A confident Ed Miliband declared he is ready to serve as prime minister having rightly been tested over the last four-and-a-half years for the privilege of leading Britain.
Speaking at the launch of the Labour manifesto, Miliband’s key promise was to unveil a “Budget Responsibility Lock” to reassure voters that Labour understands the need to stabilise the public finances.
The Labour leader said: “I am ready. Ready to put an end to the tired old idea that as long as we look after the rich and powerful we will all be OK. Ready to put into practice the truth that it is only when working people succeed, that Britain succeeds.”
At the heart of Labour’s proposition is the responsibility lock, a guarantee that Labour’s policy commitments are all funded and require no additional government borrowing. A Labour government would cut the deficit in every year and national debt will fall as a surplus is delivered on the current budget “as soon as possible in the next parliament”.
“Every promise we make is a promise we can pay for,” Miliband said, seeking to portray Labour as the party of fiscal responsibility.
Labour came under fire on a series of fronts as it left open the possibility of waiting until 2020 to balance the current budget – two years later than the coalition partners. The Tories and the Liberal Democrats have pledged to balance the current and capital budgets by 2017-18. The current budget generally covers day-to-day government spending. The capital budget covers investment in infrastructure projects.
Paul Johnson, the director of Institute for Fiscal Studies (IFS), raised questions about Labour’s fiscal plans as he said that people would not know what they were voting for. Johnson said if Labour waits until 2020 to balance the current budget it could avoid £18bn of spending cuts.
Speaking on the Daily Politics on BBC2, Johnson said: “It allows them to say: ‘Well, we would be cutting very little, but also that we would be cutting.’ But it really makes a big difference, there’s a huge difference between £18bn of cuts over the next three years and no cuts. Literally we would not know what we were voting for if we were going to vote for Labour.”
Miliband moved to pre-empt such concerns by insisting that tackling the deficit would be his main priority in office, making him more fiscally conservative than Tony Blair. “I am going into an election doing what no other Labour leader has done which is saying outside protected areas – the NHS, education, international development – spending is going to fall until the books are balanced.”
Labour was also forced to make clear that Scotland would not be exempt from spending cuts after Jim Murphy, the leader of the Scottish Labour party, suggested that Labour did not need to impose further cuts north of the border. Chuka Umunna, the shadow business secretary, told the Daily Politics: “The leader of the Scottish Labour party will not be in charge of the UK budget.”
In one of the main policy announcements in the manifesto Miliband also said that Labour would increase the minimum wage as a proportion of average earnings. “We will set new ambitions for the minimum wage. A minimum wage by 2019 reaching its highest ever proportion of average earnings, rising to more than £8 an hour, because we are determined to write the next chapter in the fight to end low pay”.
The Tories downplayed the announcement on the minimum wage, which rose from £6.31 to £6.50 in October. They said the Tories had pledged to raise it to £8 by 2020 and that Labour had always suggested it would do this by the time of the next election. The last rise in the minimum wage before the May 2020 election will be in October 2019. This suggests that the two parties may be arguing over a year’s difference in the rise.
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