Labour’s Ed Balls has insisted it would be “irresponsible” to commit to reversing coalition spending cuts and tax rises without knowing the state of the economy in four years’ time.
The shadow chancellor will try to restore his party’s reputation on the economy during the Labour Party Conference in Liverpool. Balls is refusing to make any promises without knowing the condition of the economy he could inherit as chancellor should Labour win the next general election.
Balls also said he would use money raised from the sale of publicly-owned shares in Lloyds and RBS banks to reduce the deficit and he dismissed the Liberal Democrats’ plans to use the cash to fund a pre-election give-away.
“It is not possible for us now, in opposition, with responsibility, to say four years out from an election, to promise to reverse tax rises here or spending cuts there,” said Balls, speaking on BBC1’s Breakfast programme.
“Even though they are unpopular, I can’t do that because it’s irresponsible, because I can’t say what the state of the economy will be and what the level of borrowing will be,” he said. “And I’m worried, because their plans aren’t working for them, it’s going to be higher than expected, not lower.
“The disciplined thing to do is say we will make our commitments when we know the situation.”
The Conservatives have accused Balls of lacking credibility on the economy because he was an influential member of Gordon Brown’s cabinet and key adviser before he became a minister. The shadow chancellor’s position is designed to counter these claims, but he risks clashing with Labour members and unions who are against cuts to public services.
“If they can make a profit on the sale of bank shares which are owned by the public at the moment, we should not, as Nick Clegg and Vince Cable have said, use that for a give-away,” said Balls. “Use the bank shares to repay the national debt. That’s the responsible thing to do.”
Balls is to warn of a “lost decade of economic stagnation” unless the economy returns to growth when he addresses the conference for the first time as shadow chancellor.
The MP for Morley and Outwood will claim chancellor George Osborne and prime minister David Cameron are “getting the economy badly wrong”. He will repeat his message that they have cut too hard and too fast since they came to power in May last year and are choking off a fragile recovery.