Ed Balls says Osborne’s Budget is “an interesting idea”

Ed Balls has announced that there was nothing in the Budget that Labour would reverse if the party are elected.

The shadow chancellor backed George Osborne’s plan to give help for first time buyers under the Help to Buy: ISA policy.

The initiative will get rid of tax on the first £1,000 of interest from savings, which Mr Balls thought was an “interesting idea”.

Mr Balls said Labour would also keep the increase in the personal tax allowance, set to rise by £400 by 2017, meaning 95% of savers would pay no tax.

 

But Mr Balls also said that the “extreme” cuts made by the Conservative party would be axed if Labour came to power in May.

“What I will reverse is a plan for deeper spending cuts in the next three years than the last five,” said the shadow chancellor. “I think that is a really risky and dangerous prospect for our country.

“I think he’ll end up cutting the National Health Service or raising VAT.”

He revealed that Labour would combat the deficit with more “sensible” spending cuts and tax increases for those who can afford it.

Mr Balls also said that Mr Osborne’s Budget did nothing to change “the fundamental picture”, calling it “quite empty”.

Lib Dem Chief Secretary to the Treasury, Danny Alexander, also announced a “different proposition” in that the party would not be completely dependent on spending cuts to pay off the deficit.

“The Conservatives are going in a more extreme direction with all the focus on reducing the size of the state. I don’t think that’s right.”

Mr Alexander aims to invest in the NHS in order to “reward public sector workers whose pay restraint has been a key part of balancing the books in this parliament”.

While proposing his Budget, Mr Osborne said Britain was a “comeback country” and advised against a return to Labour “chaos”.

He said: “I’m not proposing deeper cuts than the ones over the last five years, I’m proposing the same pace of cuts for the next couple of years as we had over the last five.”

The Chancellor of the Exchequer insisted that money would also be raised by cutting the welfare budget and tackling tax avoidance.

He predicted better growth figures, suggesting that the economy will expand by 2.5% this year.

Mr Osborne plans imply “a much sharper squeeze on real spending in 2016-2017 and 2017-2018 than anything seen over the past five years” according to the independent Office for Budget Responsibility.