Balls slams Osborne’s ‘unemployment budget’

By Alex Smith / @alexsmith1982

Ed Balls has written a pre-emptive attack article on the Tories’ apparent plans to raise VAT in the forthcoming budget next week. Writing in the Telegraph tomorrow, Balls will say:

“Over 13 years, Labour made many big decisions on tax and spending: how to reduce the national debt in 1997, how to fund extra NHS investment in 2001, and last year how to reduce the deficit once the recovery was secured…Each time we looked at whether it was right to raise VAT – and concluded it was not…We reached that conclusion because – as I have said many times before in public and in private – VAT is the only tax that everyone has to pay, whether they are unemployed or pensioners, and because it hits couples with children the hardest. It is therefore always the least fair option for raising tax…It is increasingly clear that David Cameron and George Osborne have no such qualms. Indeed, for more than two years they have been eagerly preparing the ground to raise the standard rate of VAT.”

The widget is gone now, but Balls’ article reminded me of the Labour Party’s mock-up radio broadcast attack on the imminent ’emergency budget’ from the election campaign, which foresaw a huge backlash against the Tories as a result of deep spending cuts.

Not that investment vs cuts was ever a legitimate line in the last two years, but it’s good to see our shadow cabinet and leadership candidates starting to talk about the economy again, continuing to oppose the Tories on what could be a regressive budget anbd beginning to reframe an economic message.

Until this week, as Andy Burnham had said, the party hadn’t begun to develop a coherent new message on the economy, where spending cuts should fall and the ration of cuts to taxation increases. Now, with Balls’ intervention and Ed Miliband’s on the 50p tax rate, there’s a more serious assessment and critique of the Tories, and where Labour should be headed in response.