Labour faces "a big task" to regain economic credibility and win back public trust, Ed Balls is set to admit in a speech.
In a high-profile speech setting out what he terms the "economic alternative" to the coalition Government, the shadow chancellor will acknowledge that Labour should have been "clearer" before the 2010 general election that it would impose spending cuts and tax rises if re-elected.
And he will repeat his message that the party cannot make any commitments now to reverse coalition cuts or tax hikes if it returns to power.
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| Ed Ball want to regain trust with the electorate |
Chancellor George Osborne's economic policy threatens Britain with "a decade of stagnation", Mr Balls will warn in a speech to the Fabian Society in London. Labour must offer an economic alternative which meets the twin challenges of boosting growth now through temporary tax cuts and investment in jobs and delivering reform over the longer term to build "responsible capitalism".
But he will caution: "To make that alternative work and be credible, it must be underpinned by a clear commitment to balanced but tough spending and budget discipline now and into the medium term.
"However difficult it is for me, for some of my colleagues and for our wider supporters, we cannot make any commitments now that the next Labour government will reverse tax rises or spending cuts. And we will not."
Labour's five-point plan for a temporary VAT cut and investment in jobs is needed to "stop a decade of slow growth and higher debts becoming a self-fulfilling prophecy", Mr Balls will say.
"Action now for growth, jobs and reform does not conflict with the need for a credible medium-term plan on the deficit, it reinforces it," he will argue.
This must be coupled with "long-term reform to ... build a stronger and fairer economic model for the future - what Ed Miliband has called a more responsible capitalism - which can, even in tougher times, meet our aspirations for social justice and strong public services", he will say.
But he will acknowledge that setting out an alternative to the coalition's economic policy is not enough, and that Labour must also overcome the electorate's doubts over its economic credentials.
