Monday, 10 June 2013

Labour too must plan for difficult times ahead

We all know that in 2015 there will be less money around.

Three years into this Government it is clear their economic policies have failed. People are worse off, growth has stalled, investment has fallen and the deficit is not coming down. High unemployment and no growth are costing us a fortune in benefits and lost tax receipts.

David Cameron and George Osborne are making a terrible mistake in ploughing on with their failing plan. Action for growth this year, next year and the years after should be the purpose of any Spending Review this summer.

But as Ed Balls set out this week, Labour needs to start planning now for what will be a very difficult inheritance in 2015. We will need an iron discipline and a relentless focus on our priorities.

That’s why we have said we will set out a clear and balanced plan to support growth alongside a clear timetable to get the deficit and the debt down. Labour will work to find efficiency savings and switch resources to our priorities, but we cannot prepare now on any basis other than inheriting very tough spending plans from this year’s Spending Review. They will be our starting point.

That means tough choices. When our NHS and social care system is under such pressure it cannot remain a priority to pay the Winter Fuel Allowance to the richest five per cent of pensioners - those with incomes high enough to pay the higher or top rates of tax.

Labour is clear: the Tory-led Government has failed. But as things stand, we too must plan for difficult times ahead.