Balls scours spending to identify cuts

The shadow chancellor is ordering each shadow ministerial team to set out how it can deliver better public services with less money and help Labour achieve a budget surplus if it takes power.

It is part of a “zero-based review” of public spending that will mean “tough but necessary” savings will have to be found as the party attempts to outline a credible economic path.

Labour is matching the spending totals set out by the coalition Government for 2015/16 but will look for ways to “switch” funding during that year to meet its policy priorities, which will be set out in the run up to the general election.

The final in-depth stage of the review, setting out cuts to be made after 2016, would take place within government once the party had its hands on the books, Labour said.

Mr Balls told the Financial Times the strategy was likely to make him “unpopular” with colleagues.

“No area is exempt – we’re going to have to find savings. It’s going to be tough but it’s really necessary,” he said.

Mr Balls accused David Cameron and George Osborne of presiding over the slowest recovery for 100 years and a cost-of-living crisis as prices continue to rise faster than wages. Failure to balance the books by 2015 meant any incoming government would inherit an £80bn deficit, he said.