1. ITV Report

Shadow Chancellor issues plea to coalition over economy

Shadow Chancellor Ed Balls has said he wants to join forces with "sensible people" in government. Photo: Dominic Lipinski/PA Wire/Press Association Images

Ed Balls issued a fresh appeal to Business Secretary Vince Cable to work with Labour on a Plan B for the economy today as he sought to exploit coalition tensions.

The shadow chancellor said he wanted to join forces with "sensible people in the Government" - singling out the senior Liberal Democrat and giving renewed backing to the "mansion tax" championed by Mr Cable.

His article in the Sunday Mirror came a day after opposition leader Ed Miliband said he was in regular text message contact with the Business Secretary and was "open for business" for joint working in the future.

Deputy Prime Minister Nick Clegg yesterday dismissed claims that his party colleague, tipped by some to lead the party into the 2015 election, was being courted by Labour as "ridiculous" and "schoolboy politics".

No matter how bad things get, David Cameron, George Osborne and Nick Clegg are desperate to cling on to their failing economic plan - putting their political pride above the long-term interests of the country.

But the country cannot afford to wait until the next election before we get a change of course. Because the longer ministers refuse to act, the more long-term damage will be done to our economy.

That's why I want to work with other parties - including sensible people in the Government - on a new economic plan. In his heart of hearts... Vince Cable must know that Plan A is not working.

After all, before the last election, he warned - with Labour - that David Cameron and George Osborne's policies would backfire.

And sadly our warnings came true. So let's work together on new ideas to create jobs and build our way out of recession.

– Ed Balls, Shadow Chancellor
Business Secretary Vince Cable's department has been bolstered by two new additions. Credit: Tim Ireland/PA Wire/Press Association Images

Mr Balls' latest intervention came as one of the two new Tory ministers moved into Mr Cable's department in Prime Minister David Cameron's reshuffle called for an end to the "politics of envy" that sought to tax wealth.

In what will be seen as a shot across the bows of the Business Secretary, Michael Fallon said it was vital to "salute" wealth creation "and stop thinking of new ways to tax it".

And he told the Sunday Telegraph that he would champion the scrapping of up to 3,000 regulations, the complete sell-off of the Royal Mail and moves to make it easier to sack underperforming staff.

The installation of Mr Fallon and close George Osborne ally Matthew Hancock under Mr Cable was regarded as a bid to restrain the senior Lib Dem, regarded by some Tories as being anti-business.

Mr Fallon denied that was the case, telling the Sunday Telegraph: "I'm not there to keep an eye on Vince Cable, I'm there to keep both eyes on growth."

But he signalled that he would push traditional Tory values in his new role, including radical changes to employment law such as a "no-fault dismissal" proposal opposed by Mr Cable.And he appeared to challenge Liberal Democrat calls for a new wealth tax.

We need to salute that and stop thinking of new ways to tax it - that kind of wealth creation. That's an attitude I want to help change," he told the newspaper.

We need to get away from the politics of envy in this country and salute those who not only create wealth but risk their own money to create jobs for other people.

Above all I want business to feel it has a strong Conservative champion in the department.

– Michael Fallon, Conservative MP
Conservative MP Michael Fallon has said it is vital the coalition support wealth creation. Credit: Yui Mok/PA Wire/Press Association Images

The installation of Mr Fallon and close George Osborne ally Matthew Hancock under Mr Cable was regarded as a bid to restrain the senior Lib Dem, regarded by some Tories as being anti-business.

A motion to be debated at the Liberal Democrat conference, in a debate led by Treasury Chief Secretary Danny Alexander, will level serious criticism at Tory efforts to water down employee rights.

It complains of "irresponsible calls for policies with no clear evidence of effectiveness, such as introducing no-fault dismissal, where the evidence suggests this would weaken confidence further".