George Osborne and Ed Balls trade pre-Budget blows

Ed Balls and George Osborne Ed Balls and George Osborne appeared on the Andrew Marr Show three days ahead of the Budget

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Chancellor George Osborne and shadow chancellor Ed Balls have set out their competing messages ahead of the Budget on BBC One's Andrew Marr Show.

Mr Osborne said the coalition's welfare reforms were "one of the most progressive things that any government has ever done".

He also revealed that the Help to Buy scheme for newly built homes would be extended to 2020.

But Mr Balls accused him of failing to stem the UK's "cost of living crisis".

The chancellor said: "I'm a low tax Conservative. I want hard-working people on all incomes to keep more of their income tax free."

'Perverse incentives'

His priority had been to increase the personal allowance on which no income tax is paid, he said.

This had taken the lowest paid two million workers out of tax altogether - but also helped those on higher incomes, he added.

Start Quote

There was nothing that could have been done pre-crisis to raise taxes or to cut spending which would have made any difference”

End Quote Ed Balls Shadow chancellor

Mr Osborne also said he had frozen fuel duty "year after year" and had "helped to keep council tax frozen".

He continued: "We had a welfare system that not only we couldn't afford but also we had these very perverse incentives that made it better for some people to stay out of work than be in work.

"We're changing all of that, and the reforms that Iain Duncan Smith and myself have brought in are one of the most progressive things that any government has ever done."

The chancellor also said the government's Help to Buy scheme had "helped people into homes, and... helped build new homes".

"I want to extend the help to buy scheme for newly built houses - it was going to end in 2016; we are now going to extend it for the rest of the decade," he said.

"That will mean 120,000 new homes."

George Osborne said the government's initial plan was to build 15,000 new homes in Ebbsfleet

He also announced plans to build a new garden city in Ebbsfleet.

But Mr Balls said the government was not investing enough in affordable homes and had presided over the "lowest level of house-building since the 1920s".

"If you boost demand with Help to Buy and don't do enough on supply, the price goes up, it's harder to get into the housing market, the economy becomes more unbalanced and the cost of living crisis gets deeper," he told BBC Radio 5 Live's Pienaar's Politics.

Bank levy

Earlier, on the Andrew Marr Show, he had said the chancellor was "only ever tough when he is having a go at the weak and the voiceless".

By contrast, he argued, Labour would "take away the winter allowance from the richest pensioners", "re-introduce the 50p tax rate on incomes over £150,000" and impose a "mansion tax" on properties worth more than £2m.

A future Labour government would also use a bank levy "to pay for more childcare for working parents", bring back the 10p income tax rate, and abolish the "unfair and perverse marriage tax break, which George Osborne has given only to a third of married couples".

"These things are all paid for. I am not making any spending commitments which we can't say how we'll pay for them," he said.

Labour's proposed spending is all "paid for and costed", says shadow chancellor Ed Balls, and highest earners will pay more tax

The shadow chancellor also defended the previous Labour government's record in office on public spending.

"There was a global financial crisis," he said.

"At that point, we had the lowest level of national debt of any big country and George Osborne, the Conservative shadow chancellor, had matched Labour's level of public spending.

"Am I going to apologise for the level of public spending that George Osborne, Alistair Darling and Gordon Brown agreed on in 2007? Absolutely not.

"What we did on the NHS was hugely important, the national minimum wage, not joining the euro.

"The economics of this is that we had a very low deficit [and] low national debt before the crisis. What happened was a collapse in tax revenues because of the crisis.

More on Budget 2014

"There was nothing that could have been done pre-crisis to raise taxes or to cut spending which would have made any difference."

The two MPs also took to the Sunday tabloids to set out their policies.

Writing in the Sun on Sunday, Mr Osborne pledged to build what he called a "resilient economy".

But Mr Balls, in the Sunday Mirror, said millions of people were not feeling any benefit from economic recovery.

Meanwhile, Liberal Democrat Chief Secretary to the Treasury Danny Alexander also hailed rises in the personal tax allowance.

Writing in the Mail on Sunday, he said: "I made it clear at our spring conference last week that further rises would be a top priority for our party in any negotiations that might be required should the British people deliver a hung parliament.

"We aspire to raise it substantially to £12,500."

He also said the Lib Dems were committed to sticking to the plan to eradicate the deficit and get the nation's finances on a firm footing by 2018-19.

"That means that there is a period of further deficit reduction required after the next General Election."


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  • rate this

    Comment number 733.

    I love the way they both say that Scotland would be bankrupt and couldn't survive if it voted for independence...but refuse to concede that as UK/Westminster government is already bankrupt and the deficit increasing, the prospects for Scotland staying are simply taking more cuts and austerity than we are already...If UK can survive like that so can Scotland!
    Gie wis a tax break!!

  • rate this

    Comment number 732.

    Many many employed people in this country no longer care what the tax allowance and tax rates are...why? because the Nasty Party have liaised with big business to put millions of people into part time jobs of 16 hrs a week or the dreaded zero-hour contracts which should be banned altogether.
    And all to satisfy the Tory God of reducing the Welfare Budget. And they don't care if people starve!

  • rate this

    Comment number 731.

    I see the "eliminate tax avoidance brigade" are out.

    HMRC own assessment of tax avoidance is c £7b which will not make a significant dent in the deficit.

    Most tax avoidance is nothing of the sort it is simply the correct application of the law, in the way it is meant to work.

  • rate this

    Comment number 730.

    All Politicians,irrespective of the Party they support,have an awful big problem.
    They think that anyone who disagrees with them can safely be ignored.
    Which is something a good Politician would never do.
    Sadly..we do not have too many good Politicians.

  • rate this

    Comment number 729.

    "does with tax rises and saving from sacking public sector workers and cutting benefits "

    Yes I agree. He should not have raised taxes and should have reduced the size of the public sector further and been more tough on cutting back on level of transfer payments.

  • rate this

    Comment number 728.

    710 David M: Obviously we should ask the wealthy how much they feel happy to pay then.
    I suspect you wouldn't let me charge the wealthy £15/hour for a cleaner. There's this pernicious belief that 1) rich people 'earn' their salaries. Some do, most don't. 2) local taxes - we all benefit the same - or the poor do best. Neither (counterintuitively) is true.

  • rate this

    Comment number 727.

    Ed or George, tackle tax avoidance if you want to win votes.
    You can start off with those who can't just take their business elsewhere like football players in the governed by the FA, retail banks who operate in the UK, on-line retailers or coffee shops who operate in the UK. If they are taking our money they can pay PAYE and corporation tax like the rest of us.

  • rate this

    Comment number 726.

    I would like to see how much tax all our MP's payed? Of course their chummy bankers probably give them it back as a bung for keeping them in our cash.
    One day.....come the hour.....

  • rate this

    Comment number 725.

    I don't trust either of these men with the UK economy. The question needs to be which one do I mistrust the least.

  • rate this

    Comment number 724.

    Stop giving aid to foreign countries that do not need it. Secondly ensure that Balls never has the opportunity to wreck the economy again like he did as Brown's poodle or just give the Scots independence and we will never have to suffer a left wing Labour government again.

  • rate this

    Comment number 723.

    Which of these is going to address all the Corporation Tax Loopholes that the big 4 Accountancy firms advise HMRC about, and then advise their clients how to avoid paying Corporation Tax?

    See Panorama -

    There are £Billions being avoided by extremely rich corporations

    Tax is only fair if it is applied equally

  • rate this

    Comment number 722.

    All political promises should be binding.
    MP's expences should be restricted to genuine out of pocket expences and NOT perks.
    Expences should be capped.
    Second homes should be scrapped, surely the government could provide somewhere for MP's visiting London with a place to sleep? Without having to pay for a second home for each and every MP.
    Flipping homes should be made illegal.

    More - no space

  • Comment number 721.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 720.


    Our 'rule' is by the sum of all decisions, its 'yield' (in quantity & quality & distribution) roughly - very roughly - follows the distribution of income (disposable: from inheritance, from 'earnings' in work & from capital).

    For 'democracy', all decisions of social relevance (NOT just those of MPs) need to be taken by agreed equal partners, inherently 'representative'.

  • rate this

    Comment number 719.

    715 sprout)_2001
    Bit like the Daily Mail's Middle England, which covers the 85-95% deciles. Those on 40% tax band. MP's on £65K are within the 95-100% decile. They do not know what life is like for ordinary people. I'm with Vince "No one really needs £1 million a year"

  • rate this

    Comment number 718.

    Tony Benn said;
    "The IMF and WTO, like the EU, are run by people who are not elected and cannot be removed. They don’t listen to you or me in Brussels, or the WTO or IMF. They are running a global dictatorship of the wealthy. How can you have any system which calls itself global without any form of accountability to the people who have to obey it?"

    UK Chancellors simply join "the wealthy!"

  • rate this

    Comment number 717.

    It's all coming down around our ears and we are given these two buffoons to try to get us to keep believing one or other of them will make a blind bit of difference. Just as long as the pantomime goes on so the 'elites' can milk the last drops from the sinking ship.

  • rate this

    Comment number 716.

    Instead of bleeding the what they call the hardworking people dry.With continious demands from our wage packets to fritter away.Our political windbags have turned this country into a basket case.They all know what needs to be done but have neither the leadership skills or backbone to do it.

  • rate this

    Comment number 715.

    Tory Ex-chancellors call those who pay 40% tax "the Squeezed middle"

    Seeing as its the top 16% (1 in 6) of wages who qualify for that bracket....

    How twisted and skewed does it have to be for that to be a middle?

    Talk about brazen liars...

  • rate this

    Comment number 714.

    The present political system is 3 shades of the same grey, with career MPs justifying their miserable existence and on another planet from reality.

    People knock Farage, and I'm no fan either, but at least he's had a job outside politics and knows what he stands for. The rest?

    I's been said already - time for a MAJOR shake-up and maybe a new PARTY made up of people who CAN make a difference?


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