Labour's Chuka Umunna promises 'balanced' recovery

Chuka Umunna says Labour is "up to the challenge" of dealing with the deficit

Labour has warned against a policy of "permanent austerity", pledging to create more middle-income jobs and ensure a "balanced" economic recovery.

Shadow business secretary Chuka Umunna also said the UK risked "shutting" itself off from Europe, as he outlined his party's plans.

In a speech, he promised to stick to spending plans, but said the deficit was not "the most important challenge".

But the Conservatives said Labour had no "serious plan" for the economy.

Mr Umunna told the annual dinner of the EEF manufacturers' organisation that the approach of the Conservatives has been "disastrous for Britain".

He said: "That is the only way that we will tackle the cost-of-living crisis and make sure that any recovery benefits all working people, and not just a few at the top."

'Huge threat'

He reiterated shadow chancellor Ed Balls's commitment that there would be no extra borrowing in 2015-16 if Labour wins the next general election.

Mr Umunna added: "Rest assured that we understand the challenge in respect of the public finances. But reducing the deficit is neither the only economic challenge we face, nor - in the longer term - the most important.

"Permanent austerity is not what our economy needs in order to grow. To some it may be an ideological choice, but it is not an economic policy."

He said Conservative ministers were "intensely relaxed, even enthusiastic" about the prospect of leaving the European Union, adding: "That would be disastrous for Britain. You simply cannot claim to be pro-exports if you are anti-EU. Shutting ourselves off - as they suggest - poses a huge threat to our future prosperity."

He also said: "Rest assured that we understand the challenge in respect of the public finances. And we are up to it. But reducing the deficit is neither the only economic challenge we face, nor - in the longer term - the most important.

A Conservative spokesman said: "Our long-term economic plan is working but all Chuka Umunna can offer is the same old Labour prescription of more spending, more borrowing and more taxes.

"They don't have a serious plan to deal with the deficit and they don't have a long-term plan to build a stronger, more competitive economy for Britain.

"It's hard-working people who would pay the price with a less financially secure future."