Ed Miliband Ed Balls
Ed Miliband and Ed Balls have bee outlining Labour's alternative to the government for the UK Budget 2013 (Reuters)

As the UK and its Chancellor George Osborne prepare for the Budget 2013, and with the economy teetering on the cusp on an unprecedented triple-dip recession, the Labour opposition has already started laying out its alternative set of policies to lift the country out of its growth coma.

A blend of tax cuts and extra spending - partly funded by more borrowing on top of the country's ever-bloating public debt pile - fill Labour's costly list of Budget proposals, leading to accusations from the government that they would repeat the same fiscal mistakes of the past that led to their legacy of structural deficit.

"I would act to stop the economy flat lining because the reason why the deficit is going up, the reason why families are under so much pressure is because the economy's not growing; and unless you get growth into the economy, then you can't make things better and get the deficit down," Ed Balls, Labour's shadow Chancellor, told the BBC's Andrew Marr Show.

Osborne's Budget is expected to include very little fiscal action with his steadfast commitment to deficit reduction through reduced public spending.

While government departmental spending has fallen, overall public spending has actually increased as the Treasury is forced to borrow more in light of dwindling tax receipts and flat economic output.

Balls said he would build more homes if he was in Osborne's seat, an infrastructure drive he says would be central to his recovery strategy for the economy.

"What Britain needs next week is not more tinkering of the same old polices rebranded, repacked and relaunched," he wrote in a Guardian article.

"Instead, we need a bold and radical budget to kickstart our stagnant economy with housebuilding at its heart."

Currently, the government's FirstBuy scheme offers help to first time buyers in securing a mortgage, by offering an equity loan on certain new build properties, which brings down the stinging deposit costs that put so many off taking their first step onto the property ladder.

Balls has said he would go one step further and offer a stamp-duty holiday for first-time buyers on properties worth up to £250,000. The current lower threshold is £125,000, at which point 1 percent of the property's value is due in stamp duty.

In September, the government announced plans to relax planning laws to stimulate 75,000 houses being built that had been held up by red tape, as well as additional money for the FirstBuy scheme.

Among other measures, the Confederation of British Industry, Britain's biggest business lobbyist, has called for £1.25bn of capital investment through the government's current Affordable Homes Programme to build 50,000 new residential properties and create 75,000 jobs in the ailing construction sector.

Balls said the £2.3bn raised from the 4G mobile spectrum auction should be used to build 100,000 new homes.

Mansion tax

Liberal Democrats in the Coalition have long pushed for a wealth tax on homes worth more than £2m, dubbed the Mansion Tax, but their proposals have been swatted away by Osborne's Treasury.

Ed Miliband, Labour's leader, recently announced his party has adopted this mansion tax policy and would use the proceeds to reintroduce the 10p tax rate for low earners, something scrapped by his former boss and prime minister Gordon Brown.

Balls has reiterated this policy ahead of Osborne's Budget, though Labour lost a recent Commons vote on a mansion tax after Liberal Democrats failed to back the motion, calling it a cynical party-political ploy aimed at disrupting the Coalition.

A mansion tax may require a re-evaluation of the council tax bandings, potentially landing British households with a higher tax bill as a result.

Policy Exchange, a think tank, estimates there to be between 35,000 and 70,000 properties worth more than £2m in the UK economy. Three quarters are in the south east of England.

Its economists calculate that to raise £2bn, each property would have to be taxed between £25,000 and £50,000.

In the 2013/14 fiscal year, just to raise the personal allowance - the threshold at which owners start to pay tax - by £100 would cost £510m, according to HMRC.

To reintroduce a 10p rate would likely cost much more than the £2bn raised, meaning Labour would have to find money elsewhere, either from increased taxation, spending cuts, or further borrowing.

Scrap top rate tax cut

Labour has also been vocal against the planned cut to the top rate of tax from 50p to 45p as of April, a policy announced during Osborne's last budget.

The party has labelled it a "tax cut for millionaires", though it is only applied on annual incomes of more than £150,000.

Balls said Labour would scrap the planned cut if it was in power.

"No Chancellor can justify a tax rate that damages our economy and raises next to nothing," said Osborne in his 2012 Budget, insisting Treasury coffers barely benefited from the 50p rate.

He said the slash would make the UK more competitive and end up generating more tax revenues.

Despite Balls's call to stop the top rate cut, he has said the government should fund a temporary cut in the basic rate of 20 percent with extra borrowing.

This would help ease the financial burden on lower earners and stimulate demand in the economy, he argued in a Telegraph interview, with the resulting economic growth helping to pay back debt and reduce the deficit.

However, Balls said he would favour a VAT cut over all else. VAT is at 20 percent after being hiked in January 2011 from 15 percent.

TUC research shows that the lowest-paid workers in the UK economy are paying out four times more because of the VAT hike than they are getting back because of the increases to the personal allowance threshold.

"If the Chancellor really wants to make a difference to family budgets he should look at reversing his VAT hike and cuts to vital tax credits and benefits," said TUC general secretary Frances O'Grady.

Bankers' bonus tax

In 2009, the Treasury, under the control of a Labour government, introduced a temporary 50 percent tax on bankers' bonuses for the first five months of 2010 as recession and financial crisis gripped the UK economy.

Balls said he would reintroduce this raid on financiers' bonus pots in order to pay for jobs for young people.

There are almost a million youths out of work in the UK economy, with an unemployment rate of 20.8 percent among 16 to 24-year-olds.

Osborne will deliver his 2013 Budget in the House of Commons at 12:30 on March 20.