UK's Labour says aims to clear deficit in next parliament
LONDON Jan 24 (Reuters) - Britain's opposition Labour Party has promised to balance the government's books - excluding investment spending - within the next parliament if it wins next year's election.
Ed Balls, Labour's would-be finance minister, will make the pledge on Saturday, setting out a binding commitment to deliver a surplus in the current budget and to get the national debt falling. The next parliament is likely to last until 2020.
"With the deficit we inherit currently set to be nearly 80 billion pounds ($132 billion) and the national debt still rising, it will be up to the next Labour government to finish the job," he will say, according to extracts of his speech released by his office on Friday.
"The next Labour government will balance the books and deliver a surplus on the current budget and falling national debt in the next parliament.
"So my message to my party and the country is this: where this government has failed, we will finish the job."
Labour leads the ruling Conservatives in opinion polls but the public consistently says it trusts Prime Minister David Cameron's Conservatives more on the economy, a verdict the left-leaning party is struggling to reverse at a time when economists are predicting Britain's economic recovery will pick up pace.
Cameron repeatedly reminds voters that the last 1997-2010 Labour government left Britain with a budget deficit equivalent to 11 percent of gross domestic product, the country's biggest peacetime deficit.
Labour says its plans were blown off course by the 2007/8 global financial crisis and that it can deliver "iron discipline" if re-elected.
"Without fiscal discipline and a credible commitment to eliminate the deficit, we cannot achieve the stability we need," Balls will say.
"But without action to deliver investment-led growth and fairer choices about how to get the national debt down while protecting vital public services, then fiscal discipline cannot be delivered by a Labour government - or, in my view, by any government."
Balls' intention of tackling the deficit in the government's current account - which includes spending on things such as welfare and public services - is less aggressive than a plan by finance minister George Osborne.
Osborne wants to wipe out the deficit in overall government spending, including investment spending.
Labour has made increased investment spending a core part of its economics policies, vowing to build more homes and infrastructure.
Balls will say that Labour would abolish the "discredited idea" of rolling five-year fiscal targets and push for "tough fiscal rules" within 12 months of the election in May 2015.
He will also say that a Labour government would use the proceeds from the sale of the state's stakes in Lloyds and RBS banks to help repay the national debt.