In Depth

Balls launches spoiler as talk grows of Tory giveaway Budget

Balls warns of unprecedented cuts if Tories are returned to power - but is he crying wolf again?

The Mole

Shadow Chancellor Ed Balls is running a ‘spoiler’ today against George Osborne’s 18 March Budget by warning that any electioneering tax giveaways will be more than offset by “extreme” cuts in the welfare state if the Conservatives are returned to power.

The Labour leadership is alarmed by rumours at Westminster - reported in the Sunday Times - that Osborne is planning an income tax cut for 27m voters and a so-called ‘Google tax’ crackdown on multinationals who avoid paying tax in Britain. 

What has rattled Balls and Ed Miliband is that the ‘Google tax’ – more properly referred to as a ‘diverted profits tax’ - would be highly popular. 

The 25 per cent tax — five per cent higher than the usual 20 per cent corporation tax rate that kicks in in April — would be imposed on companies judged to have shifted cash overseas with the sole intention of sidestepping HM Revenue & Customs.

Osborne apparently plans to use this new revenue to pay for the raising of the income threshold at which people start paying tax to somewhere near £11,000. The threshold is already due to rise from £10,000 to £10,600 this April: if Osborne can nudge it up a bit further, perhaps by another £200 or more, the Tories hope it will answer critics who say they are only interested in making tax cuts for their rich friends. 

Shadow Energy Secretary Caroline Flint, appearing on the Andrew Marr Show yesterday, sounded pretty desperate when she argued that raising the tax threshold would not help the very poorest who don’t pay taxes at all.

So it’s been left to Ed Balls to try and save the day for Labour.

Balls – a clogger when he dons a football jersey for the MPs’ football team - knows how to “get his retaliation in early”. That is what he is doing today by publishing a dossier showing where he thinks the axe will fall if Osborne and Cameron are re-elected on 7 May. 

It will say that non-protected departments, such as policing and social care, face “catastrophic" and “unprecedented” cuts. 

General Election 2015: who will win?Ten things we've just learned about Ed Miliband

Balls will say: "The analysis we are publishing today shows Tory plans mean spending cuts larger in the next four years than in the last five years. We are not even halfway through the cuts the Tories are planning.

"Spending cuts which are larger than any time in post-war history - a bigger fall in spending as a share of GDP in any four-year period since demobilisation at the end of the Second World War. 

"Spending cuts which are larger than any other advanced economy in the world. More extreme than in this parliament, the most extreme in post-war history and the most extreme internationally."

The problem for Labour, not for the first, is: will anybody believe Balls? In 2010, he told Bloomberg News that Osborne was risking “a double dip recession" with his plan for cuts in public spending. In a speech to the City, he warned that an “economic hurricane” was heading for Britain.

So far, despite his dire warnings, economic growth is happening and, only in January, IMF boss Christine Lagarde hailed Osborne’s plan for recovery as an example to the world. 

Image removed. Image removed.

Recommended

How many people need to be vaccinated against Covid to get life back to normal?
Margaret Keenan becomes the first patient in the UK to receive the Pfizer/BioNtech vaccine
In Focus

How many people need to be vaccinated against Covid to get life back to normal?

‘The grotesque sight of Labour united with right-wing Tory rebels’
Keir Starmer makes a statement on the UK economy
Instant Opinion

‘The grotesque sight of Labour united with right-wing Tory rebels’

Quiz of The Week
Boris Johnson chairs a session of the UN Security Council
Quizzes and puzzles

Quiz of The Week

Global Covid pandemic responses have made other diseases worse
NHS staff treat a Covid patient in intensive care at Frimley Park Hospital, Surrey
In Depth

Global Covid pandemic responses have made other diseases worse

Popular articles

Best TV crime dramas to watch in 2021
Line of Duty series six returns to BBC One in 2021
In Depth

Best TV crime dramas to watch in 2021

Ten Things You Need to Know Today: 25 Feb 2021
10 Downing Street
Daily Briefing

Ten Things You Need to Know Today: 25 Feb 2021

Ten Things You Need to Know Today: 27 Feb 2020
10 Downing Street
Daily Briefing

Ten Things You Need to Know Today: 27 Feb 2020