UK Economy: Does Ed Balls Have a Credible Alternative?
UK Economy: Does Ed Balls Have a Credible Alternative? Reuters

Shadow chancellor Ed Balls has reviled his five-point plan to help bolster the UK's stagnate economy, including tax breaks to home owners and small businesses.

Speaking at the Labour conference in Liverpool, Balls announced his plans to slash VAT to 5% for home improvements and repairs for a year and to introduce a 12-month national insurance break for small businesses taking on new workers.

He also reaffirmed previous proposals to revers January's VAT from 17.5% to 20% and promised a return of the banker bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"

He also said how the government should bring forward long term investment projects covering schools roads and transport to help create jobs.

A one-year national insurance break for every small firm which takes on extra workers could be funded by money left over from the government's "failed" NI rebate for new businesses, he said.

"Five immediate steps the government could take tomorrow - and if they do so, we will back them," said Mr Balls.

"Call it Plan A-plus. Call it Plan B. Call it Plan C. I don't care want they call it - Britain just needs a plan that works."

In his first speech as Shadow Chancellor, Mr Balls acknowledged that Labour has a fight on their hands to restore public confidence on its credibility on the economy, after the bank crisis which happened under Gordon Brown.

Mr Balls admits that there had been "mistakes" by the Labour government with regards to the economy, giving examples such as Eastern European immigration and banking regulation and that they "didn't spend every pound of public money well".

But he also launched an attack on the current coalition cuts, which he claims are ruining the countries' change of recovery and denying that Labour had been "profligate".

Balls said: "Don't let anyone tell you that a Labour government was profligate with public money. When we went into the crisis with lower national debt than we inherited in 1997, and lower than America, France, Germany and Japan. Don't let anyone say it was the public spending on public services here in Britain which caused the global financial crisis."

But he added: "We did not get everything right, we made mistakes... the 75p pension rise, we did not do enough to get all employers to train, we should have adopted tougher controls on migration from Eastern Europe, we did not spend every pound of public money well. And yes we did not regulate the banks toughly enough and stop their gross irresponsibility."

Mr Balls also said that David Cameron and George Osborne had "the wrong prescription" for the current economic crisis, which was the "most serious in my lifetime" and he accused the coalition government of making "reckless, ideological, unfair" spending cuts which had cost jobs and left the economy stalling.

"The Government must adopt a steadier, more balanced plan to get our deficit down and take immediate action now to support the economy and create jobs here in Britain," said Mr Balls.