There is a real risk that George Osborne would have to break his promise to protect NHS spending, start charging for healthcare or raise VAT if the Conservatives hold on to power, Labour’s Ed Balls has said.
As he published a dossier about the Conservatives’ spending plans, the shadow chancellor said the scale of cuts they implied was so “extreme and risky” that the plans would be almost impossible to carry out.
An analysis undertaken by Labour found that the Tory plans would mean £70bn of cuts to public spending in the next parliament – more than double the amount admitted to by David Cameron and George Osborne.
Balls said such proposals would entail a police force smaller than the level when records began in the 1970s, an army of a size not seen since the days of Oliver Cromwell, and a quarter of a million older people losing their social care.
He called on Osborne and David Cameron to spell out how these improbable cuts would be achieved or admit they could have to charge for the NHS, slash health spending or raise VAT.
He said that since 1945 only seven countries in the developed world for which there was available health spending data had attempted reductions on the scale of Osborne’s plans. Across these examples, public spending on healthcare had been cut on average by 1% of GDP.
“This is the implication of the choice that George Osborne made last December, and which he is now trying to brush under the carpet,” Balls said. “If he is to deliver on his autumn statement plans for a £23bn overall budget surplus, as he says, through a budget with no fiscal loosening, while promising unfunded tax cuts in the next parliament, then he is going to have to deliver these colossal cuts.
“The evidence is clear: countries which reduce public spending at the pace George Osborne intends have found they have had no alternative but to cut health spending.”
Balls said Labour’s plans in contrast would involve “sensible” spending cuts in non-protected departments. He said Labour’s goal was to cut the deficit every year and balance the books – with a surplus on the current budget and national debt as a share of GDP falling – as soon as possible in the next parliament.
However, he shied away from giving a ratio of cuts to tax rises, or saying exactly how Labour would meet its spending reduction targets.
The shadow chancellor said two examples of his planned cuts were taking away winter fuel payments from the richest 5% of pensioners and capping child benefit rises at 1% for two years. Other efficiency savings had been set out in the party’s “zero-base review”, he added.
Asked whether he was scaremongering about the Conservative plans, Balls said Labour’s warnings about Tory plans to close Sure Start centres, raise VAT and reorganise the NHS had come true after the last election.