) more slowly than the debt? Those who answered a) must stay behind and see nurse.