Labour shadow chancellor Ed Balls rips into the Coalition’s “failed plan” in the Times today (£).

‘You can’t borrow your way out of a debt crisis.” That is the simple mantra we have heard from the Prime Minister week after week. The Government took it as read that deep and immediate spending cuts and tax rises would at least serve the goal of deficit reduction — no matter how much Labour warned that going too far, too fast would be bad for borrowing as well as for jobs and growth.

So while the scale of borrowing set out in last week’s Autumn Statement is certainly a challenge for Labour, it is a jarring setback for the Government. Far from reducing the deficit as promised, it is now set to borrow £158 billion more than planned.

He says the government has overseen a massive dive in growth thanks to a fall in consumer and business confidence, a rise in VAT, fall in public sector demand and the fear of rising unemployment.

And what would Labour say in response? He nails the argument:

This autumn, many young people who would otherwise have stayed on at school have lost their education maintenance allowance and — after the abandonment of the Future Jobs Fund — many more have gone straight into unemployment, contributing to the one million young people out of work.

On the surface of things, cutting EMAs and the Future Jobs Fund saved money and reduced borrowing. But how much more will it cost our society and economy to leave those young people unemployed and unproductive, receiving benefits rather than contributing to the national wealth?

And this is the simple argument: if we let a year of flatlining become a decade of stagnation, what price will our country pay in the long term? That is why I believe it makes sense to act now with temporary tax cuts and investment in jobs and growth to save ourselves from the future bills of failure.

He also says the next Labour manifesto will have a commitment to to use any windfall gain from the sale of stakes in RBS and Lloyds to repay the national debt.

He also says we will need “long-term reforms of our economy” to deliver social justice in straitened times.

Reader comments

1. Liberal Conspiracy

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2. Beverley Clack

   Ed Balls rips Tory 'failed plan' in the Times http://t.co/uhXlW4pp

3. Doug James

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4. Lauren Pang

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5. Edward Clarke

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6. Simon

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7. StarSparkle

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8. Gus Hoyt

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9. Genevieve Flight

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