Balls seeks the biggest U-turn of all

By staff

David Cameron and George Osborne should apply their U-turning logic to their deficit reduction plans, Ed Balls has said.

High-profile policy reversals in the last two weeks on NHS reform and sentencing discounts have seen the prime minister argue that thinking again is a sign of strength, not weakness.

The coalition remains determined not to slow down the pace of its deficit reduction programme.

But shadow chancellor Mr Balls, writing for the Labour List blog, argued that Mr Cameron's logic should be applied to the biggest issue facing the government, the economy.

"The Conservative-led government does not yet seem willing to apply this principle to the economy – insisting that any change of course would be disastrous, even when the evidence is growing that their plan isn’t working," he wrote.

Today is the first anniversary of Mr Osborne's emergency Budget, which implemented the first phase of the spending cuts now underway.

"Twelve months on the economic recovery has been choked off with zero growth over the last six months while other countries race ahead, the VAT rise has helped to push up inflation to more than double the government's target rate, consumer confidence has fallen and manufacturing output and retail sales both fell last month," Mr Balls added.

"By trying to cut the deficit too far and too fast the government now seems to be creating a vicious circle in our economy."

Mr Osborne has insisted the government does not have a 'plan B' for dealing with the deficit. Some organisations like the Institute for Fiscal Studies have backed his approach, but others like the Organisation for Economic Cooperation and Development have suggested he slow down the pace of cuts.

The chancellor is unlikely to respond to Mr Balls' calls. In Treasury questions in the Commons yesterday he told Mr Balls, referring to the situation in Greece: "On a day like this, in a week like this, for the other side to be saying we abandon our credible deficit reduction plan shows how out of touch they are with what is going on in the world today."