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Ed Balls hits out at Tories but accepts some cuts in Labour's balancing act Ed Balls hits out at Tories but accepts some cuts in Labour's balancing act
(3 months later)
Ed Balls accepted some of the key welfare changes announced by George Osborne shortly after lambasting the chancellor for imposing deeper spending cuts in light of his "abject failure" to create the conditions for economic growth.Ed Balls accepted some of the key welfare changes announced by George Osborne shortly after lambasting the chancellor for imposing deeper spending cuts in light of his "abject failure" to create the conditions for economic growth.
Looking to neutralise pre-election Tory attacks, the shadow chancellor signalled support for an enforced seven-day wait before those who had lost their jobs could claim unemployment benefits, and agreed that the basic state pension should be excluded from a proposed welfare cap.Looking to neutralise pre-election Tory attacks, the shadow chancellor signalled support for an enforced seven-day wait before those who had lost their jobs could claim unemployment benefits, and agreed that the basic state pension should be excluded from a proposed welfare cap.
The announcement by Balls formed part of a delicate balancing act by Labour as he responded to the last spending review before the general election in 2015. Balls said Osborne had been forced to extend austerity, with an extra £11.5bn cuts in current spending in 2015-16, after admitting in the March budget that he is delaying his plan to reduce debt as a proportion of GDP by two years to 2017-18.The announcement by Balls formed part of a delicate balancing act by Labour as he responded to the last spending review before the general election in 2015. Balls said Osborne had been forced to extend austerity, with an extra £11.5bn cuts in current spending in 2015-16, after admitting in the March budget that he is delaying his plan to reduce debt as a proportion of GDP by two years to 2017-18.
Balls told MPs: "The scale of the cuts … to our police, defence and local services are the direct result of his abject failure to get the economy to grow. This chancellor is failing on living standards – they're falling. He's failing on growth – it's flatlining. He's failing on the deficit."Balls told MPs: "The scale of the cuts … to our police, defence and local services are the direct result of his abject failure to get the economy to grow. This chancellor is failing on living standards – they're falling. He's failing on growth – it's flatlining. He's failing on the deficit."
Balls later dismissed Tory claims that he is addicted to irresponsible spending. He reinforced his recent announcement that Labour would use the coalition's spending plans for 2015-16 as the basis of his own programme by accepting some of the chancellor's initiativesBalls later dismissed Tory claims that he is addicted to irresponsible spending. He reinforced his recent announcement that Labour would use the coalition's spending plans for 2015-16 as the basis of his own programme by accepting some of the chancellor's initiatives
Balls indicated that Labour may be prepared to accept a proposal to withhold jobseeker's allowance for seven days while recipients look for a job. Speaking after the chancellor's statement, he said: "If this is a sensible reform, which saves money, we will support it. But if it is a blank cheque for Wonga we will be more suspicious. We just need to see who are actually going to be the winners and losers out of this."Balls indicated that Labour may be prepared to accept a proposal to withhold jobseeker's allowance for seven days while recipients look for a job. Speaking after the chancellor's statement, he said: "If this is a sensible reform, which saves money, we will support it. But if it is a blank cheque for Wonga we will be more suspicious. We just need to see who are actually going to be the winners and losers out of this."
The shadow chancellor also moved to clear up confusion as he announced that Labour will accept Osborne's proposal to exempt the basic state pension from a proposed welfare cap. He said: "Given that we have said we are going to support the triple lock [which guarantees that the basic state pension will rise in line with earnings or inflation] anyway we are quite happy that the short term [welfare] cap excludes the basic pension, because if we are supporting the triple lock that will make absolutely no difference anyway. We are not going to be clawing back on the triple lock on any short term basis."The shadow chancellor also moved to clear up confusion as he announced that Labour will accept Osborne's proposal to exempt the basic state pension from a proposed welfare cap. He said: "Given that we have said we are going to support the triple lock [which guarantees that the basic state pension will rise in line with earnings or inflation] anyway we are quite happy that the short term [welfare] cap excludes the basic pension, because if we are supporting the triple lock that will make absolutely no difference anyway. We are not going to be clawing back on the triple lock on any short term basis."
Balls dismayed Ed Miliband earlier this month when he told the Sunday Politics on BBC1 that the basic state pension would be included in a Labour welfare cap which was unveiled in a bid to pre-empt Osborne. The shadow chancellor said later that he supported the triple lock after declining to give the commitment during his appearance on the BBC.Balls dismayed Ed Miliband earlier this month when he told the Sunday Politics on BBC1 that the basic state pension would be included in a Labour welfare cap which was unveiled in a bid to pre-empt Osborne. The shadow chancellor said later that he supported the triple lock after declining to give the commitment during his appearance on the BBC.
But Balls, who noted that Osborne's welfare cap will only apply for three years, said that any serious attempt to rein in welfare spending over the long-term would have to include pensioner spending. He said: "Whether you call that a cap or not, any long-term control regime for long-term welfare spending in 20, 30 or 40 years of course needs to have pensioner spending in it as it relates to people who are at the moment in their 20s, 30s and 40s and how long they will have to work. The chancellor acknowledged that."But Balls, who noted that Osborne's welfare cap will only apply for three years, said that any serious attempt to rein in welfare spending over the long-term would have to include pensioner spending. He said: "Whether you call that a cap or not, any long-term control regime for long-term welfare spending in 20, 30 or 40 years of course needs to have pensioner spending in it as it relates to people who are at the moment in their 20s, 30s and 40s and how long they will have to work. The chancellor acknowledged that."
Balls also announced that Labour would support the chancellor's plan to limit the winter fuel allowance by introducing a "temperature test" to ensure it cannot be paid to pensioners in Spain. Labour has already announced it will remove the benefit from rich pensioners.Balls also announced that Labour would support the chancellor's plan to limit the winter fuel allowance by introducing a "temperature test" to ensure it cannot be paid to pensioners in Spain. Labour has already announced it will remove the benefit from rich pensioners.
Balls said: "If [the chancellor] can make that work we will support it. I am not in favour of pensioners in Malaga getting the winter allowance. I presume the reason he has done this is because he needs to have some kind of legally watertight way of taking it away from people who feel they are entitled to it. Presumably if it is hotter in Malaga than in Britain there are other potential temperature variations which could cause legal complexities. Let's wait and see whether he can make that work. But if he can we'll support that."Balls said: "If [the chancellor] can make that work we will support it. I am not in favour of pensioners in Malaga getting the winter allowance. I presume the reason he has done this is because he needs to have some kind of legally watertight way of taking it away from people who feel they are entitled to it. Presumably if it is hotter in Malaga than in Britain there are other potential temperature variations which could cause legal complexities. Let's wait and see whether he can make that work. But if he can we'll support that."
Balls said the "difficulty" of Labour's "position" stems from the possibility that Britain could be saddled with a £96bn deficit by 2015-16 and spending plans will already have been drawn up for that financial year that would have started by the time of the general election. But he said that Labour would be acting differently if it were in office now.Balls said the "difficulty" of Labour's "position" stems from the possibility that Britain could be saddled with a £96bn deficit by 2015-16 and spending plans will already have been drawn up for that financial year that would have started by the time of the general election. But he said that Labour would be acting differently if it were in office now.
The shadow chancellor said: "I, right now, would reverse the top rate of income tax and use the money to boost tax credits for working families. That would have an impact on the bottom 20%. Bank bonus tax for youth jobs, mansion tax [to pay for the] 10p [tax rate], reverse the top rate of tax now and put the money into tax credits – each of those three things would have a direct impact on the bottom 20% and on the top 20%."The shadow chancellor said: "I, right now, would reverse the top rate of income tax and use the money to boost tax credits for working families. That would have an impact on the bottom 20%. Bank bonus tax for youth jobs, mansion tax [to pay for the] 10p [tax rate], reverse the top rate of tax now and put the money into tax credits – each of those three things would have a direct impact on the bottom 20% and on the top 20%."
On a lighter note Balls mocked Osborne after Barack Obama called him "Jeffrey" after confusing him with the R&B singer Jeffrey Osborne. "His friends call him George, the President calls him Jeffrey... but to everyone else he's just Bungle."On a lighter note Balls mocked Osborne after Barack Obama called him "Jeffrey" after confusing him with the R&B singer Jeffrey Osborne. "His friends call him George, the President calls him Jeffrey... but to everyone else he's just Bungle."
Picking up on his Rainbow theme, Balls referred to the prime minister as he added: "Even Zippy on the frontbench can't stop smiling. Calm down, Zippy, calm down."Picking up on his Rainbow theme, Balls referred to the prime minister as he added: "Even Zippy on the frontbench can't stop smiling. Calm down, Zippy, calm down."
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