UK opposition Labour party promises fiscal responsibility

Britain's main opposition Labour party put fiscal responsibility at the heart of its election manifesto, as it sought to pull ahead of the ruling Conservatives in what is promising to be the tightest race in decades.

Party leader Ed Miliband on Monday promised to fund all his election promises without extra borrowing, attempting to tackle what many critics have said is Labour's biggest weakness and where it has trailed the opposition so far in the run up to the general election on May 7.

However, with the polls putting Labour and the Conservatives in a virtual tie with less than three weeks to voting, even if Labour wins over some Conservative voters with the promises it has laid out in its 86-page manifesto, it will struggle to win a majority. Its popularity is collapsing in Scotland, where the Scottish National party is enjoying a surge in support.

Opinion polls suggest Britain will either have another coalition or a minority government.

Mr Miliband portrayed his policies as a break from Labour's past as he set out a "budget responsibility lock" in an effort to portray Labour as a fiscally responsible party. He said there was "a clear commitment that every policy in this manifesto is paid for without a single penny of extra borrowing".

He accused the Conservatives, who have led the ruling coalition since 2010, of "throwing promises around" with no idea where the money would come from.

"You can't fund the NHS with an IOU" he said in reference to the Conservative promise to find £8bn a year extra for the National Health Service. "Every promise we make is paid for, that is the difference between the Conservative party and the Labour party."

Labour promised extra money for the NHS paid for with an annual tax on expensive properties.

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The Labour leader signalled that his commitments to cutting the deficit were non-negotiable, in effect making this a red line in any post-election deal the party might strike with the anti-austerity Scottish Nationalist party.

The Conservatives on Sunday challenged Labour to outline which taxes it intended to increase to meet pledges on deficit reduction it had already made. For its part, the Tory 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 Conservative party, which introduced a gruelling austerity programme after the financial crisis, has received a boost on economic policy thanks to the UK recovery, which has been outpacing many of its Group of Seven counterparts.

But wage growth has been weak and Labour is hoping to win voters by raising the minimum wage to £8 ($12) per hour and by banning most of the controversial zero-hour contracts, where employees only work when they are needed.

Other pre-announced pledges Mr Miliband announced were freezing energy price bills and raising taxes for the wealthiest.

The banking sector will also be reformed if Labour wins power. A British investment bank will be created help businesses grow and a threshold on a bank's share of high street business will be imposed.

The policy of freezing rail fares for a year - at the cost of £200m - will be funded by switching spending from road projects.

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