Election 2015: Labour's Ed Balls says no guarantee to exempt Scotland from cuts

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Ed BallsImage source, Reuters
Image caption,
Ed Balls believed money from the "mansion tax" would benefit the NHS in Scotland

Labour's Ed Balls has told the BBC he could not guarantee that Scotland would be exempt from spending cuts if he became the next Chancellor.

But he said he believed policies such as the proposed tax on properties worth more than £2m would benefit Scotland.

Mr Balls was speaking to BBC Radio 4's Today programme ahead of his party's manifesto launch.

The SNP's Nicola Sturgeon said that view appeared to contradict that of Scottish Labour leader Jim Murphy.

Mr Murphy had previously said that the party would not need to make "further cuts to achieve our spending rules" in the next parliament.

Shadow Chancellor Mr Balls explained that a Labour government would have to make cuts in "non-protected" areas which would apply in England and Scotland.

He went on to say that changes to the tax system, such as the proposed "mansion tax" rule, would mean Labour could increase spending in priority areas such as the NHS.

Mr Balls said he believed that in 2015/16 that would deliver £800m extra for Scotland which could then be spent on jobs for young people, more childcare and the NHS.

He added: "Whether or not the overall Scottish budget is cut depends upon whether or not that £800m, which is financed and extra, is more than or less than our unplanned cuts - and that will depend upon the scale of the unplanned cuts.

"I can't say to Scotland that you're going to be exempt from spending cuts in the unprotected areas but they're sensible and they are absolutely in marked contrast to what the Tories are proposing - because they want to have double the spending cuts next year than last year - and also the SNP, because what we exposed last week is the SNP both won't match our manifesto pledges but also their fiscal autonomy within the UK is actually fiscal austerity in the UK.

"It would mean a massive cut to spending in Scotland."

Image caption,
Labour's Chuka Umunna was speaking to the BBC's Daily Politics programme

Following the radio interview, Mr Murphy said he and Mr Balls had been clear that a Labour government would "have to make savings" north and south of the border, however, he suggested these need not continue beyond 2015/16.

However, that was at odds with Labour's spokesman on business, Chuka Umunna, who told the BBC's Daily Politics programme that cuts would have to be made throughout the life of the new parliament.

He said: "The leader of the Scottish Labour Party [Jim Murphy] will not be in charge of the UK budget.

"The leader of our country, our next prime minister, Ed Miliband, will be in charge of the UK budget and he has just answered the question, when that was put to him - will there be any cuts over the course of this parliament not just in the first financial year, but in the following financial years?

"And he was absolutely clear - there will be the need for further consolidation and cuts throughout the rest of the parliament."


By Brian Taylor, BBC Scotland political editor

Image source, Getty Images
Image caption,
United front in Edinburgh last week - Jim Murphy, Ed Miliband and Ed Balls

Jim Murphy is adamant that there is no practical distinction between the comments offered by himself and those tendered by Ed Balls. However, there is perhaps a difference in emphasis.

Mr Balls, countering Tories, talks up the rigour - alongside social justice. Mr Murphy - facing Nationalists - talks social justice and tends to play down the rigour.

To be fair to Mr Murphy, he has cited the Institute for Fiscal Studies to the effect that there might be no need for Labour to introduce "further" cuts beyond the present year, 2015/16, in order to achieve the aim of eliminating the current account deficit by the end of the next Westminster Parliament.

Note the words. Further - that is, beyond those presently scheduled. Current account - that is, not including spending for capital investment.

However, the IFS also observed that about £6bn of cuts might be required if Labour is to adhere to the more truncated timetable for balance set out in the Charter for Budget Responsibility, which the party has endorsed. The IFS note adds that "there is real uncertainty" about the path to be followed for the public finances.

The leader of the SNP, Ms Sturgeon, said Labour had admitted that if there was a Labour government there would be more cuts in Scotland.

She added: "The truth is out about Labour spending cuts. Jim Murphy's false claims in the TV debates have been rubbished by his own party bosses at Westminster, who have hung him out to dry.

"Ed Miliband, Ed Balls and Chuka Umunna have just confirmed that Labour in Scotland continue to be no more than a branch office of Westminster Labour."

Scottish Conservative leader Ruth Davidson reacted to Mr Balls' comment by saying: "Yesterday, Jim Murphy said there would be no further cuts for Scotland. Today Ed Balls has pulled him short and confirmed there would be.

"Jim Murphy has had the rug pulled from under his feet by a panicking and shambolic party which seems to have given up on Scotland."

Image source, Thinkstock
Image caption,
Ed Balls believes the levy on homes worth more than £2m would benefit Scotland

Scottish Liberal Democrat leader Willie Rennie said Labour had "very little credibility" on the economy as it wanted to "borrow far too much than is necessary".

He added: "Our plan to cut less than the Conservatives and borrow less than the SNP and Labour enables us to commit to building a stronger economy and a fairer society.

"Liberal Democrats have been first out of the blocks in setting out how we would deal with the deficit. The SNP, Labour and the Conservatives must be open with people in Scotland about what is needed to deal with the deficit fairly by 2017/18."

Labour's manifesto - which was unveiled in Manchester - commits a Labour government to what it calls a "budget responsibility lock".

This would "guarantee" that every policy is paid for without additional borrowing and would, in future, require all the major parties to have their tax and spending plans audited by the independent Office for Budget Responsibility before a general election.

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