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 253.

    How anybody can vote for a party that has Ed Balls as a minister is beyond me. The man is a fool.

  • rate this

    Comment number 252.

    The point at which 40% tax is applied needs to go up. It was meant to be a tax on "the rich" but is now hurting hard working people. We pay too much tax in this country.

  • rate this

    Comment number 251.

    208 Darren

    Public sector employment rose by over one million people under New Labour from 5.4m to 6.4m. It was MAD.

  • rate this

    Comment number 250.

    My only comment is look where the Garden City is going Tory land South East yet again they are looking after their own

  • rate this

    Comment number 249.

    Agreed. Our short term wham bam fast buck sod you approach is damaging and divisive. That said, this is an ideal environment for the commercial lobbies that have pre purchased our parties - politics Merican style.
    The Germans plan strategically via coalition with a stakeholder centric perspective - need to behave like adults and be less selfish for that to work of course.

  • rate this

    Comment number 248.

    Don't just blame the bankers for the financial collapse. The majority of households in this country were living way beyond their means on borrowed money and borrowed time. It takes two to tango. People also expect that their standard of living to go up every year or they feel the politicians are to blame. How naive can you get?

  • rate this

    Comment number 247.

    The welfare cuts are affecting the hardworking people Osborne refers to. He just ignores that fact.

  • rate this

    Comment number 246.

    Freespiurit (226) I think you're interpreting things the way you want them to be. No one is blaming Labour for the world financial crisis, but they certainly are to blame for the reckless spending which left us with an unmanageable deficit. Every Labour admin. there has ever been has screwed up the economy. Balls is right to be daunted by the office of Chancellor; vote Labour, end up like Spain!

  • rate this

    Comment number 245.

    One thing I would introduce would be to lower the tax on bank account savings. That way interest rates stay low, but people have an incentive to save. Big vote winner?
    It's called an ISA.

  • rate this

    Comment number 244.

    We desperately need a Political Party made up Of the People, For the People.

  • rate this

    Comment number 243.

    Osborne: "I'm going to do X"
    Balls: "Y hasn't worked in the past, look at your record, X will never work, I propose... X"
    Me: "Didn't you both just propose the same idea, with the tiniest difference?"
    Balls: "Erm..."
    Osborne: "Erm... quiet pleb"
    The two major parties are so similar now, and as a result the UK has become a shadow of a democracy.

  • rate this

    Comment number 242.

    227. AnEnglishWoodsman
    "Cut VAT"

    VAT was cut, for ski lifts, in Danny Alexander's constituency they use ski lifts.

  • rate this

    Comment number 241.

    There IS no cost of living crisis. New Layabout made that up. In any society there are richer and poorer. Some people think they should be richer, but so it goes. One Nation Layabout has no answers, only lies. Like the Nazis and their Big Lie, ONL thinks repeating it will con us into electing them, but it won't. My one consolation is that Balls will never be Chancellor.

  • rate this

    Comment number 240.

    We're all slaves kept in poverty. Surplus-value, profit, is determined by the rate of surplus labour extracted. It's the driving force of capitalism. Unless we discover some hitherto undiscovered land to expand and exploit their people or produce offspring-slave-commodities to defray our own exploitation Then we must face a reality of a dystopian future of permanent austerity and imperialist wars

  • rate this

    Comment number 239.

    It would massively effect private pensions so I wouldn't vote for it as i dont have a guaranteed public sector pension
    Neither do I, I have a non-inflation proofed pension where the 1% taken by the greedy pension companies every year mounts up to a lot of cash . It's only the financial institutions scare mongering Drop this charge to .4% and then add the financial transaction tax.

  • rate this

    Comment number 238.

    I regard economists from financial companies interviewed by the BBC for their ‘expert’ opinion like horse racing tipsters… so often prove them wrong and their track record is abysmal. If it wasn’t we’d all be well off and happy.

  • rate this

    Comment number 237.

    To be fair, that's not the fault of politicians - blame the public that continually vote them in.

    To be fair to the public blame the brain washing by the media who have vested interests in political parties. The promises made by the politicians that are broken as soon as they get into power.

  • rate this

    Comment number 236.

    Balls and Labour have no creditability on economy. End of story.

  • rate this

    Comment number 235.

    How about a chancellor who isn't prepared to scalp the poor while letting the rich continue their harmful, decadent and unregulated ways.

  • rate this

    Comment number 234.

    my son is leaving nursing for a job at aldi same pay less hrs less stress this government is pushing our n.h.s. staff to the limit if they get another 5 yrs I fear for our n.h.s. for that alone I could not vote tory


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