Labour seeks to narrow gap on public spending

Ed Miliband will on Monday put public finances at the heart of Labour's election manifesto as he attempts to secure a breakthrough in deadlocked polls by tackling his party's main weakness head on.

The Labour leader will guarantee that all manifesto commitments will be funded without additional borrowing, while also promising to cut the deficit every year.

The pledge comes in a crucial week of the election campaign, as both Labour and Conservative parties attempt to shift the polls in their favour in what is shaping up to be the most unpredictable election of a generation.

With just over three weeks to go until polling day, Labour figures acknowledged the party would struggle to close the Tories' 20-point lead on economic policy. But they believe the manifesto launch could go some way to at least "neutralising" the issue in the minds of voters.

As Labour looks to shore up its economic credibility, Mr Cameron will try to inject some "sunshine" into his campaign on Tuesday when he launches the Tory manifesto, reportedly rewritten in recent days to present a more optimistic tone.

With opinion polls refusing to budge, the prime minister has thrown in a number of unfunded promises - £8bn a year to the NHS by 2020 and a rail fare freeze - in an attempt to show a softer Tory side.

The Conservatives came under more fire on Sunday after the Institute for Fiscal Studies warned that a pledge to end inheritance tax on homes worth up to £1m would disproportionately benefit richer people.

Mr Miliband will pitch his offer as a break from Labour's past as he sets out a "Budget responsibility lock" in an effort to portray Labour as a fiscally-responsible party.

"The very start of our manifesto is different to previous elections. It does not do what most manifestos do. It isn't a shopping list of spending policies," the Labour leader will say.

"It does something different: It's very first page sets out to avow to protect our nation's finances; a clear commitment that every policy in this manifesto is paid for without a single penny of extra borrowing."

<

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

The Conservatives on Sunday challenged Labour to outline which taxes it intended to increase to meet pledges on deficit reduction it had already made, and what it would be willing to trade to secure support from the SNP, which is tipped to win up to 50 seats in the election.

"It's clear Labour's manifesto will be a dangerous cocktail of higher taxes and more debt that will cost jobs and cut incomes," said George Osborne, the chancellor, ahead of Mr Miliband's manifesto launch.

"Labour must now answer two questions: Which taxes are they planning to increase to pay for it? And what is Ed Miliband willing to trade in the event he needs to be propped up by the SNP?"

The Conservative party has committed to £25bn of spending cuts to eliminate the current structural deficit by 2017-18.

Labour has yet to outline specific plans on how it will deliver its promise to get national debt falling and a surplus on the current budget by the end of the next parliament.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation