April 15th, 2014

Labour’s plan will tackle the cost-of-living crisis which out of touch Tories want to tell us is over – my Guardian article

Over the coming weeks we can expect ministers to start telling us that the cost of living crisis is over. Will people buy it? I don’t think so. Because for most families in Britain today such a declaration, on the back of a handful of economic statistics, will only confirm just how out of touch this government is.

First, while growth has finally returned after three damaging years of flatlining, millions of people are not feeling any recovery in their own lives and standard of living. Of course people recognise there is at long last a statistical recovery in the nation’s GDP. But no matter how much ministers and commentators try to insist otherwise, most people simply do not feel it in their own pocket. Just last week more than four in five voters told Ipsos Mori they believe there is a cost of living crisis.

Headline figures often struggle to give us the full picture. Average earnings figures, which can be driven by large pay rises at the top, often mask what is happening in the middle and at the bottom. We know that bankers’ pay in London, where most of the top earners are based, grew nearly five times faster than the pay of the average worker last year.

Meanwhile, different measures of inflation tell us different things. The CPI measure, for example, doesn’t include high and rising housing costs that are a huge pressure on so many families and young people at the moment.

Second, there is a huge amount of lost ground to catch up. After four years when they have lagged behind, hopefully wages will soon begin to finally rise faster than prices. But it will require a huge turnaround to make people better off compared with 2010.

Working people are now on average £1,600 a year worse off since the last election because wages have lagged behind prices. On top of this, figures from the IFS show that by next year households will be almost £1,000 a year worse off on average because of all tax and benefit changes since 2010.

This is now set to be the first time in living memory when people are worse off at the end of the parliament than they were at the beginning. At the next election, the answer to Ronald Reagan’s famous question: “Are you better off than you were four years ago?” – looks likely to be a resounding no. No wonder David Cameron and George Osborne are desperate for Labour to stop talking about this issue.

But third, and most important, the ongoing cost of living crisis is deeper and broader than one or two sets of figures. It’s about whether most people on middle and lower incomes see their real earnings grow in line with the growth in the economy. And whether the record numbers of people who want to work fulltime but are forced to work part-time believe they can now afford to make ends meet.

As Ed Miliband has said, the cost of living crisis is about who gets the rewards, what the prospects are for your kids and whether there is security or insecurity at work. It’s about the broken link between the wealth of the country as a whole and people’s own finances.

At the weekend, Osborne tried to claim that the link isn’t broken. But in his own budget, the Office for Budget Responsibility said that real earnings will continue to grow more slowly than GDP for every year in their forecast period, meaning that people’s pay will continue to fall further behind the wealth of our economy.

With these challenges in the real economy, as well as evidence that this is not a balanced recovery and that growth is set to slow down again next year, this is not a time for complacency. Perhaps Osborne should take some time out from his campaign for the Conservative leadership election in 2015 and focus on his day job?

Over the coming months Labour will continue to set out radical but credible policies to earn our way to higher living standards for all, not just a few and tackle this deep-seated cost of living crisis.

We will make work pay and tackle insecurity by strengthening the minimum wage, incentivising the living wage, ending the abuse of zero-hours contracts and expanding free childcare for working parents.

We will make sure markets work for consumers and businesses by reforming our uncompetitive banks and reforming the energy market too, with a price freeze for families and businesses while those long-term changes are brought in.

We will create more good jobs and build a stronger and more balanced recovery by devolving economic power to Britain’s towns and cities, boosting vocational education, getting young people into work, cutting business rates, introducing a British Investment Bank and increasing house building to at least 200,000 a year.

And we will balance the books in the next parliament, but do so in a fairer way. That is why Labour wants to see a lower 10p starting rate of tax to help 24 million people on middle and lower incomes and, for the next parliament, we will reverse this government’s £3bn top rate tax cut for the top 1% of earners.

Next year’s election will be about who understands the pressures facing ordinary people across our country, who has a plan to change our economy and earn our way to higher living standards for all and not just a few, and who will get the deficit down in a fair way.

It will both be about this government’s record and about who has the ideas for Britain’s future to tackle a cost of living crisis that the Conservatives say does not exist, but which almost everyone else is living through day by day.

Posted April 15th, 2014 by Ed
April 14th, 2014

This year I enjoyed every minute – my blog on the 2014 London Marathon

All of us London Marathon finishers, waking up sore and drained the morning after the race day before, will have paused in silent thought at the news that a 42-year-old man collapsed and died at the finish line.

It was hot and draining out on the course in south and east London on Sunday. And this terrible news is a reminder that, for all the smiles and flags and novelty costumes, the marathon is a tough ordeal. All of us will have seen many runners laid out on the side of the course getting expert help. Thankfully, they all made it through the day OK. Our thoughts are with the loved ones of the man who didn’t.

Yesterday turned into a terrible tragedy for one family. It was a day of personal triumph for many thousands of others: hard training and determined fundraising, often in memory of a much-missed friend or family member or to back a cause close to their heart.

And the best thing is that all of us are full participants out on the pitch. The day before I stood in the crowd at Craven Cottage watching Fulham beat Norwich – 25,000 of us watching 22 striving athletes perform. But at the marathon it is as though all 25,000 of us and more walk down from the stands, pull on a shirt and join in.

It is such a privilege to be part of such a race. And then there are the cheering crowds of family, friends and spectators who yell and shout non-stop for 26.2 miles. It s uplifting, but it does make you feel a bit guilty. Yvette refers to the challenge of getting the kids round London with their “Go Ed” sign as her own “Spectator Marathon”. But after ages of waiting, us runners fly by in a moment. You want to stop and say hello rather than just wave. But if you stop, will you ever start again?

I had my normal array of memorable moments. Standing at the start jostling for position with giant bottles of Buxton water and Lucozade. Being brushed by a bare-bottomed mankini-wearer. A brief chat with the London Pride beer bottle before he sped off at mile five. And while many hundreds of people just shouted out “Ed Balls”, it was the woman who yelled out: “Oh look, it’s Ed Davey” that I will never forget.

For me, like so many others, the fundraising is a big and very personal part of the challenge. Running under the self-billing of “slowest MP but best fundraiser,” I am really proud to have raised more than £154,000 over three years for Action for Stammering Children and Whizz-Kidz.

But by the time I got to the race itself, Sunday was all about my time. It was a race against myself to meet a goal I had thought about over many many hours of training – to break the five-hour barrier for the first time.

At halfway, in 2hr 13min, I was well on track – but I knew the pace and heat would take its toll. And at mile 19, going through Canary Wharf, my head was dropping and energy draining. So my running partner Bev and I took a strategic decision. I knew I could finish strong and that we had time to play with. So we decided to walk for a mile or so to recuperate and regroup, squeezing my room for manoeuvre but lifting my mood and energy.

And it worked. From mile 22 I was back on track, passing runners, enjoying the crowds, and while the last mile was tough because of the pace, I knew I could do it. My goal was 4hr 59min 59sec. So to come in with over two minutes to spare at 4:57:40 felt like a total triumph.

But there’s the rub. Unlike my last two, I really enjoyed every minute of this London Marathon. Having finally met my two goals – less than five hours run, more than £150,000 raised – Yvette is now convinced I should quit while I’m ahead. She’s probably right. Probably …

Posted April 14th, 2014 by Ed
April 11th, 2014

Politically Speaking in the Wakefield Express

Coca-Cola is a big international company, but in Outwood it is also very much a local firm. If you buy a can of Coke anywhere across Wakefield and the north of England, the chances are it’s been manufactured using water from East Ardsley reservoir.

The company has a proud history of manufacturing and distributing from its site on Junction 41. This year it’s the 25 anniversary of the Outwood plant. On a tour with local staff and Coke’s Global CEO, we saw the company’s latest £30 million new state-of-the-art warehousing facility for ourselves.

The staff I spoke to are proud of the company’s commitment to manufacturing in the area. Over the last five years Coke has invested £100 million in Outwood. It’s just the kind of committed manufacturing production and investment we need more of if we are to generate more good local jobs.

Because with times still tough for too many local families and pensioners, getting more investment into our local economy from big companies like Coke, as well as from successful small businesses, is vital. Because only by securing more business investment, with backing from Government, can we tackle the cost of living crisis and secure a recovery for everyone, not just a few.

******
Wakefield Hospice does such amazing work for people in our area. And I’m always keen to support them however I can. A few years back they persuaded me to abseil down Wakefield Cathedral to raise money – one of the most terrifying things I’ve ever done.

A few weeks back they got in touch to ask for help with some fundraising and I tentatively asked how I could help.

Regular readers may recall that I took up running a few years back to the surprise of many, not least my wife Yvette. So when the Hospice asked me to start their annual 10km run I heaved a small sigh of relief. Of course I would start the race, and would be happy to complete in it too.

So on Sunday morning I joined thousands of local runners, as well as members of my office team, in my running shoes. Team Ed Balls raised over £1000 for the Hospice. I also managed to complete the race in just under an hour. This bodes well for this weekend when my trainers will have another outing, this time for the London Marathon. I’m determined to better my time from the last two years and get round the 26 mile route in under five hours. This weekend I’m running for the disabled children’s charity Whizz-Kidz and Action for Stammering Children.

To support please visit my fundraising page: www.justgiving.com/teams/edballs2014 or contact my office on 0113 253 9466.

ENDS

Posted April 11th, 2014 by Ed
April 9th, 2014

My Column in the Morley Observer

A local dad called my office last week at his wits end. He told us he had nowhere left to turn and no food in the cupboard for his kids. And he asked: “how do I contact a food bank?”

Over the last couple of years foodbank collections have become an all too familiar site in our local supermarkets. The Morley and South Leeds foodbank provides basic essentials to hundreds of local families each week.

So I joined volunteers at Morley Asda on Friday evening to collect donations. They told me many of those coming to them for help are in work but on low pay or have irregular hours. Others have been hit hard by the unfair bedroom tax which has taken the last £5 or £10 a week they had for food.

These families are facing impossible choices; to eat, heat their home or pay the rent. While, over Easter, many of us will be worrying about their kids eating too much chocolate, these parents – like the dad who contacted my office – will have no extra money for Easter eggs.

The good news is the shoppers we met on Friday were a very generous bunch. Bag after bag of basic groceries was handed over for the foodbank. Most contained a couple of tins, a bag of pasta, tea bags, sugar – the basics.

Food poverty has become a depressing reality for too many people. While the Government boasts about an economic recovery, most people are seeing no benefit. And according to our local foodbank, the problem is getting worse, not better.

I will continue to call for action from the Government to deliver an economic recovery that works for everyone, not just those at the top. We need urgent action to deal with a cost of living crisis that is pushing too many people to the brink of despair.

********

Wakefield Hospice does amazing work for people in our area. And I’m always keen to support them whenever I can. A few years back they persuaded me to abseil down Wakefield Cathedral to raise money – one of the most terrifying things I’ve ever done.

I took up running a few years back to the surprise of many, not least my wife Yvette. So when Wakefield Hospice told me they’d like me to start their annual 10km run I heaved a small sigh of relief. Of course I would start the race, and would be happy to compete in it too.

The race took place on Sunday morning. Along with thousands of runners, as well as members of my office team in Morley, I donned my running shoes and completed the Wakefield Hospice 10km in under an hour. Team Ed Balls raised over £1000 for this brilliant local cause. The run as a whole will raise over £40,000.

And my running shoes will be out again this weekend for the London Marathon. I’m determined to better my time from the last two years. I’m running for the disabled children’s charity Whizz-Kidz and Action for Stammering Children. Anyone who wants to support can visit my fundraising page: www.justgiving.com/teams/edballs2014 or please contact my Morley office on 0113 253 9466.

Posted April 9th, 2014 by Ed
April 8th, 2014

Team Ed Balls ran 10k for Wakefield Hospice and raised over £1,000

Wakefield Hospice does such amazing work for people in our area

With Wakefield Mayor, Cllr Janet Holmes and Team Ed Balls

. And I’m always keen to support them however I can. A few years back they persuaded me to abseil down Wakefield Cathedral to raise money – one of the most terrifying things I’ve ever done.

A few weeks back they got in touch to ask for help with some fundraising and I tentatively asked how I could help.

Regular readers may recall that I took up running a few years back to the surprise of many, not least my wife Yvette. So when the Hospice asked me to start their annual 10km run I heaved a small sigh of relief. Of course I would start the race, and would be happy to complete in it too.

So on Sunday morning I joined thousands of local runners, as well as members of my office team, in my running shoes. Team Ed Balls raised over £1000 for the Hospice. I also managed to complete the race in just under an hour. This bodes well for this weekend when my trainers will have another outing, this time for the London Marathon. I’m determined to better my time from the last two years and get round the 26 mile route in under five hours. This weekend I’m running for the disabled children’s charity Whizz-Kidz and Action for Stammering Children.

To support please visit my fundraising page: www.justgiving.com/teams/edballs2014 or contact my office on 0113 253 9466.

Posted April 8th, 2014 by Ed
April 8th, 2014

Our foodbanks becoming an all too familiar site

A local dad called my office last week at his wits end. He told us he had nowhere left to turn and no food in the cupboard for his kids. And he asked: “how do I contact a food bank?”

Over the last couple of years foodbank collections have become an all too familiar site in our local supermarkets. The Morley and South Leeds foodbank provides basic essentials to hundreds of local families each week.

So I joined volunteers at Morley Asda on Friday evening to collect donations. They told me many of those coming to them for help are in work but on low pay or have irregular hours. Others have been hit hard by the unfair bedroom tax which has taken the last £5 or £10 a week they had for food.

These families are facing impossible choices; to eat, heat their home or pay the rent. While, over Easter, many of us will be worrying about their kids eating too much chocolate, these parents – like the dad who contacted my office – will have no extra money for Easter eggs.

The good news is the shoppers we met on Friday were a very generous bunch. Bag after bag of basic groceries was handed over for the foodbank. Most contained a couple of tins, a bag of pasta, tea bags, sugar – the basics.

Food poverty has become a depressing reality for too many people. While the Government boasts about an economic recovery, most people are seeing no benefit. And according to our local foodbank, the problem is getting worse, not better.

I will continue to call for action from the Government to deliver an economic recovery that works for everyone, not just those at the top. We need urgent action to deal with a cost of living crisis that is pushing too many people to the brink of despair.

Posted April 8th, 2014 by Ed
April 4th, 2014

Tax and benefit changes mean families will be £974 a year worse off by next election, IFS figures show

Tax and benefit changes mean families will be £974 a year worse off by next election, IFS figures show

Households will be £974 a year worse off by the time of the next general election because of tax and benefit changes since 2010, according to Labour analysis of figures from the Institute for Fiscal Studies (IFS).

The figures take into account all tax and benefit changes affecting households between 2010 and April 2015, including increases to the income tax personal allowance, as well as the rise in VAT and cuts to tax credits and child benefit.

Families with children have been particularly hard hit. A family with children where both parents are working will be on average £2,073 a year worse off, and where only one parent is working they will be on average £3,720 a year worse off.

Labour calculations, based on the IFS figures and analysis by the House of Commons Library, show that households will be around £950 a year worse off at the start of the new tax year this weekend, taking into account all changes since 2010.

These figures are in addition to the impact of wages falling in real terms, which have left working people on average £1600 a year worse off since 2010.

Ed Balls MP, Labour’s shadow chancellor, said:

“David Cameron is trying to tell working people they are better off, but he’s not fooling anybody.

“Taking into account all the changes to tax and benefits since 2010, families will be almost £1000 a year worse off on average by the time of the next election. In other words, the Tories are giving with one hand but taking away much more with the other.

“So whatever out of touch claims David Cameron and George Osborne try to make, these independent figures are clear: hard working people are worse off under the Tories.

“These figures also show that families with children, and one-earner families in particular, have been hit hardest of all by David Cameron and George Osborne’s choices. And they come on top of the £1600 a year real terms fall in wages which working people have seen since 2010.

“Yet while millions have seen their taxes go up, millionaires have been given a huge tax cut by this government. The top one per cent of earners have been given a £3 billion tax cut – worth an average of £100,000 for those earning over £1 million.

“Labour has a clear plan to earn our way to higher living standards and deal with the cost-of-living crisis. We will freeze energy bills, get young people into work with a compulsory jobs guarantee, expand free childcare, get more homes built and cut business rates for small firms.

“We also want to cut taxes for 24 million people on middle and lower incomes by introducing a lower 10p starting rate of tax. And to help us balance the books in the next Parliament in a fairer way we will reverse David Cameron’s £3 billion tax cut for the top one per cent of earners.”

Ends

Posted April 4th, 2014 by Ed's team
April 2nd, 2014

Celebrating 25 years of Coke in Outwood

Coke might be a big international company but here in Outwood they’re very much a local firm. If you buy a can of Coke in Leeds or Wakefield, the chances are it’s been manufactured using water from East Ardsley reservoir which is then bottled and distributed down the road in Wakefield.

Coke has a proud history in Wakefield and this year it’s the 25 anniversary of their Outwood facility. I joined staff, the Operations Director at Outwood, Ian Johnson and Coke’s Global CEO, John Brock for a tour of their latest, state-of-the-art warehouse at Junction 41.

The company have invested £30 million in the new facility. They’ve even named each of the warehouse’s automated forklift cranes after the loved ones of staff members – so as we walked around the building, Jessica was busy retrieving bottles of Sprite while Charlotte sped off to locate the Diet Coke.

In the last five years Coke have invested over £100m in the Outwood factory and the company’s commitment to the area is set to continue with new investment expected into a new production line.

The staff I spoke to, many of whom have been in post since the factory open, are proud of the company’s commitment to manufacturing in the area. It’s great to see such local production for a global brand. Here’s to the next 25 years!

Posted April 2nd, 2014 by Ed
April 1st, 2014

My speech to the British Chambers of Commerce Annual Conference

My speech to the British Chambers of Commerce Annual Conference

Thank you, Adam.

And thank you to the British Chambers of Commerce, and your Director-General, John Longworth, for inviting me to speak to your Annual Conference today – for the second time in this Parliament as Shadow Chancellor.

As I said when I spoke to your conference two years ago, the Chambers of Commerce truly represent the authentic voice of UK business.

Over the last two years you have proved that on the national stage with your successful campaigns on tax incentives for business investment and greater support for exporters – although I know there is more work to do.

And can I say from my own direct experience in government and as a local MP our local Chambers in Leeds and Wakefield have been hugely important in shaping the future of our local economies.

If you want to know the views of local small and medium sized businesses up and down the country then it is local Chambers of Commerce that you turn to.

But you do much more. In Leeds, where we have eight MPs – 5 Labour, 2 Conservative and a Liberal Democrat – it is not easy to put politics aside to forge a cross-party consensus on vital economic issues which matter to our area – one of the biggest economic powerhouses in the UK.

But we know in Wakefield and Leeds and across our city region that it is only by putting politics aside and forging a common view on transport, planning, winning inward investment, getting the best deal for our area that we can deliver the jobs and investment our areas so vitally need.

And it is our local Chamber in Leeds that has brought together business, all us MPs, the City Council and our LEP, to form Team Leeds to work together for the great good.

Without the Chamber this would not have been so successful – and I know this is a pattern that is repeated across our country.

Consensus

I know it is not fashionable to talk in Britain about the importance of consensus – locally or on the national stage.

And let us not be naïve – consensus is not always a good thing, as we learned to our cost when Britain joined the ERM.
But I know too that the most important things businesses need are stability and predictability – government decisions made and then stuck to so that you can plan ahead.

I know how frustrating politics can be when it looks as though politicians are continually moving the goal posts.

And that it is the clear view of business that, where possible, we politicians should seek consensus where we can in the national interest:

.. on the need to reduce the deficit, reforming our financial system, forging a new industrial policy, devolving powers down to business and our local economic leaders, investing in skills and our economic infrastructure.

I only wish we could achieve such a consensus on Britain’s continued membership of a reformed European Union.

We all know the EU needs to reform to deliver value for money for taxpayers, open up markets and secure rising prosperity.

But we are clear that there is no future for Britain in walking away from our biggest market.

We believe Britain is better placed to shape Europe’s future, and back British business, jobs and our national interest, if we are fully engaged rather than having one foot out of the door.

We would hold an in-out referendum if there was a further transfer of powers – a prospect we believe is possible, but unlikely in the next Parliament.

Not an arbitrary timetable for a referendum, which puts Tory party politics before the national economic interest, and is creating huge uncertainty for business.

To walk away from our EU membership would be reckless, foolish and deeply damaging. It would be anti-investment, anti-jobs and anti-business.

Which brings me to my fellow morning speaker, Michael Gove – one of the ‘exiters’ in the current Cabinet who has said that if a referendum was held now, he would vote for Britain to leave the EU.

Today is the first time we have shared a platform in this Parliament – and probably the first time the BCC has had two successive Education Secretaries back-to-back at your conference.

I have to say, I am very pleased that Michael has been here speaking this morning before me – any politician who accepts an invitation to speak on the morning of the 1st of April – Aprils Fools day – is always taking a risk. So I am glad Michael has helped share the burden.

I am also proud to be a member with Michael of the Prime Minister’s Holocaust Commission where I know we will put any party politics aside as we put in place a permanent memorial so future generations continue to remember and learn from that horror.

But I have not agreed with many of Michael’s school reforms.

Skills

I share his emphasis on rigour and school standards.

I fear his method – relying largely on a policy of allowing good schools to expand, but letting weaker schools slowly decline, is condemning too many young people to a second class education.

I favour a tougher approach to under-performance – which ensures our teachers are properly qualified and intervenes to tackle under-performance rather than waiting for weaker schools to wither away.

But my great frustration is that we – you and I – have so far failed to persuade him that vocational learning should be a first-class part of the curriculum, that theoretical learning is not the only route to excellence.

Just a few months ago I met the Chief Executives of a number of big IT companies at E-Skills. They were singing the praises of the IT Diploma, which they designed.

I remember the head of Vodafone telling me he knew this qualification would work when the head of a school’s computer science department complained he could only teach it in partnership with the business department. “Exactly” cried the Vodafone executive, “teach them how to use IT to solve problems. That’s what we want.”

But the IT Diploma has been scrapped with no adequate replacement.

And vocational learning has been downgraded in the school curriculum and derided as ‘soft’ by the Education Secretary. That is no way to use the talents of all and to raise aspirations.

You have told us that qualifications need to fit the realities of the modern economy.

That is why, following our review by Professor Chris Husbands, we will introduce a new gold standard vocational qualification. And we will insist that all young people study maths and English to 18 as part of the new ‘Tech Bacc’.

We will also put business in the driving seat on vocational qualifications and apprenticeships – so that you can shape qualifications and decide what qualifications work best for you and your employees and who delivers the training.

We will ask you to tackle free-riding and deliver an increase in the high-end apprenticeships in these sectors and supply chains, including in all companies seeking to bring in more skilled migrants.

You will decide what qualifications work best for you and your employees and who delivers the training. And we will devolve decision-making so that local businesses, LEPs and local colleges can work together to meet the skill needs of their areas.

TWO YEARS ON

Adam, I said I last spoke to this Conference two years ago.

Back then:

Our economy was stagnating and deficit reduction was grinding to a halt.

QE was being accelerated alongside low interest rates, but business investment was still falling and the much needed balanced recovery was proving elusive.

And with living standards falling, all of us here today – politicians, business leaders, and journalists too – were vying to see who were least popular with a worried and hard-pressed public.

I can see some of you thinking – some things don’t change!

But two years on, some things are changing.

After three long and difficult years of flatlining, our economy is finally growing again. Business confidence is up.

But we all know there is a lot of work still to do:

- To get the deficit down, but do so in a fair way

- To secure a long-term and balanced recovery

- And to ensure that this economic recovery is felt by and shared by all working people and tackle the insecurity that too many people feel about the future.

So today I want to talk to you about these three challenges and how the next Labour government intends to work with you and other political parties to rise to meet them.

GROWTH AND THE DEFICIT

Let me start with deficit reduction.

When I spoke here two years ago I started by saying that on this central economic objective, the Chancellor and I agree – Britain needed a credible plan for deficit reduction. And it still does.

Of course, the contentious issue of the past few years has been the pace of that deficit reduction and its impact on growth.

The Chancellor set out to get the deficit down faster than the plan he inherited. But having choked off the recovery, he is in fact now reducing it at a much slower pace than he or we planned.

We will inherit a deficit of £75bn next year. That is why I have been clear with my party that the next Labour government will have to be very different from our predecessors.

We will be cutting spending in 2015-16 and not raising it, with no more borrowing to cover day-to-day spending. We will get the current budget into surplus and the national debt falling as soon as possible in the next Parliament. And we want every tax and spending commitment in our manifesto to be independently audited by the Office for Budget Responsibility.

We will have to make tough and difficult choices.

That is why Labour called for, and last week supported in the House of Commons, an overall cap on structural social security spending. It is also why we have supported increases in the retirement age as life expectancy rises and said that we cannot continue to pay the winter fuel allowance to the richest pensioners.

And it is why we have embarked upon a Zero-Based Review of every pound of government spending.

And because we must make tough choices about priorities when resources are tight, we have set out difficult choices on tax too.

We are determined to get the deficit down but, at a time when living standards are still squeezed and public services are under pressure, this needs to be done in a fair way. That is why, as we finish the job of balancing the books, we will, for the next parliament, reverse this government’s top rate tax cut on earnings over £150,000.

And while we have supported – and indeed began – successive cuts in the main rate of corporation tax to make our tax system more competitive, down from 33 per cent in 1997 to 28 per cent by 2010 and 21 per cent today, we do not think we can justify another tax cut for large businesses in 2015, when so many small and medium sized business are under such pressure.

The next Labour government will instead cut and then freeze business rates for 1.5 million business properties, a tough choice we need to make to help more businesses when resources are tight.

Different and fairer choices. But with the deficit and debt now set to be much higher over the rest of this decade than anyone envisaged back in 2010, there will be no complacency from me and the next Labour government on deficit reduction and spending control.

SUSTAINING THE RECOVERY

The second challenge we face is to deliver the balanced investment and export led recovery we badly need.

The Chancellor’s latest Budget revealed that economic recovery is still very reliant on consumer spending.

Billed as a Budget for savers, it actually forecasts the savings ratio falling each year for the next five years as hard-pressed households draw down their savings and increase borrowing.

And while the OBR is once again forecasting that business investment will rise this year, with bank lending to business still falling and the economy expected to slow again next year, this is no time for complacency.

There are a number of areas where we believe action is needed.

Housing

On housing, the danger is that by boosting demand while failing to build more homes, the Chancellor will deliver an unbalanced recovery and make home ownership even further out of reach for the aspiring first time buyers his Help to Buy scheme should be helping.

The new Governor of the Bank of England is right to be worried that the recovery is not yet secure or balanced. That is why it is vital that the Chancellor acts to support growth and investment by getting more homes built for the millions who aspire to get on the housing ladder.

We have a lopsided housing market because rising demand is simply not being matched by rising supply.

And the danger is that the Bank of England Governor may be forced to act to rein in the housing market in some parts of the country and we’ll see rising interest rates for all.

It is why we have urged the government to bring forward investment in affordable homes and called for much bolder measures to boost housing supply including a Help to Build scheme to give government guarantees to SME house-builders.

Industrial Policy

But securing a strong and balanced recovery also demands we do more to secure long-term business investment.

We welcome the Chancellor’s decision to reverse the cuts to capital allowances he made in his first Budget, but there is much more we need to do to build a modern industrial policy.

Some of you will say government should just get out of way. And let me say, if government action is undermining confidence and investment then that is what government should do.

But on innovation, skills, planning, infrastructure – for government to walk away would be for government to abandon the long-term partnership we need to succeed.

You know in your own businesses you have no future trying to undercut emerging market economies like India, China and Brazil on cost and wages. And we cannot succeed as a country and win the global race through a ‘race to the bottom’ on wages and standards. That way is doomed to fail.

So to drive innovation the next Labour government would continue to support the technology strategy board and its catapult centres – successful initiatives we started.

Chuka Umunna and I have asked Mike Wright, Executive Director at Jaguar Land Rover, to lead a review for us on how we can help strengthen our manufacturing supply-chains and deliver the skills and innovation Britain needs to succeed, small and large businesses working together to invest and export.

To back our cities and sub-regions, we will make Local Enterprise Partnerships fit for purpose and devolve power and resources so that, working with Universities, local government and local business, they can do their job.

To support business lending, we propose to use revenues from the planned increase in the licence fees for the mobile phone spectrum, expected to be over £1billion in the next parliament, to capitalise the British Investment Bank so that, region by region, we can get small and growing businesses the finance they need to grow and create jobs.

To invest in our infrastructure, and following the path-breaking report by the Chair of the Olympic Delivery Authority, Sir John Armitt, we will set up an independent infrastructure commission to end dither and delay in infrastructure planning and build the consensus on infrastructure that we need to invest for the long-term.

In each of these vital areas of economic and industrial policy, Chuka Umunna and I know there is no quick fix. As a country we have to earn our way to rising prosperity.

BUILDING PUBLIC SUPPORT

But we also know we will not succeed unless we use the talents of all and ensure that everyone can benefit from economic recovery and not just a few.

Which brings me to my third challenge – sustaining public support for a modern economic policy.

We meet here with economic recovery finally getting going again after a long and protracted period of stagnation, and that return to growth is something to celebrate and nurture.

But with youth unemployment still very high, and living standards still falling for millions – meaning that most people are still not feeling any recovery at all – this is no time for complacency.

In my view, Britain has always succeeded, and can only succeed in the future, as an open and internationalist and outward-facing trading nation.

The next Labour government will back enterprise, support innovation and ensure great ideas and risk-taking are valued and rewarded.

Only by backing entrepreneurs and supporting wealth creation can we generate the profits to finance investment and win the confidence of investors from round the world.

But at a time when most people in our country are seeing their living standards falling year on year, we cannot take public support for this open, global vision of a dynamic market economy for granted.

At a time when politicians and business leaders often seem to compete with each other for bad headlines, be it MPs expenses, tax avoidance schemes, or rising energy prices, none of us can afford to bury our heads in the sand and ignore the legitimate and mainstream concerns of people across our country that our economy is not currently working for them and their families.

That is why we believe it is so vital that government works closely with all businesses – large and small: to promote open markets, competition and long-term wealth creation; and to reform our economy so that, by using and investing in the talents of all, we can deliver rising living standards not just for a few but for everyone in every part of the country.

Our task is to show that a dynamic and open market economy can work to raise living standards for all.

And when it doesn’t – because competition or regulation or tax law fails – then business and government must work together to solve the problem and win back public trust.

Markets promote growth and innovation and reward entrepreneurship – and when they are competitive they should set prices, not Government or anyone else.

But being pro-market and pro-competition also means acting when markets fail and competition does not operate, for instance in banking and in energy, otherwise we risk public support.

So in banking, we will ask the CMA to report on how to create at least two new sizeable and competitive banks to challenge the existing high street banks to ensure that the market is competitive for the long term.

As the OFT found last month there is a lack of competition in our banking system and small and medium-sized businesses are being let down. We need to reform our banking system so that businesses can get the funding they need and we can earn our way out of the cost-of-living crisis.

Similarly, we need action to make our energy market more competitive so that it works better for both household and business customers.

That is why we have said that we will introduce a new, tougher and more transparent regulatory regime for what remains a highly concentrated utility industry.

And while these long-term reforms to increase competition are being introduced, we believe it is right and fair to give households and businesses some respite with a 20 month price freeze just as we introduced a one-off windfall tax to give the taxpayer redress after the post-privatisation excesses in the 1990s.

This isn’t just to benefit households – as Ed Miliband said last week it is deliberately to also benefit 2.4 million businesses across the UK.

And there is a third area where we need urgent action – youth jobs.

In your Budget submission you rightly said that tackling high levels of youth unemployment must be a major priority. Sadly there were no new measures on this in the Budget, despite the number of young people on the dole for more than 12 months almost doubling since the last election.

As a country we simply cannot afford to be wasting the talents of thousands of young people and leaving them stuck on the dole for years on end. It’s bad for them, it’s bad for our economy and it’s bad for taxpayers who have to pay the bill.

So if we form the next government we are determined to tackle this problem with a Compulsory Jobs Guarantee.

The government will work with employers to help fund paid work with training for six months. It will mean paid starter jobs for over 50,000 young people who have been left on the dole for over a year by this government. But it will be a tough contract – those who can work will be required to take up the jobs on offer or lose their benefits. A life on benefits will simply not be an option.

After the global banking crisis and with bank bonuses soaring again this year, it’s fair to pay for our jobs plan with a repeat of Labour’s tax on bank bonuses, and to raise the bank levy to help make work pay by expanding free childcare for working parents.

CONCLUSION

So, in conclusion, let us work to reduce the deficit in a fair way, deliver a strong and balanced recovery and rebuild public trust that an open and dynamic economy can work for all working people and tackle the cost of living crisis.

That is the agenda that Ed Milliband, my Shadow Cabinet colleagues and I have been setting out in recent weeks – pro-business, but anti-”business as usual”.

Let us together build a long-term consensus to secure the skills, and the long-term investment and market reforms we need to deliver rising prosperity for all. I do believe the future of our country depends upon it.

Thank you.

Ends

Posted April 1st, 2014 by Ed
March 31st, 2014

I’m running again

We’re now less than a fortnight away from the London Marathon. And having completed my final 21 mile training run at the weekend, I’m definitely going to be running for a third time to raise funds for Whizz-Kidz and Action for Stammering Children.

Ed running alongside fundraisers from Action from Stammering Children and Whizz-Kidz

Over the last three years, I’ve been through the highs and lows of marathon running – “runners’ flu” the week before, an old ankle injury flaring up on the day, being passed by a four-legged Water-Aid camel at mile 14 – but also the fabulous crowd and  the great feeling when you finally cross the finish line.

Back in 2011, I had no intention of running once – never mind three times. But when Action for Stammering Children and Whizz-Kidz asked me to run again this year, I couldn’t say no.

This year I’m aiming to raise at least £25,000 – which would break the £130,000 barrier for these two great charities – I hope you will follow the link below and show your support for these two great causes.

Donate at www.justgiving.com/teams/edballs2014/

Whizz-Kidz helps transform the lives of disabled children across the UK – and this afternoon my colleague Andy Burnham and I joined scores of Whizz-Kidz runners at a reception at the House of Commons.

Action for Stammering Children, which supports the Michael Palin and Leeds stammering centres, is a charity and a cause very close to my heart.

Posted March 31st, 2014 by Ed