Shadow Chancellor Ed Balls says he would use any profit from selling the state’s share in banks to pay off the national debt.
Speaking on the BBC Radio 4 Today programme, Mr Balls also apologised for the last Labour government’s record on the economy, saying: “The banking crisis was a disaster. All around the world the banks behaved irresponsibly, but regulation wasn’t tough enough. We were part of that.
“I’m sorry for that mistake, I deeply, deeply regret it.”
Mr Balls will seek to restore public confidence in Labour’s economic competence by telling the party’s conference that he can make no promises to reverse the coalition’s cuts or tax rises.
We can’t make promises now to reverse the cuts. Ed Balls
In a move that may anger rank-and-file members and unions campaigning against cuts in public services, Mr Balls will say that, almost four years ahead of the expected date of the general election, Labour cannot make pledges to restore spending slashed by the government.
And he will seek to allay voters’ fears that a future Labour government might drive the deficit back up, by promising to submit the party to tough new rules requiring it to keep debt down.
The rules, which would bar a future Labour chancellor from allowing the national deficit to swell as it did under Gordon Brown, will be included in Labour’s manifesto for the next general election and will be subject to monitoring by the independent Office for Budget Responsibility, Mr Balls will say.
The shadow chancellor will also promise to use any profits from the sale of the state share in RBS and Lloyds to help pay off Britain’s debts, rather than to fund a pre-election give-away to voters, as he says Conservatives and Liberal Democrats would do.
The move would echo Mr Brown’s decision in 2000 to use £22.5bn from the sale of third-generation (3G) mobile phone licenses to pay off debt.
Speaking ahead of his keynote speech Mr Balls made clear he will resist activists’ demands to reverse public sector spending cuts.
He told The Independent newspaper: “No matter how much we dislike particular Tory spending cuts or tax rises, we can’t make promises now to reverse them.