Ed Balls has called for the government to immediately reinstate the bank bonus tax and use the proceeds to invest in housing and jobs for young people as part of a five-point plan to stimulate economic growth.
In his speech to the Labour Party conference in Liverpool, the shadow chancellor said the government’s plan to reduce the deficit was “hurting but not working” and that the government should immediately adopt five measures aimed at stimulating growth.
Mr Balls said the government should reintroduce the previous Labour government’s bank bonus tax, with the proceeds used to fund 25,000 affordable homes and guarantee a job for 100,000 unemployed young people. “It can’t be right to be cutting taxes on the banks when almost one in five young people are now out of work,” he said.
He criticized the coalition government for scrapping the Future Jobs Fund - a job creation programme for young unemployed people - as well as scrapping the regional development agencies, ending the educational maintenance allowance, and cutting childcare tax credits for working parents - moves he described as “Tory mistakes” that were “reckless, ideological and unfair”.
Mr Balls also called for the government to bring forward long-term investment projects, such as schools, roads and transport “to get people back to work and strengthen our economy for the future”.
He added the government should also announce an immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance in order “to help homeowners and the many small businesses that are so dependent on the state of the housing market”.
Other measures the government should introduce included a one year national insurance tax break for every small firm which takes on extra workers, using the money left over from the government’s national insurance rebate for new businesse, and the reversal of January’s VAT rise “for a temporary period”, which he said would provide a £450 boost for a family with two kids and “immediate help for our high streets and for struggling families and pensioners too”.
Mr Balls also praised Labour-led councils across the country for “working night and day to make savings and cut bureaucracy so they can protect jobs and keep services for the most vulnerable”.
“I say to Liverpool’s Labour leader Joe Anderson - to all our leaders in local government facing difficult times across the UK … we pay tribute to your leadership and responsibility and determination that there can be a better way”.