11 Sep 2012

Time for an alternative economic plan, Ed Balls tells TUC

The coalition’s economic plan has failed: now families are crying out for change. That’s the view of the shadow Chancellor Ed Balls, who’s warning the UK economy could face long term damage.

Ed Balls (reuters)

Mr Balls headed to Brighton with a grim message on the economy: unless the Government changes course, things can only get worse. The words ‘double-dip recession’ at the forefront, in the speech he will deliver to the TUC Congress.

“Living standards face the biggest squeeze since the 1920s, with prices rising faster than wages. Unemployment is high, with long term youth unemployment rising month by month”, he will tell delegates.

According to Mr Balls, a long spell of slow growith, combined with high numbers out of work, could seriously damage the economy: leaving families and businesses “crying out” for change. Young people, he will claim, are especially at risk if long-term unemployment sets in.

“Not short term pain for long term gain, but short term pain causing long term damage, as we pay a long term price for this Government’s economic failure. That is why we need action now, a change of course and a plan for jobs and growth: investing in infrastructure, building new homes, and getting young people back to work.”

We need action now, a change of course and a plan for jobs and growth. Ed Balls MP, shadow Chancellor

He will also focus on plans by Labour to tackle what he called “bogus self-employment”, especially in the construction industry: in his view, a contract which disguises an employee as self employed, thus removing their rights to things like sick pay, redundancy and holiday pay, overtime rates and pension contributions.

Labour also sees it as a way companies can avoid paying tax, because the self employed have a lower rate of national insurance, thus reducing the amount which ends up being paid to the exchequer.

“There is a careful balance to be struck.” Mr Balls will tell the TUC. “I do not want in any way to undermine genuine self-employment, but nor should contractual arrangements be distorted and misrepresented to avoid tax and undermine terms and conditions. It’s not fair to taxpayers, and it’s not fair to your members either.”

But the shadow Chancellor could face some testing questions, when he takes questions from the floor: activists are expected to quiz him about Labour’s welfare plans, as well as his support for a public sector pay freeze. Mr Balls was heckled by angry delegates when he addressed the GMB’s annual conference in June. He will doubtless be hoping for a better reception in Brighton later today.