March 14th, 2015

Osborne won’t be able to run away from five years of failure – my article in the Sunday Mirror

Having run the last three London Marathons, I’ve felt jealous watching people in training for next month’s race, knowing that I won’t be taking part.

But even if I got a place at this late stage, it would be pointless: you can’t start training with six weeks to go. That’s George Osborne’s problem too – he’s left it too late.

Because when he delivers this week’s Budget the Chancellor won’t be able to run away from five years of failure and broken promises.

Working people are worse off. Independent experts at the Institute for Fiscal Studies say that tax and benefit changes since 2010 have cost families an average of £1,127 a year.

And new figures show some families have been hit even harder: a one earner couple with children are an average of £1,949 a year worse off.

No last minute pre-election tax cut can make up for that. As everyone knows, this Tory Chancellor gives with one hand but takes away much more with the other hand.

And we all know our NHS is in crisis. But George Osborne is planning more extreme spending cuts after the election which go way beyond simply balancing the books.

Nobody believes he can deliver these plans without raising VAT again or putting our NHS at risk.

What we need instead is a better plan and a Labour Budget which puts working people first and saves our NHS.

So Ed Miliband and I will raise living standards with an £8 minimum wage, 25 hours of free childcare for working parents and by freezing energy bills until 2017.

We’ll guarantee apprenticeships for every school leaver, cut tuition fees to £6,000 and reduce business rates for small firms.

We’ll rescue our NHS from the Tories with 20,000 more nurses, 8,000 GPs and cancer tests guaranteed in one week – paid for by closing tax loopholes and a mansion tax on properties over £2 million.

We’ll cut taxes for 24 million working people with a lower 10p starting rate of tax and scrap the bedroom tax. And we’ll reverse the Tory tax cut for millionaires to help balance the books in a fairer way.

That’s the Budget we need. Not a desperate dash from a Chancellor who’s shown that he’s not fit to run a thing. ​

Posted March 14th, 2015 by Ed
March 13th, 2015

Labour’s first Budget will put working people first and save our NHS – my article in the Evening Standard

Budget Day next week comes just 50 days before the General Election. But for this Chancellor, anything he tries to conjure up now will be too little, too late. Whatever he tries to pull out of the hat on Wednesday, he cannot magic away the record of the past five years — or the political problems he has created for himself.

The Conservatives came into office promising to protect our National Health Service, make people better off and balance the books. But all those promises have now been broken.

Our NHS is in crisis — here in London and across the country — as waiting lists grow and it gets harder to see a GP.

Most people are still not feeling the benefit of the recovery. Wages after inflation are down by £1,600 a year since the last election — and in London, where stagnant wages combine with high housing costs, the annual loss is double that. And this cost-of-living crisis has led to tax revenues falling short, which is the key reason why George Osborne has broken his pledge to balance the books by this year.

The old Tory idea that cutting taxes for a few at the top means wealth will trickle down to everyone else hasn’t worked. And once again, a Tory Chancellor is giving with one hand but taking away much more with the other.

No pre-election tax cut can mask the £1,127 a year which the Institute for Fiscal Studies (IFS) says families have lost because of tax and benefit changes since 2010 — from higher VAT to cuts to tax credits.

But voters will judge the Chancellor not just on his record but on his plans for the future. And the more voters look at what’s in store, the more worried they get. Because the Chancellor now says he wants to go way beyond simply balancing the books with a target of a £23 billion budget surplus in 2019/20. As the IFS says, Osborne simply cannot deliver this — let alone the £10 billion of unfunded tax cuts he has promised — without “colossal cuts” to our public services.

I am sure next week he will shuffle around the numbers to show that his spending cuts will no longer take us back to 1930s spending levels as a share of national income.

He’s been rattled by the attacks on his risky and extreme spending cuts ever since he lashed out at the BBC for reporting the Office for Budget Responsibility’s verdict on his Autumn Statement.

But a few changed figures here and there will not alter the fundamentals. Osborne is planning deeper spending cuts in the next four years than during the past five, which would be devastating for our public services. Our analysis shows that the cuts to our police, armed forces and social care these plans would mean would be so crushing that they would be close to impossible to achieve. That’s why many fear the Tories will end up having to break their promises again — raising VAT and putting our NHS at risk.

So what would Labour do? Our better plan will put working families first and we will start in our first Budget.

First, we’ll make work pay. We will raise the minimum wage faster than average earnings, so it reaches at least £8 an hour by 2020. Firms who start paying the living wage will get tax breaks and exploitative zero-hours contracts will be banned. We will expand free childcare for working parents of three- and four-year-olds to 25 hours a week. The energy regulator will be given tough powers to ensure that when wholesale energy costs come down, bills for families come down too. And we will cut taxes for 24 million working people through a lower 10p starting rate of tax.

Second, we’ll back Britain’s businesses to grow and create more good jobs. We’ll cut business rates for small firms, promote competition in our banking sector and establish a British Investment Bank to boost lending to growing companies. We’ll secure Britain’s place in a reformed EU — not put jobs, trade and investment at risk by flirting with exit.

Third, we’ll support long-term investment. Our plan will get 200,000 new homes built a year by 2020. Following the Davies review, we’ll make a swift decision on expanding airport capacity, while taking into account the environmental impact. And we will devolve economic power and funding to city and county regions including London, so local areas can make decisions to drive investment and growth.

Fourth, we’ll invest in the next generation. We’ll reverse the decline in apprenticeships and guarantee an apprenticeship for every young person who gets the grades. Young people out of work for more than 12 months will be given a paid starter job — which they will have to take up or lose benefits — funded by a one-off tax on bank bonuses. We’ll also cut tuition fees to £6,000 a year to cut the burden of debt on graduates.

Fifth, we’ll balance the books fairly and save our NHS. We’ll reverse the Tories’ £3 billion a year tax cut for earnings over £150,000 a year and stop paying the winter fuel allowance to the richest five per cent of pensioners.

And we’ll say where the money is coming from for all our policies. That’s why we’ve said that to save and transform our NHS we will have a mansion tax on properties worth more than £2 million. Alongside closing tax loopholes and a levy on tobacco companies, it will mean an extra 3,400 nurses here in London, and a guarantee of cancer tests in one week.

Osborne thinks he can pull the wool over people’s eyes next week. But I don’t think anyone will be fooled. Working people know they are worse off after the past five years. And they know that the NHS as we know it won’t survive five more years of the Tories.

We need a better plan that puts working people first and saves our NHS. And it will take a Labour Budget to deliver it.

Posted March 13th, 2015 by Ed
March 11th, 2015

Official opening of Morley Newlands – video

Morley Newlands welcomed pupils and staff into its fantastic new building last September but the official opening finally took place on Friday with the whole school in attendance in their amazing new school hall. And what a fabulous celebration it was.

Watch my video after the opening ceremony here:

From the opening song, Everybody’s Building, to the finalé with I Can Sing a Rainbow, being sung and signed by the entire school, the Morley Newlands children were brilliant. There were robots, gymnastics, a celebration of the children’s art and great speeches from children too.

It was a real honour to formally open the school. Having the chance to open a new school is one of the best things about being a Member of Parliament. When I was Secretary of State for Children, Schools and Families, I opened dozens. But in recent years, with the cancelling of the Building Schools for the Future programme, there have been fewer school buildings built, and so opening ceremonies, like the one Newlands on Friday have become a much rarer occurrence.

The new school here in Morley is the first new school to be built in the whole of my constituency since 2010 and only the third in the whole of Leeds to have been opened since 2010.

And yet the buildings in which we educate our children are so important. Learning in a bright, modern building with state of the art facilities and energetic, motivated teachers and support staff makes a massive difference. The old Morley Newlands building was falling apart, the roof leaked, the hall was too small. And as some children said on Friday, “it smelled.”

Many of the children who sat in the Newlands School Hall on Friday will live to be 100 years old. Ensuring they make the most of the 21st century and get the chance to become the best they can be, they need world class education from their teachers delivered in world-class buildings. They now have that in this wonderful new building.

As I know from my case work here in Morley we have a massive shortage of school places in our area. And so the good news is that the new Morley Newlands school also creates many more, much-needed new school places for our town. We need more but this is a step in the right direction.

It’s a testimony to all the local leaders and councillors from all parties who have campaigned for the school that the building is now up and open. Particular thanks are due to Leeds City Council, who with their own budgets under immense pressure, found £9 million of the £10 million the new school has cost to ensure the building went ahead. At a time when there is such pressure on school places locally it’s good to see Leeds City Council putting the needs of the local community first.

Posted March 11th, 2015 by Ed
March 11th, 2015

My column in the Morley Observer

The tragic death of two local boys at the weekend has hit the town hard. Rhys and George were pupils at Bruntcliffe School and Morley Academy and had their whole lives ahead of them. It is impossible to imagine what a terrible and devastating shock this will be for their parents and loved ones. The thoughts and deepest sympathies of us all are with their families and friends.

*****

Morley Newlands welcomed pupils and staff into its fantastic new building last September but the official opening finally took place on Friday with the whole school in attendance in their amazing new school hall. And what a fabulous celebration it was.

From the opening song, Everybody’s Building, to the finalé with I Can Sing a Rainbow, being sung and signed by the entire school, the Morley Newlands children were brilliant. There were robots, gymnastics, a celebration of the children’s art and great speeches from children too.

It was a real honour to formally open the school. Having the chance to open a new school is one of the best things about being a Member of Parliament. When I was Secretary of State for Children, Schools and Families, I opened dozens. But in recent years, with the cancelling of the Building Schools for the Future programme, there have been fewer school buildings built, and so opening ceremonies, like the one Newlands on Friday have become a much rarer occurrence.

The new school here in Morley is the first new school to be built in the whole of my constituency since 2010 and only the third in the whole of Leeds to have been opened since 2010.

And yet the buildings in which we educate our children are so important. Learning in a bright, modern building with state of the art facilities and energetic, motivated teachers and support staff makes a massive difference. The old Morley Newlands building was falling apart, the roof leaked, the hall was too small. And as some children said on Friday, “it smelled.”

Many of the children who sat in the Newlands School Hall on Friday will live to be 100 years old. Ensuring they make the most of the 21st century and get the chance to become the best they can be, they need world class education from their teachers delivered in world-class buildings. They now have that in this wonderful new building.

As I know from my case work here in Morley we have a massive shortage of school places in our area. And so the good news is that the new Morley Newlands school also creates many more, much-needed new school places for our town. We need more but this is a step in the right direction.

It’s a testimony to all the local leaders and councillors from all parties who have campaigned for the school that the building is now up and open. Particular thanks are due to Leeds City Council, who with their own budgets under immense pressure, found £9 million of the £10 million the new school has cost to ensure the building went ahead. At a time when there is such pressure on school places locally it’s good to see Leeds City Council putting the needs of the local community first.

********

There are lots of brilliant play centres around. But finding really good facilities for babies and young children with a disability is quite a challenge. So big thanks to one local Morley mum.
Because this weekend Morley Childminder, Linda Holmes has opened a new facility over in Dewsbury which could end up being a life line for many local parents.

Sensory Play in Dewsbury is a café and play centre aimed specifically at babies and children with a disability. It aims to provide a safe, calm environment and has specialist play equipment designed specifically for babies and children with a disability. There are lights, sounds, interactive walls, a dark room with water bed for babies. There is also a café for parents and there will be regular groups play sessions too.

I’ve met Linda a number of times over the years and it was a pleasure to open her centre for her on Saturday. Sensory World is a fantastic new resource for parents in our area. Anyone who wants to find out more should contact Linda via their website or on 07801 065589.

Posted March 11th, 2015 by Ed
March 9th, 2015

My letter to George Osborne on the £70 billion cut risk to the NHS

Dear George,

Today Labour produced analysis showing that the Conservative Party’s spending plans for the next Parliament will mean £70 billion of cuts.

As I have just received your letter informing me that you will not now be attending Treasury Questions tomorrow, I am instead putting in writing some of my questions on your spending plans.

The Conservative Party has today failed to contest a single point of Labour’s analysis. You have instead chosen to dishonestly claim that your plans will lead to a total £30 billion of cuts when the real figure is more than double this.

Much of Labour’s analysis has been supported today by the independent Institute for Fiscal Studies. Speaking on BBC News, IFS Director Paul Johnson said:

“The reason that Ed Balls has been able to come up with a number like £70 billion-worth of cuts is because if you look at the last Autumn Statement, it does say the Government is looking for a £20-odd billion surplus by the end of the next Parliament. And the Conservatives have said they want £10 billion-worth of tax cuts. You put all of that together and it’s not very difficult to come to a world in which you are looking at £50-60-70 billion of spending cuts over that period.”

Paul Johnson, Director, Institute Fiscal Studies, BBC News, Tuesday 9 March 2015

You will have seen our step-by-step calculation to disprove your spending claims. I would now like to give you a chance to break your silence and confirm that your spending plans will mean £70 billion of cuts, by answering the following questions.

· Do you admit that your spending cuts extend over four years, not two?

· To meet your plans to have a £23 billion surplus by 2019-20, is it not the case that you will cut spending by more than the £30 billion you claim over the next Parliament?

· Do you admit that forecast rises in welfare spending mean deeper cuts to public services than your claimed £30 billion?

· Do you admit that rising capital spending means deeper cuts to day-to-day public services than your claimed £30 billion?

· If your unfunded tax cuts are brought in in 2019-20, House of Commons Library figures show they will cost £10 billion. Do you agree?

Generously assuming that the Conservative Party is able to meet your implausible claims to make £12 billion of welfare savings, your plans would still mean day-to-day spending on public services will be cut by £58 billion. Your claims to be able save £5 billion from preventing tax avoidance cannot be taken seriously given your woeful record in this area and the absence of new measures to do so.

If £58 billion of cuts were distributed evenly across all non-protected budgets (excluding schools, the NHS and ODA budgets) this would mean a cut of 35 per cent over four years for every non-protected department.

This would lead to the smallest police force since the late 1970s (the earliest available comparable data), the smallest army since Cromwell ruled Britain, and a third of older people in social care losing their entitlement to it.

These plans are so extreme and unprecedented that they are almost impossible to deliver and therefore risk you having to raise VAT again or breaking your pledge to ring-fence the NHS budget. International evidence which we have highlighted today suggests that cuts on the scale you are planning could lead to a real terms cut of £10 billion to the NHS by 2019/20.

You now owe the British people some honesty and clarity over your extreme and risky plans.

Will you proceed with £70 billion of cuts, which will have an unprecedented and deeply destructive impact on non-protected departments, or do you in fact plan to cut the NHS?

Perhaps you agree with Conservative MP Charles Walker, who when asked today whether he supported protecting the NHS budget, said, “I’m not sure that I do agree with it”. This is an increasingly popular view within the Conservative Party, with senior Tory Cabinet Ministers and backbenchers reportedly demanded that the NHS ring-fence be scrapped.

If you cannot answer, people will draw their own conclusions.

Yours sincerely,

Rt Hon Ed Balls MP
Shadow Chancellor

Posted March 9th, 2015 by Ed
March 9th, 2015

My speech on the Tories’ proposed £70 billion cuts to public spending

Thank you to Tulip, and to all of you for coming here today.

The RSA was established in 1754 by William Shipley to debate the big issues and choices facing the future of our country.

So with 59 days to go until what is set to be both the most closely fought and the most important general election of my lifetime, what better venue to talk today about the choices we face as a country?

Because be in no doubt, this election will have a decisive impact on the future direction that our country will take.

Will Britain remain in Europe, both as an open, global trading nation and a full member of the European Union and the single market, currently our number one trading partner?

Will we make the reforms necessary so that our economy both grows and delivers rising living standards for working people?

And can we stop the current and continuing rise in our national debt and balance the books in the next Parliament without putting at risk vital public services upon which both businesses and citizens depend?

Big challenges.

Questions where the parties fighting the election will sometimes disagree on the ends and certainly disagree profoundly on the means.

And challenges which are, of course, closely inter-related.

Because who can doubt that the rise of the UK Independence Party and anti-European sentiment reflects, in part, a frustration borne out of the current and continuing squeeze on living standards?

Today I want to talk about another vital election issue – how to strike the right balance between balancing the books and the future financing of our public services, given the close relationship between slow productivity, the living standards squeeze and deficit reduction.

In recent months, Ed Miliband and I have set out Labour’s tough but balanced plan on the public finances.

We will cut the deficit every year, get the current budget into surplus and the national debt falling as soon as possible in the next Parliament.

In our manifesto there will be no proposals for any new spending paid for by additional borrowing – because we will not make promises we cannot keep and cannot afford.

And we will balance the books in a fairer way – through sensible spending cuts which our Zero-Based Review continues to identify, fairer choices on tax and an economic plan that delivers the rising living standards needed to boost tax revenues and protect vital public services.

In contrast, the Chancellor announced plans in last year’s Budget – re-confirmed in the Autumn Statement – which go way beyond balancing the books and aim for an overall budget surplus of £23 billion by 2019/20.

And to deliver this goal, the Chancellor set out tax and spending plans in that Autumn Statement – the defining fiscal moment of this Parliament – which aim to take public spending back to 35 per cent of GDP.

This is a share of national income last seen in the 1930s according to the Office for Budget Responsibility – a time before there was an NHS.

Today I am going to set out why the Chancellor ended up in this place and the implications of those plans for our public services and working people across Britain.

First, the backdrop to that Autumn Statement moment.

In 2010, the Prime Minister made two key promises on the economy.

He promised there would be sustained rises in living standards.

And he pledged to balance the books in five years’ time.

Five years on it is clear that neither of those pledges have been met.

And their failure is inextricably linked.

After five years of this government working people are worse off.

As the Institute for Fiscal Studies confirmed last week, household incomes are down compared to 2010 when this government came to office.

Wages after inflation are down by more than £1,600 a year since 2010.

Households have lost £1,127 a year on average as a result of tax and benefit changes introduced by this government.

And the result is that this is set to be the first time since the 1920s that people are worse off at the end of the Parliament than they were at the beginning.

At this election, the answer to the famous Reagan question – ‘Are you better off than you were five years ago?’ – is a clear and resounding no.

Yes, our economy finally started to grow again in 2013 and officially-recorded employment figures have grown much faster than expected.

But this recovery has been characterised both by weak export growth, sluggish business investment and stagnant productivity growth and also by the enormous rise in the use of zero-hours contracts and other forms of part-time work, which reduce the unemployment figures but also help explain why wage growth has remained so weak.

All this explains too why, when asked whether they see economic recovery, most people in our country reply – yes, there may be a recovery but it is not a recovery which is working for me or my family or our community.

And this failure on productivity and living standards has led to this government’s failure on the deficit.

In this Parliament, weak earnings growth has led to tax receipts falling short.

National Insurance contributions in this Parliament have been £27 billion less than planned, while income tax revenues have fallen short by £68 billion.

This is the key reason why, far from balancing the books, borrowing is set to be £76 billion next year.

And why the government is now set to have borrowed a staggering £200 billion more than they planned in 2010.

But what was so significant about the Autumn Statement was the decision of the OBR to revise down its forecasts for tax revenues well into the next Parliament too.

As they said in December:

“We expect earnings growth to remain subdued for longer than in March. This is the key driver in the lower forecast for PAYE and NIC receipts.”

And in Table 4.10 they set out their forecast of £8.2 billion lower income tax and National Insurance receipts compared to the Budget forecast in 2016, £11.4 billion in 2017, £13.6 billion in 2018 and £15.2 billion in 2019.
Of course, while this information was announced to Parliament on 3 December, the Chancellor will have had these new and disappointing forecasts a week or two earlier.

And, while the OBR produced the forecasts, it is the Chancellor who makes the fiscal judgements.

This would have been deeply unwelcome news, a confirmation that the cost of living squeeze had thrown his fiscal plans badly off course well into the future.

But the Chancellor had a choice.

To accept reality and set out a steadier pace of deficit reduction.

To stick to his fiscal objective of an overall budget surplus and the already deep spending cuts he had set out for the next Parliament at the time of the last Budget, and seek to make up the shortfall through action to secure stronger revenue growth – by tackling tax avoidance, asking those at the very top to make a greater contribution or action to boost wages and living standards.

Or to stick to his fiscal objective of a big surplus and drive through even deeper spending cuts.

This was a genuine strategic choice. A political choice.

And the Chancellor chose the latter course:

Not only to stick doggedly to his fiscal goals, but dogmatically to seek to fill the gap caused by these lower forecasts for tax revenues entirely through even deeper spending cuts than he previously had planned.

Spending cuts which the Institute for Fiscal Studies said the day after the Autumn Statement were ‘colossal’ and suggested could require ‘a fundamental reimagining of the role of the state’.

Spending cuts which the Chairman of the OBR has said were based on policy assumptions signed off by ‘The Quad’, and therefore include the Liberal Democrats too – and which would lead to public spending as a share of GDP returning to a share of GDP last seen in the 1930s.

Of course, since the Autumn Statement the Conservatives have tried disingenuously to claim that the spending cuts they are planning for the next Parliament are not as deep or extreme as they really are.

The Prime Minister continues to claim that his plans are “reasonable, responsible and sensible”.

And a rattled George Osborne even lashed out at the BBC for reporting that the OBR had said the public spending share is projected, on his plans, to return to the level of the 1930s.

But whatever the Government’s obfuscation and diversionary tactics, it is important we get to the truth.

Because understanding the future path of public spending under the Government’s current plans is vital to:

- the credibility of their deficit reduction strategy;

- to the public services upon which people and businesses rely; and

- to the real election choice that faces the British people.

So today we are publishing our analysis of what will happen to public spending if David Cameron and George Osborne are re-elected.

And challenging them to come clean with the British people about what their plans really involve.

The analysis which we are publishing today reveals the true scale of the spending cuts that George Osborne’s plans will mean for our public services, and for unprotected spending departments if they are actually delivered.

It shows that the discretionary cuts to spending are not the £30 billion which David Cameron and George Osborne have repeatedly claimed they are, but more than double that figure.

There are five hidden factors responsible for this massive scale of spending cuts, and I want to expose them all today. All of them are based on the Treasury’s own published plans and the Tories’ stated commitments.

First, the £30 billion cut the Tories claim they are going to make after the election is not for the whole Parliament, but for the first two full years – 2016/17 and 2017/18 – only.

If we look at their own spending forecasts over the full period – up to 2019-20 – the actual minimum planned reduction in public spending is £37 billion.

But that does not take into account other areas where spending is due to rise over the next Parliament, or where commitments have been made to cut tax.

To achieve those planned spending increases and promised tax cuts, the scale of spending cuts in other areas must increase even beyond £37 billion to meet the Treasury’s targets on the deficit.

So second, we look at planned increase in spending on pensions and social security which is forecast to rise from £218 billion in 2015-16 to £241 billion in 2019-20.

That takes the scale of the cuts required in other areas to £55 billion.

Third, capital spending is also forecast to rise. That will require even bigger cuts to day-to-day spending to meet the Chancellor’s deficit target, taking the total up to £59 billon.

A figure confirmed by the IFS in their 2015 Green Budget.

Fourth, the commitment to maintain spending on Overseas Development Assistance (ODA) at 0.7 per cent of Gross National Income adds a further £1 billion to the cuts required elsewhere, because – to maintain that commitment – ODA spending must rise slightly faster than inflation.

Fifth and finally, the Tories have also committed to make a number of tax cuts at some stage over the next Parliament.

Unlike Labour’s plans, these Tory tax promises are totally unfunded and they have not specified when these will come in.

The only stipulation the Tories have made is that, in order not to disrupt the Treasury’s stated plans on the deficit, they should be paid for from additional cuts in spending.

Our calculations take the cautious assumption that they will be introduced in the final full year of the next Parliament.

That would cost £10 billion a year according to the House of Commons Library.

Putting these five hidden factors together, we can see that – in order to keep all their commitments on spending, tax and the deficit – the Tories would in the next five years need to make spending cuts which add up to a staggering total of £70 billion.

The scale of these £70 billion of cuts is unprecedented.

The OBR has already said they would take us back to public spending as a share of GDP last seen in the 1930s – a time before there was even a National Health Service.

While the IFS have said this would take “total government spending to its lowest level as a proportion of national income since before the last war.”

And the analysis we are publishing today shows Tory plans mean:

Spending cuts larger in the next four years than in the last five years – we are not even half way through the cuts the Tories are planning.
Spending cuts which are larger than any time in post-war history – a bigger fall in spending as a share of GDP than in any four year period since demobilisation at the end of the Second World War.

Spending cuts which are larger than any other advanced economy in the world.

More extreme than in this Parliament, the most extreme in post-war history and the most extreme internationally.

And today we are also publishing an analysis of what these unprecedented spending cuts would mean in departments the Conservatives have not said they are ring-fencing.

The only area in which George Osborne has given any indication of the scale of expected cuts is to the welfare budget.

He says there will be further cuts in benefits and tax credits of £12 billion, even though he has only spelt out where £3 billion of those cuts will come, and has singularly failed to meet his existing targets for the reduction of welfare spending in this Parliament.

Nevertheless, let us take him at his word and assume that £12 billion of the £70 billion cuts come from that area. That leaves £58 billion to be cut from other areas which the Conservatives have left unprotected.

You might think it is a reasonable assumption that these cuts will be applied across departments in roughly the same proportions as they have so far applied in this Parliament.

However, if each department were to get the same share of these £58 billion of cuts as they had done in this Parliament it would mean key government departments would be virtually eradicated – a total of three would cease to exist, insofar as their day-to-day budgets are concerned.

The Foreign and Commonwealth Office, the Department for Work and Pensions and the Department of Transport would actually have no day-to-day budgets left at all while others such as DCLG would almost cease to exist.

For example, the FCO budget is currently £1.2 billion a year. In this parliament it has had three per cent of the cuts to departments. Repeating this again based on £58 billion would mean a cut of £2 billion. The FCO would disappear.

Cuts on this scale would mean closing our embassies around the world, closing down all job centres and back to work programmes and all but ending central government’s funding for local government.

This is clearly impossible to countenance.

So we have instead applied the £58 billion of Conservative spending cuts to non-protected areas equally.

This would mean a cut of 35 per cent to non-protected areas between 2015-16 and 2019-20.

And our analysis shows this would mean:

At a time when the terror threat is increasing and child protection under great pressure, huge cuts in the Home Office Budget, the equivalent of 29,900 police officers and 6,700 PCSOs lost.

Under these deeply risky plans the Tories would have cut police numbers by a third since 2010 and would take the overall numbers of police below 100,000 – well below the smallest force since comparable records began.

At a time when there is such instability on Russia’s borders, the Middle East is in turmoil and the Jihadist threat from Africa is growing, huge cuts in the defence budget – the equivalent of 34,500 fewer soldiers in the Army, and 60,800 fewer personnel in the Armed Forces. This would be our smallest Army since Cromwell and the smallest Armed Forces since 1750.

At a time when huge pressures on social care are already having a knock-on impact on our NHS, these 1930s Tory spending plans would mean further deep cuts in the social care budget too.

Our analysis shows these extreme cuts would be the equivalent to over a third of the older people receiving social care losing their entitlement to it.

This would mean eligibility to care services further restricted, meaning hundreds of thousands of vulnerable older people missing out.

It would mean even more elderly people trapped in expensive hospital beds when they don’t need to be. And it would mean even more elderly people turning to A&E because they are unable to access the care and support they need.

No wonder that the Institute for Fiscal Studies has said these cuts are “colossal” and questioned whether they could be delivered without “a fundamental reimagining of the role of the state”.

So this is the implication of the choice that George Osborne made last December – and which he is now trying to brush under the carpet.

If he is to deliver on his Autumn Statement plans for a £23 billion overall budget surplus, as he says, through a Budget with no fiscal loosening, while promising unfunded tax cuts in the next Parliament, then he is going to have to deliver these colossal cuts, which would lead to:
- the smallest police force since comparable records began;

- the smallest army since Cromwell; and

- over a third of older people receiving social care losing their entitlement to it.

An unprecedented £70 billion of spending cuts which would be deeply destructive and close to impossible, even for this Chancellor.

So George Osborne must surely have an alternative plan in his back pocket.

One possibility is that the Chancellor is planning a further rise in VAT.

After all, before the last election he and David Cameron claimed they had “absolutely no plans to raise VAT”.

And then they raised it in the first Budget to 20 per cent.

So one option is that, in the face of cuts to policing, defence and social care which many will see as totally undeliverable, even by this Chancellor, that David Cameron and George Osborne are planning a further VAT hike.

When we asked the Chancellor this question in January, he replied:

“Our plans do not involve a VAT increase”.

I do not think the British people will be fooled by that one again.

But there is a second alternative available to the Chancellor.

The plans set out in the Autumn Statement represent a reduction of 3.8 per cent of public services spending as a share of GDP. The National Health Service currently accounts for a third of total public services spending.

The analysis we are publishing today shows that across the OECD, there have been only seven countries since 1945 where reductions on this scale have been attempted and for which we have available health spending data.

And across these examples, public spending on health care has been cut – on average by one per cent of GDP.

If the average experience of these past fiscal consolidations were to be replicated in the UK over the coming four years of the next Parliament, then this would imply a real terms cut in NHS spending of over £10 billion by 2019-20.

And as we highlighted last month, the international evidence shows that countries with total government expenditure at 35 per cent or below are far more likely to charge for health services than the UK.

In the UK, out-of-pocket expenditure on public healthcare currently represents 10 per cent of total expenditure on health.

For OECD countries with public spending at 35 per cent of GDP or below, the average level of out-of-pocket expenditure as a proportion of total expenditure on health is 35 per cent – more than three times the UK level.

So the evidence is clear – countries which reduce public spending at the pace George Osborne intends have found they have had no alternative but to cut health spending.

And those who have reduced public spending to the levels that George Osborne is seeking have health systems where charging for services is triple the share here.

This shouldn’t be a surprise. When George Osborne’s plan means such extreme cuts to day to day departmental budgets it’s common sense that the NHS, which makes up a full third of the £317bn spent in those budgets, ends up footing the bill.

Even though our NHS is currently under great financial pressure, the international evidence which we set out in our document today suggests that the NHS will end up paying the price if George Osborne pursues his extreme planned spending cuts.

With the Conservatives planning cuts to day to day spending in the next Parliament more than double the level they claim – an unprecedented £70 billion of spending cuts which would be deeply destructive and close to impossible, even for this Chancellor – there is a real risk that the Chancellor will be forced to bear his promise to ring-fence the NHS.

And after their broken pledge not to have a top-down re-organisation of the NHS in this Parliament, the British people know that the Tories have form when it comes to broken promises on the NHS.
So this is the choice George Osborne must make if he is to stick to his fiscal plans – to raise VAT or to make his deep spending cuts add up by cutting NHS spending.

But it doesn’t have to be this way.

While the Tories have extreme and risky plans – an ideological second-term Conservative project to shrink the state which go far beyond the necessary task of deficit reduction.

And while some other parties say we do not need to get the deficit down

Labour has a better, different, fairer and more balanced plan which means we are the centre-ground party in British politics today.

We will cut the deficit every year and balance the books – with a surplus on the current budget and national debt as a share of GDP falling, as soon as possible in the next Parliament.

How fast we can go will depend on the state of the economy, including what happens to wages, growth, the housing benefit bill and events around the world.

Unlike the Tories we will make no unfunded commitments. And we want the OBR to be allowed to audit manifesto spending and tax commitments.

Our fairer and more balanced approach is very different to the Tories’.

First, there will need to be sensible spending cuts in non-protected areas. For example, we will cut winter fuel payments from the richest five per cent of pensioners and cap child benefit at one per cent for two years.

And our Zero-Based Review of every pound spent by government is identifying savings and cutting out waste and inefficiencies – so we can safeguard vital public services upon which people and businesses depend.

We have already published eight interim reports which identify savings including:

- £250 million in the policing budget, including from scrapping elected Police and Crime Commissioners and reforming police procurement through mandatory joint purchasing of equipment by police forces;
- £500 million a year in the Communities and Local Government budget through shared services, back-office collaboration, and streamlining;
- over £70 million of annual savings in the courts budget including, co-locating county courts and magistrates courts and scrapping the use of the 15 High Court judges’ lodgings;
- £230 million saved by cutting back on the wasteful expenditure related to the Government’s Free Schools and Academies programmes; and

- £60 million of efficiencies in the defence budget by bringing down the numbers of the armed forces top brass to sensible levels, better managing inventory, and improving defence procurement.

Second, we will also make fairer choices: reversing this government’s £3 billion a year tax cut for the top one per cent of earners and introducing a Mansion Tax on properties over £2 million to help save and transform our National Health Service.

And third, our plan will deliver the rising living standards and stronger growth needed to balance the books. So we will:

- Increase the minimum wage to £8 an hour before 2020 and give tax breaks to firms who start paying the living wage;

- Cut business rates for small business properties;

- Establish a British Investment Bank to boost lending for small and medium-sized businesses to grow and create jobs;

- Make work pay by expanding free childcare for working parents and introducing a lower 10p starting rate of income tax to help 24 million working people;

- Get at least 200,000 new homes built a year to relieve Britain’s housing crisis;

- Secure Britain’s place in a reformed European Union and boost exports;

- Set up an independent National Infrastructure Commission in order to stop long-term decisions being kicked into the long grass;

- Devolve £30 billion of economic power and funding to city and county regions;

- Ban exploitative zero-hour contracts to ensure that workers who work regular hours get a regular contract; and

- Introduce a Compulsory Jobs Guarantee, paid for by a bank bonus tax, to provide a paid starter job for everyone young person unemployed for over a year which they will have to take up or lose benefits

A better plan for more good jobs and more balanced growth.

Because OBR figures show that if our economy was not to slow down this year but instead grew by half a per cent a year faster than forecast over the next Parliament, government borrowing would be over £32 billion lower in the next Parliament.

And our calculations show that if wages grew in the next Parliament in line with their historic average, tax receipts would be £12 billion higher.

Decisive action to strengthen growth, increase productivity and get sustained rises in living standards is the only way to balance the books fairly in the next Parliament and safeguard vital public services.

So the choice for the British people is now clear:

A tough, but balanced and fair plan to deliver rising living standards and get the deficit down with Labour

Or an extreme and risky plan under the Tories for bigger spending cuts in the next four years than the last five years which would cause huge damage to our public services and put our NHS at risk.

And the Tories now have a choice too.

They can either say that these unprecedented, extreme and close to impossible cuts to our police, armed forces and social care are the true consequences of their spending plans.

Or they can confess that their plans are in fact impossible to achieve without breaking their promise to protect the NHS.

If David Cameron and George Osborne cannot spell out how their sums add up for non-protected departments in order to achieve their fiscal surplus, the British people can only conclude – and would be right to conclude – that alternative plans do exist: to cut NHS spending and introduce charging.

David Cameron and George Osborne must come clean or the British people will draw their own conclusions.

And then, in May, they will make their choice.

Thank you

Posted March 9th, 2015 by Ed
March 9th, 2015

A tragic loss for Morley

The sad death of two local boys at the weekend is a tragedy for the town. Rhys and George were pupils at Bruntcliffe School and Morley Academy and had their whole lives ahead of them.

The thoughts of us all are with their families and friends as they try to come to term with what has happened.

Posted March 9th, 2015 by Ed
March 7th, 2015

Video of the Sensory World opening with Paula Sheriff in Dewsbury

There are lots of brilliant play centres around. But finding really good facilities for babies and young children with a disability is quite a challenge. So big thanks to one local Morley mum.

This weekend Morley Childminder, Linda Holmes has opened a new facility over in Dewsbury which could end up being a life line for many local parents. You can watch the opening, including Linda’s brilliant speech here:


Sensory Play in Dewsbury is a café and play centre aimed specifically at babies and children with a disability. It aims to provide a safe, calm environment and has specialist play equipment designed specifically for babies and children with a disability. There are lights, sounds, interactive walls, a dark room with water bed for babies. There is also a café for parents and there will be regular groups play sessions too.

I’ve met Linda a number of times over the years and it was a pleasure to open her centre for her on Saturday. Sensory World is a fantastic new resource for parents in our area. Anyone who wants to find out more should contact Linda via their website or on 07801 065589.

Posted March 7th, 2015 by Ed
March 4th, 2015

Ed’s response to George Osborne’s interview on the Today programme

Ed Balls MP, Labour’s Shadow Chancellor, responding to George Osborne’s interview on the Today programme, when he six times refused to answer questions on Lord Green, said:

“George Osborne was asked six times whether he discussed allegations of tax evasion at HSBC with Lord Green, the bank’s former chairman, and six times he refused to answer.

“What has George Osborne got to hide? People will draw their own conclusions from his total failure to answer.

“The Chancellor also struggled to explain why, since the government received these files in May 2010, only one person has been prosecuted out of 1100 names.

“David Cameron and George Osborne must now come clean about their discussions with Lord Green – both while he was a Tory Minister and before they appointed him.”

Ends

Posted March 4th, 2015 by Ed
March 3rd, 2015

Ed’s comments at the London First event on London’s economy and infrastructure

Speaking at a London First event on London’s economy and infrastructure, Ed said:

“It is vital that we rebalance our economy and make sure the recovery reaches every part of the country. We need to ensure all working people start to feel some benefit from economic recovery.

“That’s why our plan will devolve more economic power and funding to city and county regions across England, so that they can drive growth, invest for the future and create more good jobs.

“But we neglect the importance of London’s economy at our peril. It’s where almost one in five jobs and businesses in the UK are located.

“As an MP in Yorkshire I am clear that we need London to be a successful global city if we are going to be a successful country. The whole of Britain benefits from London’s growth and dynamism. We should have no truck with the argument that if the rest of the country is to get more jobs and investment then London needs to be less successful. It’s not a zero-sum game.

“But for London to continue succeeding as a global city I believe we need to remain engaged in Europe. London’s professional and financial services, advanced manufacturing and creative industries depends on our access to the European single market.

“Walking out of the EU would be a disaster for London. It would put our capital’s future success at risk – costing us jobs and trade, investment and influence.

“Britain exiting the EU is now the biggest risk to London’s prosperity in the coming years. I don’t see how any Mayor of London could ever advocate us leaving Europe if they were really putting the interests of this great city first.

“While many parts of our capital’s economy have gone from strength to strength, London has certainly not been immune from the squeeze on living standards in the last few years.

“Far from it. The cost-of-living crisis has affected millions in our capital, with working people on average over £3,200 a year worse off since 2010. That’s the biggest fall in real wages of any region of the country. And it has been exacerbated by high and rising housing costs – for renters and buyers alike.

“We won’t solve this living standards crisis in London without building many more homes which Londoners can afford to buy. That’s why I’m clear house-building will be a top priority for a Labour Treasury. We have an ambitious plan to build 200,000 more homes a year – and many of those will need to be in London.

“Too often as a country we have dithered and delayed on the big decisions we need to take for the future.

“Just look at airport capacity in London and the south east. This government kicked that decision into the long-grass by setting a timetable for the Davies review to report after the election. It should have reported before now.

“It’s a vital issue for London’s economy, yet the Chancellor and the Mayor somehow launched an economic plan for London last month which didn’t mention airports once. That is the opposite of a long-term approach – a simply staggering omission.

“As I said last year, the next Labour government will make a swift decision on expanding airport capacity following the Davies review and taking into account environmental concerns.

“And we need to grasp the nettle on other big infrastructure decisions too. That’s why, following the report by the Chair of the Olympic Delivery Authority Sir John Armitt, we will establish an independent National Infrastructure Commission.

“That Commission will help us identify the infrastructure needs of every region of our economy over the next 25-40 years and ensure government comes up with plans to meet them.

“And with London’s population set to grow over that time, the Commission will clearly need to ensure that London’s infrastructure, including our transport system, is fit for purpose.

“Crossrail is a big step forward and plans for Crossrail 2 are already underway. But our Commission will also need to assess what more we may need to do to ensure our capital’s transport infrastructure can cope as London continues to grow‎ and prosper.”

ENDS

Posted March 3rd, 2015 by Ed's team