Ed Balls will set out Labour’s stall on the economy today in a headline speech at the party’s annual conference in Manchester.
The shadow chancellor will promise a five per cent pay cut for all government ministers, as well as a plan to continue the one per cent cap on child benefit payment increases for the first two years of the next parliament if his party is elected in May.
Labour hoped to save around £400m by doing so, Balls added, warning that it would be forced to take unpopular decisions to balance the books.
“While our economy is growing again, most working people are still not seeing any benefit from the recovery,” Balls will say, adding: “We will get the current budget into surplus and the national debt falling as soon as possible in the next parliament… Ed Miliband and all my shadow cabinet colleagues are clear it will mean cuts and tough decisions and we will take the lead.”
Balls is expected to use his speech to set the tone for Labour’s campaign on the economy, warning he will not shy away from difficult financial decisions in the hope that he can regain some political ground. The Conservatives have accused Miliband’s party of lacking economic credibility and David Cameron and George Osborne frequently top opinion polls when it comes to who is more trustworthy with the nation’s finances.
Last night, Conservative MP Priti Patel, exchequer secretary to the Treasury, said: “This speech isn’t a serious plan for the economy – Labour would put the deficit up, not down. These savings on ministerial pay only cut a minuscule fraction of the deficit – less than one per cent of one per cent,” adding: “For all his bluster, Ed Balls still refuses to admit that Labour spent too much.”
A Labour spokesman said the curbs on ministerial pay could raise around £300,000 in the first year and are intended as a symbol that ministers must work hard to cut the deficit and that everyone must bear the load.