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Ed Balls: No Cut In Spending Despite Soaring Debt

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Ed Balls: no cut in spending despite soaring debt

Gordon Brown has rejected warnings about the scale of the public debt and will press on with high levels of spending through the recession, the Prime Minister's closest ally said.

Ed Balls, the Children's Secretary who Mr Brown is thought to want as his chancellor, defied suggestions from the Governor of the Bank of England that immediate action was required over soaring levels of public borrowing.

He even held out the prospect of increased spending on front line services such as schools and hospitals, and indicated for the first time that the police may also be protected from the cuts which many commentators believe are now inevitable after the election given the state of the public finances.

The disclosure that ministers have little intention of reigning back on spending in the short term came as the Centre for Economics and Business Research warned that public spending was set to rise to 50 per cent of gross domestic product by the end of the next financial year.

Alistair Darling, who narrowly avoided being replaced as Chancellor by Mr Balls in this month's reshuffle, was said to be planning to shield the true condition of the economy from the public in the run-up to the election by cancelling the Comprehensive Spending Review, the Treasury's biennial economic report card.

The last CSR was in 2007, but Mr Darling is said to feel that detailed forward-planning on the economy was impossible while the full impact and extent of the recession remained unclear.

The Conservatives accused the Government of performing a U-turn over the CSR, and claimed that ministers were failing to tackle a growing black hole in the public finances.

Last week, Mervyn King, Governor of the Bank, gave warning that the country was experiencing: ``An extraordinary level of public debt, which would require some pretty extraordinary things to be done''.

A poll for The Daily Telegraph at the weekend showed that three-quarters of voters believe that spending cuts would be necessary in the next few years in order to balance the economic books.

David Cameron, the Tory leader, last week accused Mr Brown of misleading the public over spending cuts, saying that Treasury figures showed capital expenditure would fall after 2010.

The CEBR calculated that government expenditure would rise to 50 per cent of GDP by 2010/11, up from 41 per cent in 2007/8.

Interviewed on the BBC's Andrew Marr Show, Mr Balls admitted that government departments would need to be "defter and smarter" in their spending decisions in future years, but added: "We must ... also sustain our increases in investment in public services.

"I think if we are deft and we get the economy right, we can keep investing in schools and hospitals, in our police at the frontline, keep the money going up

"Of course we'll wait and see what happens to the economy. We are doing the right thing to get us through a downturn, so that the growth will be stronger, we'll have fewer people unemployed, and we will be able to continue ... our investments in frontline public services. That is the right thing to do."

The Children's Secretary said that the decision over whether to spend or cut Britain out of the recession would be the major point of difference between the two main parties at the next election.

He went on: "That is the fundamental choice in politics. We're within a year of an election, we must set out the difference between the parties in values, in judgements and in priorities.

"We have very different priorities between Conservative and Labour on spending and tax and we should set that out.

"We've been very clear that government must act to get us through the downturn and do it fairly.

"David Cameron and George Osborne [the shadow chancellor] say we shouldn't be acting, and they want to do tax cuts, which to be honest I think are hugely unfair and will be paid for in police and hospitals and schools being cut if you had a Conservative government."

Philip Hammond, shadow chief Treasury secretary, said that a Tory government would ``get on with job'' by bringing forward to 2010 the cuts he said Labour was delaying until 2011 and make the public services more "effective".

He accused the Government of attempting to hide the truth from the public by scrapping the CSR, adding: ``If they are now U-turning on that, that suggests that they have got something to hide.''

Vince Cable, the Liberal Democrat Treasury spokesman, added: "This is exactly the time where we do need a review of public spending."

And a tidbit from MEP Daniel Hannan:

Britain and America are drowning in debt

Now here’s the really bad news. Gordon Brown is spending more, per capita, than Barack Obama. Obama, as his conservative critics are quick to point out, will borrow more during his presidency than all 43 of his predecessors. But Gordon Brown will borrow more in the next two years than in the whole history of our national debt, since it was instituted in 1693.

I am sorry to inform you loyal Labour voters Gordon and Ed are complete fvcking liars and are wreaking havoc on the nations welfare, and dutifully destroying it's future.

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