Labour pledges 'ruthless' post-election spending review

Ed Balls Mr Balls said he hopes to reach a cross-party consensus on the funding of social care

Labour will review the purpose and value of all public spending if it wins the next general election, shadow chancellor Ed Balls has said.

In an interview with the Guardian, Mr Balls said voters wanted the party to be "ruthless and disciplined".

The review would be conducted within a year of a Labour government coming to power, he added.

But a Tory Treasury minister said Mr Balls still stood for "more spending, more borrowing and more debt".

Speaking ahead of Labour's annual conference in Manchester, Mr Balls told The Guardian: "The public want to know that we are going to be ruthless and disciplined in how we go about public spending.

Analysis

Ed Balls' ideas will be seen as Labour's latest attempt to be seen as economically credible.

Economic credibility will be the front line of the next general election campaign.

This presents a two-pronged challenge for Labour: answering those critics who blame the party for the country's current parlous economic state, and answering those who ponder what a centre-left party is for when there isn't much money about.

Those around Chancellor George Osborne are dismissing Labour's ideas. One source said Ed Balls was "a man with a past" who was part of a government "that left our public finances the worst in the Western world".

"For a Labour government in 2015, it is quite right, and the public I think would expect this, to have a proper zero-based spending review where we say we have to justify every penny and make sure we are spending in the right way," he told the newspaper.

The "zero-based" approach would entail looking at budgets from scratch, rather than just the amount by which individual departmental budgets rise or are squeezed each year.

This process, Mr Balls said, would allow the government "to test spending not on the basis of whether it is easy to slash, but whether it meets your priorities".

And it would force a new government to "look radically at public spending" and "face up to some big strategic questions in public spending" - something he claims the coalition has failed to do.

"It is something that governments have not done enough in the past."

The shadow chancellor told the Guardian the review would be subject to a number of qualifications such as allowing the party to fulfil commitments set out in its election manifesto.

He said: "We will need to make decisions in our manifesto on our big strategy on taxation and spending, as well as our fiscal rules. As in past parliaments, that could mean we make overall commitments on some items of spending.

"For example there is a cross-party consensus on spending on international development. But that does not mean the DfID budget is taken out of the zero budget review - you still need to know the money is being spent wisely."

The review would examine whether particular cuts now would be likely to lead to higher costs later.

He also added that he hoped a cross-party consensus could be reached on some contentious areas of public spending, such as the funding of social care.

Economic Secretary to the Treasury Sajid Javid said: "Nobody will be fooled by this transparent attempt to distract from Labour's total lack of credibility on spending.

"Ed Balls hasn't learnt from the mistakes he made in government. Labour still stand for more spending, more borrowing and more debt."

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