This Tory plan is hurting, but it’s not working - Ed Balls

We now know just how badly David Cameron and George Osborne’s reckless gamble with the economy has backfired.

After stalling for a year our economy has now gone into reverse. Unemployment is at a 17 year high. And the result is £158 billion more borrowing than planned.

This Tory plan is hurting, but it’s not working.

Of course if we had won the election there would have been difficult decisions for Labour on tax, spending and pay. But, as we always warned, cutting spending and raising taxes too far and too fast has completely backfired.


So while we have never opposed every cut, we will continue to oppose this Tory-led government when they do things that are unfair, bad for jobs or self-defeating. And as I said in the Daily Mirror yesterday Labour would be making different choices now – and we will make tough but different choices in the future.

That is why we are campaigning for Labour’s five point plan for jobs

Our plan includes a temporary VAT cut, tax breaks for small firms taking on extra workers and a bank bonus tax to fund 100,000 jobs for young people. It would be a fairer and better way to get the deficit down – investing in jobs for the future rather than borrowing to keep more and more people on the dol

But if these complacent Tories and Lib Dems plough on regardless, the next Labour government will inherit a really difficult situation.

That’s why Ed Miliband and I can’t make any promises now – over three years before the election – to reverse spending cuts or tax rises. We will have to see where we are in 2015 because – unlike Nick Clegg – we won’t make promises we can’t keep.

And we will have a big job on our hands to sort out the deficit, clear up George Osborne’s economic mess and deliver social justice in tougher times

This government’s economic failure also means tough times are set to continue now. And in tough times the priority has got to be protecting jobs rather than pay rises – which is why we can’t oppose the government’s decision to extend public sector pay restraint. But I’ve told the Chancellor the average 1% cap must be done fairly – tougher on those at the top to give bigger pay rises to those on lower incomes.

If David Cameron and George Osborne refuse to change course we cannot duck the reality – the next Labour government will have to pick up the pieces and clear up their mess. But as long as this government is getting it wrong, we will continue to say so loud and clear.

So in the eight weeks between now and the Budget, let’s expose how the Tories and Lib Dems are getting it badly wrong. And let’s make the case for Labour’s five point plan for jobs – a fairer and better way to get Britain working again.

Ed Balls