Interest rates could rise “prematurely” because the Government has failed to build new homes quickly enough, shadow chancellor Ed Balls claimed today.
In the latest Labour summer campaign speech he said Britons had suffered the worst fall in real wages for more than 100 years and that a rise in loan rates would deepen austerity.
The shadow chancellor made his speech in Bedford, where ex-prime minister Harold Macmillan delivered his famous “you’ve never had it so good” speech in 1957.
Mr Balls said many modern Britons had never had it so bad. “Even before living standards have stopped falling, this Government’s failure to get more houses built means there is now a real risk that interest rates will rise prematurely to rein in an unbalanced housing market,” he claimed. New figures from the Commons library said that by the time of the general election next May average earnings after inflation will have seen the biggest drop of any parliament since 1874-80.
Mr Balls claimed average earnings were down £1,600 in real terms since 2010, and went on: “From a Conservative-led Government that promised to make working people better off back in 2010, this is a dismal record of failure.”
Earlier Mr Balls seized on reports that senior Tory Oliver Letwin had predicted a debate about a flat rate of tax. The shadow chancellor said that would mean a “massive” tax rise for working people.
“A Labour government will not do that,” he said. “[The Tories] are obviously thinking of it.”
Tory Treasury minister Priti Patel countered that Labour was planning to raise spending by an extra £17 billion, which would mean tax hikes.
Labour is banking on the squeeze in family budgets to make voters turn away from the Conservatives, despite the return of economic growth.
The IMF has forecast that growth in Britain will be faster than any other advanced economy.
