Ed Miliband and Ed Balls set out Labour Budget demands

Watch: Ed Balls urged Chancellor George Osborne to bolster "faltering growth"

Labour leader Ed Miliband has called for a fresh tax on bank bonuses and a cut in VAT on petrol.

He and shadow chancellor Ed Balls outlined the measures they said would best grow the economy, ahead of the government's Budget next week.

They called for more private sector jobs and for help for the young unemployed and construction industry.

The Conservatives say Labour have made £12bn of unfunded spending commitments in the last four weeks.

At a press conference, Mr Miliband and Mr Balls said last year's windfall tax on bankers' bonuses had raised £3.5bn, and a repeat would help promote growth.

They called for the VAT rise - from 17.5% to 20% - to be reversed on petrol as prices top £1.30 a litre, a measure they say can be funded by extra income from the bank levy.

Analysis

For all the rival claims and counter claims over the deficit there is also a broad symmetry between the opposition and the government ahead of next week's Budget.

Labour want the Budget to be judged by how far it promotes growth and eases the pressure on the so called "squeezed middle".

The coalition too would probably accept those benchmarks.

Hence, the prime minister and the chancellor have repeatedly dubbed this as "a Budget for growth", and Nick Clegg has identified the need to help what he calls "alarm clock Britain".

While on cuts, David Cameron has himself acknowledged the difference between Labour and the coalition over the scale of cuts is only £2bn this year.

The difference between the two parties over the economy is real - but it is essentially one of degree.

Mr Miliband said Labour's plans could create another 110,000 jobs.

Mr Miliband said: "As a matter of simple fairness, at a time when everyone else is facing tax rises, it is completely wrong for this Tory-led government to choose to cut taxes for the banks.

"The banks, who helped create the financial crisis, must now help return our economy to growth."

Mr Miliband said: "We are under no illusions that at this stage the government will abandon their deficit reduction plan - they are too dug in for that.

"But at least they should take some steps to deal with faltering growth in our economy - to establish a plan to create jobs in the private sector... to deal with the crisis of youth unemployment in our country and build the skills we need for the future."

Mr Balls urged Chancellor George Osborne to "err on the side of caution" with spending cuts, so that the government is better placed to deal with economic emergencies.

He added: "In past Budgets, when world oil prices were high, governments took the decision to cancel or postpone duty rises.

"That's a decision for George Osborne to take next week, but we are asking him to act now for hard-pressed motorists."

But Labour's economic credibility is being questioned by the Conservatives.

The Conservatives argue Labour has made £12bn of unfunded spending commitments in the last month, including cancelling a planned fuel duty rise in 2011-12, restoring Education Maintenance Allowance and reversing the VAT increase on fuel.

Treasury Minister Justine Greening said: "They seem to be in continued denial about the fact that the deficit even exists. There is a ginormous gaping hole in the Labour Party's fiscal plans and in their credibility."

She added that a repeat tax on bankers' bonuses would raise less overall than the government's permanent bank levy: "Even their last Labour chancellor, Alistair Darling, said he thought it was ineffective because of people's ability to avoid it. It would bring in less than the bank levy, which Labour has opposed. Their arguments don't stack up."

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