The Kindest Cut?

The economy needs a jump start, shadow chancellor Ed Balls will argue this morning.

The way to do it, according to Mr Balls, is to make a temporary cut in tax to put cash into people's pockets thereby boosting consumer confidence.

That is the headline in his first major policy speech in this job. His argument is that there is an alternative to the government's plan for a rapid reduction in the deficit so recently endorsed by the IMF.

Mr Balls will point out that the same coalition of a Conservative chancellor backed by the man who is now the IMF's acting director insisted in the 1990s that there was no alternative to staying in the ERM and were proved disastrously wrong.

As for his party's history, Mr Balls will insist that Labour are not to blame for the deficit.