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| Ed Miliband: We'll tackle deficit with 'sensible' cuts | Ed Miliband: We'll tackle deficit with 'sensible' cuts |
| (35 minutes later) | |
| Ed Miliband has ruled out any uncosted spending commitments in Labour's election manifesto, as he set out his party's plans to reduce the deficit. | Ed Miliband has ruled out any uncosted spending commitments in Labour's election manifesto, as he set out his party's plans to reduce the deficit. |
| Dealing with the public finances will be an "essential test" of Labour's credibility, the party leader said. | Dealing with the public finances will be an "essential test" of Labour's credibility, the party leader said. |
| He argued boosting wages and taxing the better off, in addition to budget cuts in most areas, could contribute to eliminating the deficit by 2020. | He argued boosting wages and taxing the better off, in addition to budget cuts in most areas, could contribute to eliminating the deficit by 2020. |
| Chancellor George Osborne said Labour only offered "economic chaos". | Chancellor George Osborne said Labour only offered "economic chaos". |
| During a visit to Newcastle University he said Mr Miliband and his party "created the deficit and by delaying paying off the deficit what he's really telling the British people is that he would borrow more money and put up taxes". | During a visit to Newcastle University he said Mr Miliband and his party "created the deficit and by delaying paying off the deficit what he's really telling the British people is that he would borrow more money and put up taxes". |
| In his speech in central London, Mr Miliband attempted to counter opponents' claims that he has no plan to tackle levels of annual borrowing, forecast to be £91.3bn this year and £75.9bn in 2015-16. | In his speech in central London, Mr Miliband attempted to counter opponents' claims that he has no plan to tackle levels of annual borrowing, forecast to be £91.3bn this year and £75.9bn in 2015-16. |
| He pledged "sensible reductions in public spending" and outlined pledges Labour has made so far: | He pledged "sensible reductions in public spending" and outlined pledges Labour has made so far: |
| He also said Labour would make savings of £500m in local government. | He also said Labour would make savings of £500m in local government. |
| This includes merging some of England's fire 46 authorities and scrapping the New Homes Bonus, which rewards councils for the amount of homes built in their area. | This includes merging some of England's fire 46 authorities and scrapping the New Homes Bonus, which rewards councils for the amount of homes built in their area. |
| Asked afterwards what more Labour would do to cut spending, he said that beyond the measures announced: "The right way to make these decisions is frankly in government". | Asked afterwards what more Labour would do to cut spending, he said that beyond the measures announced: "The right way to make these decisions is frankly in government". |
| He added: "If you start picking things out of the air, they won't be the most sensible changes for the country." | He added: "If you start picking things out of the air, they won't be the most sensible changes for the country." |
| Mr Miliband came under fire from his political opponents and from some within his own party for omitting any mention of the deficit from his keynote conference speech in September - which he delivered by memory without autocue or notes. | Mr Miliband came under fire from his political opponents and from some within his own party for omitting any mention of the deficit from his keynote conference speech in September - which he delivered by memory without autocue or notes. |
| In his speech on Thursday, he said: "There is not a path to growth and prosperity for working people which does not tackle the deficit." | In his speech on Thursday, he said: "There is not a path to growth and prosperity for working people which does not tackle the deficit." |
| Promising a "balanced approach which deals with our debts, but does so sensibly", he called for a "higher wage, higher skill economy". | Promising a "balanced approach which deals with our debts, but does so sensibly", he called for a "higher wage, higher skill economy". |
| Labour would also devolve "unprecedented levels" of spending to local government, he added. | Labour would also devolve "unprecedented levels" of spending to local government, he added. |
| 'No answer' | 'No answer' |
| As a signal of Labour's approach if it wins power, shadow chancellor Ed Balls has written to colleagues warning them they face cuts in their departmental budgets year after year until the deficit on day-to-day spending has gone. | |
| The health and overseas aid budgets will be the only areas to be immune from the squeeze on spending, Mr Miliband said, although the schools budget in England could also be ringfenced too. | The health and overseas aid budgets will be the only areas to be immune from the squeeze on spending, Mr Miliband said, although the schools budget in England could also be ringfenced too. |
| Insisting that none of Labour's pre-election spending commitments will be funded by extra borrowing, Mr Miliband contrasted his approach with what he claims are £7bn worth of unfunded tax cuts promised by the Conservatives. | Insisting that none of Labour's pre-election spending commitments will be funded by extra borrowing, Mr Miliband contrasted his approach with what he claims are £7bn worth of unfunded tax cuts promised by the Conservatives. |
| Analysis | Analysis |
| Nick Robinson, BBC political editor | Nick Robinson, BBC political editor |
| Just weeks after the speech which forgot the deficit comes the speech that remembers it - big time. | Just weeks after the speech which forgot the deficit comes the speech that remembers it - big time. |
| Ed Miliband knows he has a problem and can sense an opportunity. | Ed Miliband knows he has a problem and can sense an opportunity. |
| The problem is Labour's lack of economic credibility - something every opinion poll confirms. | The problem is Labour's lack of economic credibility - something every opinion poll confirms. |
| The opportunity is the chance to paint the Tories as not merely serious about cutting borrowing but ideologically obsessed with it. | The opportunity is the chance to paint the Tories as not merely serious about cutting borrowing but ideologically obsessed with it. |
| Read more from Nick | Read more from Nick |
| With polls suggesting David Cameron's party is still more trusted on the economy, Mr Miliband also attempted to link his wider employment policies to deficit reduction. | With polls suggesting David Cameron's party is still more trusted on the economy, Mr Miliband also attempted to link his wider employment policies to deficit reduction. |
| He suggested tax receipts could be bolstered by getting people into more highly skilled, better-paid jobs and that Labour will prioritise "productive investment" in skills. | He suggested tax receipts could be bolstered by getting people into more highly skilled, better-paid jobs and that Labour will prioritise "productive investment" in skills. |
| Asked about the party's record in government, Mr Balls told BBC News: "We didn't spend every pound well, of course we didn't. No government ever does." | Asked about the party's record in government, Mr Balls told BBC News: "We didn't spend every pound well, of course we didn't. No government ever does." |
| But he said he was "proud" of his party's record and added: "I don't think there is any foundation at all to the idea that Labour's spending caused a global financial crisis." | But he said he was "proud" of his party's record and added: "I don't think there is any foundation at all to the idea that Labour's spending caused a global financial crisis." |
| The shadow chancellor said Labour would balance the way in a "tough but balanced" way. | The shadow chancellor said Labour would balance the way in a "tough but balanced" way. |
| 'Economic risk' | 'Economic risk' |
| Chancellor George Osborne's plans are predicated on achieving a surplus in the public finances by 2018-9. He has said he believes this can be done without any tax rises and has rejected suggestions it will entail "colossal" cuts to public expenditure. | Chancellor George Osborne's plans are predicated on achieving a surplus in the public finances by 2018-9. He has said he believes this can be done without any tax rises and has rejected suggestions it will entail "colossal" cuts to public expenditure. |
| The government is expected to borrow more money this year than had previously been predicted. | The government is expected to borrow more money this year than had previously been predicted. |
| In last week's Autumn Statement, the Office for Budget Responsibility raised its borrowing forecast for the current financial year from £86.6bn to £91.3bn but said this would still be below last year's total of £97.5bn. | In last week's Autumn Statement, the Office for Budget Responsibility raised its borrowing forecast for the current financial year from £86.6bn to £91.3bn but said this would still be below last year's total of £97.5bn. |
| Borrowing levels are forecast to fall every year until 2018-9, although Labour say the government has long abandoned its original 2010 target of eliminating the deficit by the time of next year's election. | Borrowing levels are forecast to fall every year until 2018-9, although Labour say the government has long abandoned its original 2010 target of eliminating the deficit by the time of next year's election. |
| Responding to Mr Miliband's speech for the Conservatives, Business minister Matthew Hancock said the plans were a "risk to the economic recovery". | Responding to Mr Miliband's speech for the Conservatives, Business minister Matthew Hancock said the plans were a "risk to the economic recovery". |
| He said: "Labour's policy is to run deficits forever - more borrowing that would add to the national debt every single year. | He said: "Labour's policy is to run deficits forever - more borrowing that would add to the national debt every single year. |
| "That would mean more debt than hardworking taxpayers or our children could ever hope to repay." | "That would mean more debt than hardworking taxpayers or our children could ever hope to repay." |
| 'Relentless grind' | 'Relentless grind' |
| The Lib Dems have said they would borrow less than Labour and cut less than the Conservatives. | The Lib Dems have said they would borrow less than Labour and cut less than the Conservatives. |
| Chief Secretary to the Treasury Danny Alexander said Mr Miliband's speech contained "nothing new at all". | Chief Secretary to the Treasury Danny Alexander said Mr Miliband's speech contained "nothing new at all". |
| He told BBC News Labour's approach to deficit reduction was a "slow and relentless grind" while the Conservatives would go "even faster than is necessary". | He told BBC News Labour's approach to deficit reduction was a "slow and relentless grind" while the Conservatives would go "even faster than is necessary". |
| The Institute of Directors welcomed Mr Miliband's focus on deficit reduction. Director general Simon Walker said: "The strong message from both Ed Miliband and Ed Balls on the need to cut departmental spending is one of the clearest signs yet that Labour acknowledge there is still a long way to go." | The Institute of Directors welcomed Mr Miliband's focus on deficit reduction. Director general Simon Walker said: "The strong message from both Ed Miliband and Ed Balls on the need to cut departmental spending is one of the clearest signs yet that Labour acknowledge there is still a long way to go." |
| John Cridland, the director general of the CBI, said all parties needed to recognise that "serious structural changes" were needed to public services. | John Cridland, the director general of the CBI, said all parties needed to recognise that "serious structural changes" were needed to public services. |
| "Cutting spending alone will not meet the challenges we face. It will take bold decisions, like integrating health and social care, to help address the pressures that an ageing population places on our public services, especially the NHS," he said. | "Cutting spending alone will not meet the challenges we face. It will take bold decisions, like integrating health and social care, to help address the pressures that an ageing population places on our public services, especially the NHS," he said. |