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Labour conference: Balls unveils five-point growth plan Labour conference: Balls unveils five-point growth plan
(40 minutes later)
By Brian Wheeler Political reporter, BBC News   By Brian Wheeler Political reporter, BBC News
Ed Balls has unveiled a five-point plan to kick-start Britain's stalled economy in a speech to Labour's conference.Ed Balls has unveiled a five-point plan to kick-start Britain's stalled economy in a speech to Labour's conference.
It includes a VAT cut, tax breaks for small firms and using a bank bonus tax to pay for new affordable homes and guaranteed jobs for young people.It includes a VAT cut, tax breaks for small firms and using a bank bonus tax to pay for new affordable homes and guaranteed jobs for young people.
If the coalition adopted the proposals, Labour would back it, the shadow chancellor said.If the coalition adopted the proposals, Labour would back it, the shadow chancellor said.
Mr Balls is trying to boost Labour's economic credibility by saying it would not reverse all the coalition's cuts.Mr Balls is trying to boost Labour's economic credibility by saying it would not reverse all the coalition's cuts.
But the Conservatives said: "Ed Balls' VAT cut is unfunded and would add over £12bn to the deficit this year."But the Conservatives said: "Ed Balls' VAT cut is unfunded and would add over £12bn to the deficit this year."
In his speech to Labour's annual conference, Mr Balls signed the party up to tough spending rules and vowed that any windfall from the sale of bank shares would be spent on paying off the national debt.In his speech to Labour's annual conference, Mr Balls signed the party up to tough spending rules and vowed that any windfall from the sale of bank shares would be spent on paying off the national debt.
His five-point growth plan includes:His five-point growth plan includes:
  • Repeating the bank bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"
  • Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs
  • Reversing January's "damaging" VAT rise now for a temporary period
  • Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance
  • One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"
'Not profligate'
  • Repeating the bank bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"
  • Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs
  • Reversing January's "damaging" VAT rise now for a temporary period
  • Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance
  • One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"
'Not profligate'
Mr Balls admitted Labour had made mistakes with the economy - particularly on eastern European immigration and bank regulation - and "didn't spend every pound of public money well".Mr Balls admitted Labour had made mistakes with the economy - particularly on eastern European immigration and bank regulation - and "didn't spend every pound of public money well".
But he denied the party had been "profligate" - and launched an attack on coalition spending cuts, which he claimed were wrecking the country's chances of recovery.But he denied the party had been "profligate" - and launched an attack on coalition spending cuts, which he claimed were wrecking the country's chances of recovery.
Mr Balls said David Cameron and George Osborne had "the wrong prescription" for the current economic crisis, which was the "most serious in my lifetime".Mr Balls said David Cameron and George Osborne had "the wrong prescription" for the current economic crisis, which was the "most serious in my lifetime".
The shadow chancellor said Britain's economy faced a "global growth crisis" which was becoming "more dangerous by the day".The shadow chancellor said Britain's economy faced a "global growth crisis" which was becoming "more dangerous by the day".
He argued that having a plan to boost growth "will help get the economy moving again and stop the vicious circle on the deficit - but by itself it won't secure our economic future or magic the deficit away" and tough decisions would still be needed on tax and spending.He argued that having a plan to boost growth "will help get the economy moving again and stop the vicious circle on the deficit - but by itself it won't secure our economic future or magic the deficit away" and tough decisions would still be needed on tax and spending.
With the party in the middle of a two-year policy review, manifesto commitments are likely to be thin on the ground in Liverpool.With the party in the middle of a two-year policy review, manifesto commitments are likely to be thin on the ground in Liverpool.
Share pledgesShare pledges
But Mr Balls made two new pledges in his speech.But Mr Balls made two new pledges in his speech.
"First, before the next election - and based on the circumstances we face - we will set out for our manifesto tough fiscal rules that the next Labour government will have to stick to - to get our country's current budget back to balance and national debt on a downward path. And these fiscal rules will be independently monitored by the Office for Budget Responsibility."First, before the next election - and based on the circumstances we face - we will set out for our manifesto tough fiscal rules that the next Labour government will have to stick to - to get our country's current budget back to balance and national debt on a downward path. And these fiscal rules will be independently monitored by the Office for Budget Responsibility.
"And second we know that, even as bank shares are falling again, David Cameron and Nick Clegg are still betting on a windfall gain from privatising RBS and Lloyds to pay for a pre-election giveaway."And second we know that, even as bank shares are falling again, David Cameron and Nick Clegg are still betting on a windfall gain from privatising RBS and Lloyds to pay for a pre-election giveaway.
"We could also pledge to spend that windfall."We could also pledge to spend that windfall.
"But we will commit instead in our manifesto to do the responsible thing and use any windfall gain from the sale of bank shares to repay the national debt. That will be Labour's choice - fiscal responsibility in the national interest.""But we will commit instead in our manifesto to do the responsible thing and use any windfall gain from the sale of bank shares to repay the national debt. That will be Labour's choice - fiscal responsibility in the national interest."
A Conservative spokesman said Mr Balls had "deliberately fiddled" fiscal rules in the past, and the public would not trust his announcement of new restrictions.A Conservative spokesman said Mr Balls had "deliberately fiddled" fiscal rules in the past, and the public would not trust his announcement of new restrictions.