UK Politics

Spending Review: Labour urges 'bold action' on growth not 'more of the same'

Shadow chancellor Ed Balls
Image caption Ed Balls said welfare bills were "soaring"

Labour has said George Osborne's Spending Review represents "more of the same" from a "failing" government.

Speaking in the Commons, shadow chancellor Ed Balls said the package would do nothing to ease the squeeze on living standards or to drive growth.

Planned cuts to the police, councils and defence were the result of the "abject failure" of the coalition's economic policy, he told MPs.

Mr Osborne announced cuts of £11.5bn in departmental budgets for 2015-16.

Among other measures, he announced an end to automatic pay rises to millions of public sector workers, a cap on total welfare spending and requirements for most unemployed people to visit the job centre every week instead of fortnightly.

The opposition has no plans to reverse the chancellor's package of spending cuts if they gain power at the next election in 2015, arguing this is the "responsible" position as it does not currently know what the public finances will look like.

'Comprehensive failure'

But Mr Balls said the fact that the chancellor was having to announce additional cuts on top of the £83bn already planned for 2011-15 illustrated the government's failure to get on top of the deficit.

Rather than balancing the books by 2015, the chancellor would be borrowing £96bn to "pay for economic failure".

"The chancellor spoke for over 50 minutes, but not once did he mention the real reason for this Spending Review today - his comprehensive failure on living standards, growth and on the deficit too," he said.

He pressed the chancellor for more detail on what services would be cut, saying by 2015 the coalition would already have presided over a 15,000 drop in the number of police officers, 4,000 fewer nurses and the closure of 500 Sure Start children's centres.

Instead, Mr Balls called for "bold action" to boost the economy, including £10bn in infrastructure investment this year, more money for house building and a tax on bank bonuses to pay for support to get young people into work.

He also reiterated Labour's call for the wealthiest pensioners to lose their winter fuel allowance, although he did not say whether he would back the coalition's move to stop paying the benefit to expats living in warmer climates in Europe.

Although Labour has said it would also introduce a cap on aspects of benefits spending after 2015, Mr Balls accused his counterpart of "divisive rhetoric" rather than action over controlling welfare costs.

"On this chancellor's watch, the benefits bill is soaring," he said.

"Social security spending is up £21bn compared to their plans. The fact is the chancellor already tried to set a cap with his plans for social security spending in 2010. And he's overspent it by £21bn."

But the BBC's chief political correspondent Norman Smith said he understood that Labour would not oppose many of the welfare changes set out by ministers, aware that the chancellor was setting a "bear trap" for them.