Ryan Bourne, Economic Researcher at the Centre for Policy Studies, gives his reaction to Shadow Chancellor Ed Balls' speech at the Labour Party Conference 2011.
“Whilst Ed Balls is right to state that stronger economic growth is required to eliminate the deficit, his speech today underestimated the value of a credible plan for debt interest repayment costs. His ‘five point plan,’ entailing lowering VAT and bringing forward infrastructure investment, would seriously throw into question the Government’s commitment to maintaining the public finances, particularly after the high borrowing in August. Instead, he should have focused on the lack of a coherent growth strategy across Government – highlighting targeted tax cuts and deregulatory policies that the Government could make to enhance the UK’s competitiveness and reduce the cost of employment.
His plans for more fiscal discipline under a future Labour government are welcome, as is the commitment to use bank share receipts to pay down the national debt. But voters will hear echoes of Gordon Brown’s ‘Golden Rule,’ and are unlikely to take Labour seriously on the economy until a credible, costed alternative is presented which shows what spending and tax decisions a Labour government would have made to halve the deficit across this Parliament. You can only spend the proceeds of a populist bank bonus tax so many times.”