Labour to boost childcare allowance
A Labour government would give working parents 25 hours a week of free childcare for children aged three and four, shadow chancellor Ed Balls has promised.
Mr Balls told Labour's annual conference in Brighton that the offer - available to single parents and families where both parents work - will be funded by an £800 million hike in the bank levy rate.
But he warned delegates that if Labour returns to power in 2015, it will have to show "iron discipline" on tax and spending, keeping the coalition Government's cap on benefits, stripping winter fuel allowance from the richest pensioners and not reversing the decision to withdraw child benefit from wealthy households.
"We won't be able to reverse all the spending cuts and tax rises the Tories have pushed through," said Mr Balls. "And we will have to govern with less money around. The next Labour government will have to make cuts too."
Mr Balls also appeared to signal a significant weakening in Labour support for the High Speed 2 (HS2) project to build a new rail link between London, the Midlands and the north of England, suggesting that the potential £50 billion price-tag might be better spent elsewhere. Repeating his line that, as chancellor, he would not offer a "blank cheque" to HS2, he added: "The question is - not just whether a new high speed line is a good idea or a bad idea, but whether it is the best way to spend £50 billion for the future of our country."
At a conference which has been overshadowed by reports of feuding between Labour's last generation of leaders, Mr Balls sought to scotch speculation about tension with Ed Miliband by describing the leader as "my friend, our leader, Britain's next prime minister" who was "leading from the front" on issues ranging from the economy to media regulation.
By contrast, he said that Prime Minister David Cameron had "diminished Britain" by squandering influence overseas and choking off recovery at home. Mr Balls dismissed as "nonsense" Conservative claims of a £27.9 billion "black hole" in Labour's spending plans. He also announced that he will ask the Office for Budget Responsibility (OBR) watchdog to audit Labour's manifesto to confirm that their tax and spend sums add up.
He told activists: "The Government's day-to-day spending totals for 2015/16 will have to be our starting point. Any changes to the current spending plans for that year will be fully funded and set out in advance in our manifesto. There will be no more borrowing for day-to-day spending. And we will set out tough fiscal rules - to balance the current budget and get the national debt on a downward path."
Mr Balls also said a new 10p starting rate of tax would be introduced. He said to delegates: "A tax cut for 25 million hard-working people on middle and lower incomes. And we will pay for it by introducing a mansion tax on properties worth over £2 million, introduced in a fair way, so that foreign investors who buy up property in London to make a profit will finally make a proper tax contribution to our country."
Speaking to BBC Radio 4's The World At One, Office for Budget Responsibility (OBR) chairman Robert Chote said: "I think the idea of having independent scrutiny of party promises/party manifestos in the run-up to the general election is generally a good idea." He said a separate debate was needed regarding the OBR's suitability in taking on such a role, but it was a matter for Parliament. "There, I think, the key point is that it's not really for us to say what our job is, it's for Parliament to say what our job is," he added.