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Matthew Hancock MP: Labour's Ed Balls still thinks you can borrow your way out of debt

Hancock Matthew DP Matthew Hancock is MP for West Suffolk.

Sometimes the debate about the economy can seem technical, full of jargon, and somehow separated from the real world. Crucial debates that will affect all our futures, for example about British exposure to Greek debt, or the size of the deficit, are conducted in abstract terms and cold figures in the billions.

Occasionally, the clouds part, and a politician says something that doesn't just have an abstract meaning, but can be translated into the direct impact on people's lives.

Frustrated at his lack of impact in the big argument about the future of our economy, Ed Balls announced that he wants to see an unfunded, open-ended VAT cut. It would add £3,000 to the national debt for every working family in the country.

Everyone knows that Labour maxed out the nation's credit card in Government. We all know that Balls was behind every one of Gordon Brown's initiatives. His personal papers released earlier this month showed that he was personally behind the doubling of the 10p tax, and he personally knew that millions of low earners and pensioners would lose out.

The astonishing thing is that Balls has not learned.

We already pay £120m as a country - over £5 per family - every day just on interest on Labour's debt. Imagine, over breakfast every morning, deciding who in the family would drop today's fiver into the black hole marked: "debt interest". That would focus minds of the spendaholics.

Yet Balls refuses to apologise for Labour's over spending, and opposes every measure to deal with it. He still thinks you can borrow your way out of debt. Now we know that if he were still in office - a ghastly thought - he would load another £3,000 of debts on working families, leaving it to our children to sort out his mess. And that's before the cost of the fiscal crisis that would hit, with the higher interest rates and collapse of confidence that would follow.

Fortunately this episode has had one positive impact. The policy attracted almost no support. Even the Labour party don't seem to support it. Ed Miliband hasn't mentioned it yet. In the Commons last week, no other Labour frontbencher has defended it. I'm sure that's not just because they weren't consulted in advance.

The very widespread opposition to Balls' idea has confirmed the broad support behind the need to deal with the deficit to generate sustainable jobs and growth. With Greece a daily reminder of what happens when you can't live within your means, this support is very welcome indeed.


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