Labour Party conference: Austerity to continue, warns Ed Balls as conference attacks pay freeze

SHADOW chancellor Ed Balls warned the UK’s austerity measures would continue under Labour and ruled out a “post-election spending spree”, as the party conference voted against the coalition government’s public sector freeze.

Mr Balls used his keynote speech in Manchester yesterday to suggest he would stick to the coalition government’s spending limits for the first year in power.

The shadow chancellor went on to call on Westminster to use a windfall of £4 billion from the sale of the 4G mobile phone spectrum to fund a major infrastructure programme to build 100,000 new homes to boost the economy.

Mr Balls admitted Labour would have been forced to make cuts if the party had won the 2010 general election, as well as telling the conference that he could not promise to reverse the austerity measures imposed by the Conservative-led government.

The stark warning from Mr Balls came after Ed Miliband clashed with the leader of the UK’s largest trade union over the Labour leadership’s backing for pay restraint in the public sector.

Mr Miliband said the unions would not be allowed to dominate the party, after Len McCluskey, general secretary of Unite, claimed his members were furious over the Labour leader’s stance on public sector pay.

Mr Balls, who last month told the TUC trade union conference that Labour would not reverse all the cuts, said he would “not flinch” as chancellor from further austerity measures.

He said: “Conference, as I said to the TUC, we must be upfront with the British people that under Labour there would have been cuts and that on spending, pay and pensions – there will be difficult decisions in the future, from which we will not flinch.

“Before the next election – when we know the circumstances we will face – we will set out for our manifesto tough new fiscal rules to get our country’s current budget back to balance and national debt on a downward path.

“And because we all know there can be no post-election spending spree, in our first year in government we will hold a zero-based spending spree that will look at every pound spent by government: carefully looking at what the government can and cannot afford, rooting out waste and boosting productivity.”

Meanwhile, the party backed a resolution from the Unison union that attacked the UK government’s pay freeze, claiming that “public sector workers have had their real-terms pay cut dramatically”.

The shadow chancellor also announced that he has asked the man who oversaw the successful delivery of this summer’s Olympics is to help Labour draw up plans to “rebuild Britain for the future” through building and infrastructure projects.

Olympic Delivery Authority chairman Sir John Armitt has been appointed to devise 
plans for an independent commission that would assess and make proposals for long-term infrastructure projects, such as superfast broadband, nuclear power, a renewed National Grid, wind and tidal power plants, flood defences and new rail and airport capacity.

Mr Balls said that with 119,000 construction jobs lost in two years and a 68 per cent fall in the number of affordable homes being built, there was an urgent need to kick-start the economy.