Ed Balls: Labour would cap rise in child benefit

Families receiving child benefit would continue to see the value of their payments fall in real terms for the first two years of a Labour government. Ed Balls would extend the coalition's cap on increases in the benefit - due to expire in 2016 - for a further year. The shadow chancellor will announce the policy in a speech to Labour's annual conference in Manchester. The move is part of a package of measures aimed at proving Labour is serious about "balancing the books". Under Mr Balls' plans, child benefit payments would not rise in line with inflation but by a fixed rate of 1% per year until 2017. The policy is already in place until 2016, having been announced by the coalition, but Labour's move would see it continue for another year. Mr Balls will also announce plans for a 5% pay cut for government ministers with their pay to be frozen until the deficit has been cleared. 'Tough decisions' "The next Labour government will get the deficit down," he will tell Labour delegates. "And Ed Miliband and all my shadow cabinet colleagues are clear it will mean cuts and tough decisions and we will take the lead." Labour has repeatedly criticised the coalition government's benefit cuts, including Mr Osborne's decision to remove child benefit for higher earning households, which Mr Balls said in 2013 created "huge unfairness". But he will say in his conference speech that Labour will not be able to reverse most of the cuts and will have to introduce some of its own. He will say: "We will have to make other decisions which I know will not be popular with everyone. "At a time when the public services that pensioners rely on are under such pressure, we will stop paying the winter fuel allowance to the richest 5% of pensioners. "I want to see child benefit rising again in line with inflation in the next parliament, but we will not spend money we cannot afford. "So for the first two years of the next parliament, we will cap the rise in child benefit at 1%. It will save £400m in the next Parliament. And all the savings will go towards reducing the deficit." Mr Balls says Labour would balance the books in a "fairer" way than the Conservatives because they would reinstate the 50% top rate of income tax. "Now cannot be the right time to give the richest one per cent of people in the country a £3bn tax cut. So as we get the deficit down in the next parliament, the next Labour government will reverse this Tory tax cut for millionaires. "Because Labour will balance the books in a fairer way." Devolution row Labour used the first day of its final conference before the general election to unveil plans to increase the minimum wage to £8. But that was overshadowed by an ongoing row about English devolution in the wake of Scotland's No vote in Thursday's independence referendum. Mr Balls will attempt to shift the focus back on to Labour's economic policies - an area which the polls say Labour lags behind the Conservatives. The Conservatives accused Mr Balls of making unfunded spending commitments - on policies such as its jobs guarantee for young people, which Labour says will be paid for by a tax on bankers' bonuses. They said the shadow chancellor's plan to cut ministerial pay would only amount to 0.003% of the deficit. Mr Balls was in a cuts controversy of a different kind on Sunday, when he accidentally elbowed a journalist in the eye during a charity football match. --source BCC