We cannot rely on George Osborne to see sense

Three years into this government it’s clear their economic policies have failed – on living standards, growth and on deficit reduction too.

That’s why, as I argued in my speech at Reuters today, the purpose of the spending review this month should be action to boost jobs and growth this year, next year and the years after.

Action now on growth is the best way to mitigate the scale of the cuts the government says it has to make to public services in 2015-16 and beyond.

For instance, if the infrastructure boost recommended by the IMF was spent now on housing it would allow the building of around 400,000 affordable homes across the country, and support over 600,000 new jobs in construction, including 10,000 apprenticeships.

But we cannot rely on George Osborne to see sense. So Labour must start planning now for what will be a very difficult inheritance in 2015.

The plans in this year’s spending review will be our starting point, but we will have to find efficiency savings and switch resources to Labour’s priorities. And we will also need to set out plans to invest in the homes, schools and infrastructure we need to build for the future.

In tough times we have to make difficult choices about priorities for public spending and what the right balance is between universal and targeted support. So when our NHS and social care system is under such pressure, it can no longer be a priority to continue paying the Winter Fuel Allowance – a vital support for middle and low income pensioners – to the richest 5% of pensioners.

Our task is to show we can turn things around on growth and living standards at the same time as dealing with the deficit in a fairer way than we’ve had under the Tories.

Where this government’s failure on growth and jobs has led to their failure on living standards and on the deficit, the next Labour government will get things back on track to finish the job.

Ed Balls is the Shadow Chancellor