Ed Balls on Labour's spending plans: We would scrap winter fuel payouts for rich pensioners

Shadow chancellor says Labour would axe grant for 600,000 better off pensioners

The Coalition’s spending limits will be the “starting point” for Labour if it wins the 2015 general election, Ed Balls announced today as he launched a drive to boost his party’s economic credibility.

The shadow Chancellor’s statement committed Labour to continuing the present Government’s spending cuts.  In an important speech, he set out for the first time a hitlist of possible Labour cuts including an end to the building of new free schools and huge prisons; industry footing more of the bill for its regulatory bodies; scrapping police commissioners; axeing “top brass” senior officers’ posts in the Army and Royal Navy; abolishing overlapping agencies such as those which oversee fire and police forces; slimming down the four bodies responsible for motorists and handing responsibility for the High Speed 2 project to Network Rail rather than a new company.

Mr Balls confirmed that Labour would axe winter fuel payments for 600,000 better off pensioners, a highly symbolic move because it calls into question the party’s long-standing support for universal benefits.

He said that Ed Miliband would reveal later this week Labour’s plans for “a fair cap on household benefits” which took account of housing costs in different parts of the country – with an independent body, like the Low Pay Commission, advising on whether the cap should be higher in high-cost housing areas like London. This will be seen as an attempt to match George Osborne’s £26,000-a-year benefits cap for each family.

The shadow Chancellor said Labour would complete a root-and-branch “zero-based” spending review during its first year in office.   Answering questions following his London speech, Mr Balls bluntly told Shadow Cabinet colleagues not to come to him with ideas for extra spending but to produce proposals to “reprioritise” budgets. In other words, higher spending  would need to be funded by cuts elsewhere.

However, Mr Balls stopped short of promising that an incoming Labour Government would stick within the Coalition’s budget ceiling for 2015-16, to be announced by Mr Osborne in a spending review on June 26.  He left himself room to increase borrowing to fund projects such as housebuilding to boost economic growth.

Accusing the Chancellor of setting a “political trap” for Labour, he said it would not be responsible to commit to stick within these limits two years ahead. “We will not play that game – when we do not know the economic circumstances two months ahead, let alone two years,” he said.

Mr Balls added: “With the Chancellor refusing to change course, Labour must start planning now for what will be a difficult and tough inheritance in 2015. It will require us to govern in a very different way with much less money around. We will need an iron discipline and a relentless focus on our priorities.”

Without revealing the detail, he promised that Labour’s election manifesto in 2015 would include “tough fiscal rules that the next Labour government will have to stick to - to get our country's current budget back to balance and national debt on a downward path.  Tough rules, which will be independently monitored by the Office for Budget Responsibility. A clear and balanced plan to support growth, alongside a clear timetable to get the deficit and the debt down - finishing the job where this Government has failed.”

Pensioners groups reacted angrily to Labour’s pledge to curb winter fuel payments.  Dot Gibson, general secretary of the National Pensioners’ Convention,  said: “This announcement clearly isn’t about economics – it’s about politics. The scheme would raise just £100m out of a welfare budget of over £155bn, but if

Labour really wanted to tackle inequality and unfairness in Britain, they could commit themselves to reinstating the 5 per cent  [income] tax reduction that the super rich – including pensioners - got this year.”

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
News
people
News
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want for the fitness tech, or the style
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own