Tackling the deficit

Our manifesto begins with the Budget Responsibility Lock we offer the British people. It is the basis for all our manifesto plans because it is by securing our national finances that we are able to secure the family finances of the working people of Britain.

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The next Labour Government will balance the books. We will only lay a Budget before the House of Commons that cuts the deficit every year, which the Office for Budget Responsibility will independently verify. We will get national debt falling and a surplus on the current budget as soon as possible in the next Parliament and these fiscal commitments will not be compromised. We will tackle the root causes of the deficit by building a more productive economy with living standards that rise year-on-year.

The Conservative-led Government promised to balance the books in this Parliament. But this promise has been broken. The Conservatives will leave the country borrowing over £75 billion this year. The slowest economic recovery in over a hundred years has not only led to a cost-of-living crisis, it has meant the Tories have failed to get the deficit down too.

Labour’s plan to balance the books means making tough, but fairer choices. We will reverse the Government’s top-rate tax cut so that the highest one per cent of earners, with an income of over £150,000, contribute a little more to help get the deficit down. We will stop paying Winter Fuel Payments to the richest five per cent of pensioners, and cap child benefit rises for two years. Outside of the protected areas of health, education and international development there will be cuts in spending. Ministerial pay will be cut and then frozen until we have balanced the books. All proceeds from the sale of our stakes in Lloyds and RBS will be used to repay the national debt.

We will live within our means. We have no proposals for any new spending paid for by additional borrowing. All of our commitments will be paid for by reducing spending elsewhere or by raising extra revenue. For example, we will introduce a tax on properties worth over £2 million to help raise the £2.5 billion a year for an NHS Time to Care Fund – part of our plan to save and improve the health service. We will legislate to require all major parties to have their manifesto commitments independently audited by the Office for Budget Responsibility at each general election.

We will cap structural social security expenditure in each spending review so that it is properly controlled. We will implement the proposals of Labour’s Zero-Based Review, which has already identified savings we will make through reforming old government bureaucracies, devolving power and services to our towns and cities, and redesigning public services, and which we will continue in government. We will invest to prevent social problems rather than waste money reacting to them. And we will use digital technology to create a more responsive, devolved, and less costly system of government.

See also: Labour's Better Plan for Prosperity in the North East

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