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Published: Sunday 29th March 2015 by The News Editor
Labour is not expecting to unveil any further plans ahead of the May 7 general election for cuts to meet its promise of balancing the current budget by the end of the next Parliament, campaign chairman Douglas Alexander has indicated.
Mr Alexander said the party would fight the election on the “three-pronged” plan it has already set out to increase taxes on the richest, cut unprotected areas of Whitehall spending and boost tax revenues by supporting the incomes of ordinary working people.
Asked if Labour will be making any more substantial promises on cuts during the election campaign, Mr Alexander told the BBC’s Andrew Marr Show: “We’ve set out our agenda and that’s the programme on which we will fight the election.”
Conservatives said his failure to spell out further details of where Labour would cut spending or increase taxes meant that the party’s economic policies were “not credible”.
Business minister Matt Hancock warned that “a vote for Labour is a vote for higher taxes”.
Meanwhile, Labour campaign vice-chairwoman Lucy Powell said she did not recognise figures suggesting that the party’s plans would mean continued state borrowing of up to £30 billion by 2020 – when the Conservatives aim to be running a surplus of £7 billion.
Institute for Fiscal Studies director Paul Johnson told the Marr Show it was unclear how much Labour would cut, but added: “They don’t want to get rid of the deficit altogether, they are happy to borrow to invest. They would be happy with a deficit of £25-30 billion, whereas the Conservatives don’t want a deficit at all.”
Asked to confirm the £30 billion figure, Ms Powell told the BBC’s Sunday Politics: “We are going to balance the books for current expenditure by the end of the Parliament. We may use some investment borrowing for much-needed investment but not for day-to-day spending.
“Those figures are other people’s figures. It depends on what the books are like.”
In a tetchy exchange, Ms Powell repeatedly complained of being interrupted, telling presenter Andrew Neil he was trying to conduct a “Paxo-style interview” and adding: “You’re not listening to what I’m saying … If you would just allow me to speak, Andrew – this is really annoying.”
After Mr Neil challenged her claim that there had been an “explosion” in zero-hours contracts under the coalition government, she told him that this was the case “in the real world where I live, unlike where you live and many other people in the media and the Tories”, earning the retort: “You have no idea where I live. Answer the question.”
Ms Powell said that savings identified in Labour’s zero-based review of Whitehall spending would reduce government expenditure by more than £1 billion, but was unable to put a precise figure on their value.
Citing plans to scrap winter fuel payments for wealthier pensioners and impose a 1% cap on child benefit rises, she said: “We’ve set out a number of cuts. We will obviously have to see what the books are like when we get into government.”
Asked whether the party was planning any other increases to existing taxes, beyond the restoration of the 50p top rate of income tax, she said: “That is the only tax we have set out that we will be increasing.”
Ms Powell said that a significant factor in the coalition’s failure to eliminate the deficit during the 2010 Parliament was the growing reliance of working people on welfare handouts such as housing benefits and tax credits, because of low pay and zero-hours contracts.
Despite “nasty, nasty” benefit cuts under the coalition, the welfare bill was £25 billion higher than planned, with a 60% increase in working people claiming housing benefit, she said.
Mr Alexander insisted that Labour’s decision to sign up to a Charter of Budget Responsibility, committing the government to eliminate the deficit on a rolling three-year timetable, left the party with room to ensure that cuts are not so deep as those planned by the Tories.
“If you recognise you need to get the current budget in balance, that does not imply what the Tories are doing, which is deeper cuts over the next three years than we’ve had over the last five years,” he said.
“We have differentiated between capital expenditure and day-to-day expenditure, because we recognise it is necessary to remove waste in government, but on the other hand continue to invest in the drivers of growth. If we don’t have capital expenditure then we will have the kind of low growth we’ve seen over this Parliament.”
Commenting on Mr Alexander’s remarks, Mr Hancock said: “Labour have committed to £30 billion of deficit reduction, but are now in the ridiculous position of trying to rule out both spending cuts and tax rises.
“Their sums just don’t add up – their economic policy is in total chaos. It’s not credible – and they now need to come clean about which taxes they are going to raise on hardworking taxpayers.
“Their plans are in such chaos that anything is on the table if Ed Miliband gets into Downing Street. The last Labour government clobbered ordinary families with higher taxes last time and it’s clear Ed Miliband has learned nothing from their past mistakes – a vote for Labour is a vote for higher taxes.”
Published: Sunday 29th March 2015 by The News Editor