£85bn cuts and tax rises in budget!

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Trade unionists rally in Trafalgar Square to defend the welfare state on April 14
Trade unionists rally in Trafalgar Square to defend the welfare state on April 14

Labour leadership hopeful Ed Balls yesterday accused the Tories of wanting to take Britain back to the conditions of the 1930s.

Trade unions are bracing themselves for £85bn of cuts and tax increases in tomorrow’s Budget, with savage attacks being especially levelled at public sector pay, jobs and pensions.

Unison general secretary Dave Prentis has warned the union will ballot for national strike action over any attack on public sector pensions.

The Tories plan to raise VAT to 20 per cent, freeze public sector pay for a number of years, cut public sector pensions, child and working tax benefits and force the unemployed and disabled onto workfare or face sanctions.

Public and Commercial Services union general secretary Mark Serwotka said yesterday: ‘It is a disgrace that the coalition government plans to target low paid public sector workers and those receiving welfare benefits.’

Balls told the Andrew Marr BBC TV Show yesterday that ‘it’s a profound mistake’ to ‘start cutting the deficit faster this year’.

He added that ‘it’s a huge mistake. . . but the priority has got to be growth and jobs.’

He warned: ‘I fear that what’s happening is we’re making the mistake of the 1930s – the mistake of thinking that cutting the deficit, even if that means putting growth and jobs at risk, is a priority.’

Balls stressed: ‘It’s not just the callousness of the cuts which are being proposed, or the unfairness of a rise in VAT.

‘It’s the fact that it would undermine recovery and jobs and, therefore, make it harder to reduce the deficit.

‘There was a phrase which Keynes used in 1936 when he wrote The General Theory about “madmen in authority listening to voices in the air”.

‘These voices are back and they’re saying cut, cut, cut, and it’s profoundly misguided.’

Asked ‘do you think we could go back to a 30s-style recession?’ Balls warned, ‘It is very, very dangerous.’

He continued: ‘If you look at what’s happening in Europe at the moment, you’ve got deflationary policies being pursued in other European countries.

‘You’ve got President Obama and the American Finance Minister Tim Geithner saying be very careful, Europe.

‘We now in Britain are going down that road. And we’ve just heard George Osborne brought in Norman Lamont, Geoffrey Howe, Nigel Lawson.

‘The people who gave us the deflation and the unemployment of the 1980s are now advising him to do it again.’