Ed Balls: Labour to extend child benefit cap to balance books

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.

Describing it as a "difficult decision", the shadow chancellor, Ed Balls, said Labour would extend the coalition's cap on increases in the benefit - due to expire in 2016 - for a further year.

Speaking before Labour's annual conference in Manchester today he said capping the rise would raise £400m.

Mr Balls said he would also be telling Labour ministers to expect a 5% pay cut if they were in government because "every Labour minister will have to be focused on value for money and the difficult decisions to get the deficit down".