Labour Won't Reverse Tory Public Spending Cuts, Miliband Will Announce

Ed Miliband, leader of the Labour Party
Ed Miliband, leader of the Labour Party

Ed Miliband will set out the "hard reality" of the choices facing Labour as he acknowledges the party will not be able to commit to reversing any of the cuts in day-to-day public spending George Osborne will set out next week.

The Labour leader will not make any promises on changes to the spending plans set out by the Chancellor unless he can be "absolutely crystal clear" where the money would come from.

As the party seeks to win the electorate's trust on the public finances Miliband will rule out more borrowing, meaning any changes to the Chancellor's announcements in his 2015/16 spending review would require cuts from elsewhere or tax increases.

The Labour leader will tell his party's National Policy Forum in Birmingham: "None of us get to choose the times in which we live and we won't get to choose the circumstances of the next Labour government either.

"If we win the election, we will come to power in tougher economic circumstances than we have seen in generations and that will have to shape the way that we govern.

"Our starting point for 2015/16 will be that we cannot reverse any cut in day to day, current spending unless it is fully funded from cuts elsewhere or extra revenue - not from more borrowing.

"So when George Osborne stands up next week and announces his cuts in day to day spending, we won't be able to promise now to reverse them because we can only do so when we can be absolutely crystal clear about where the money is coming from."

Miliband will say he and shadow chancellor Ed Balls are clear about the approach, and insist the rest of the Labour Party should get behind it.

"It's a hard reality. But I am clear about it, Ed Balls is clear about it, and everyone in the Labour Party should be clear about it too.

"People will only put their hope in us if we show how we will make a difference. But people will only put their trust in us if we show we are credible. Only if we have the discipline to face the challenge of our times, can we change the direction of our country."

With the economy set to be the key electoral issue in 2015, Mr Miliband and Mr Balls have made a series of announcements in recent weeks aiming to show the party's credibility on getting the nation's finances under control.

Balls has said the party would stick to the coalition's 2015/16 departmental budgets if it wins the next general election, and announced that wealthier pensioners would be stripped of winter fuel payments.

Miliband has effectively ruled out reversing the coalition's child benefit cuts for high earners, saying other priorities would come first, and also promised a cap on welfare spending.

He will tell the National Policy Forum: "We will have to govern in tough times and we will have to turn things round by making different choices, reforming our economy so it works for working people, investing in the long-term and, most of all, by always being guided by our values: the values of One Nation of everybody having the chance to play their part, of everybody sharing responsibility."

Ahead of Thursday's spending review, Miliband will say: "Two years ago, George Osborne said: 'We have already asked the British people for what is needed, and we do not need to ask for more'.

"Next week he will break that promise because this government has failed on growth and living standards. For all the cuts, all the pain, all the tax rises, they are saying the deficit will be £78 billion higher at the next general election than they planned."

He will again attack the Government's decision to cut the top rate of income tax, saying it feels like a "recovery for those at the top" but "it still feels like a recession for everybody else: wages down, prices up, living standards falling for longer than they ever have in our history".

The Labour leader will also use the speech to warn profit-seeking developers that they could be stripped of land if they fail to build homes on it.

So-called "use it or lose it" powers are among policies being considered by Labour to ease housing shortages and boost the construction industry.

Recent research found there were 400,000 homes that have not been built despite councils giving planning permission.

Labour said that, although councils could already forcibly buy land in extreme cases where there was an "overwhelming public interest", the party was looking at reducing the threshold for deploying the option.

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