A confidential document presented to the Cabinet in January 2006 asks: "We've spent all this money, but what have we got for it?"
It warns that the efficiency of the public sector needed to improve rapidly and insisted that "spending growth will slow". The document drafted by civil servants also says that "ineffective spending" must be "closed down".
However, Gordon Brown discarded the advice and embarked on a £90 billion increase in spending when he became prime minister.
The expenditure meant that the economy was left facing a record deficit as the effects of the recession were felt.
The document is among 19 papers disclosed today by The Daily Telegraph that were obtained from the personal files of Mr Balls, the shadow Chancellor. They follow the divulgence yesterday of dozens of documents detailing Mr Balls's central role in a plot to topple Tony Blair.
Today, the Ed Balls files make public the warnings of officials and others over Labour's tax and spending plans.
The document is the first official evidence that shows the scale of concern over the activities of Mr Brown and those around him in his time as chancellor. In an analysis of spending plans drawn up in January 2006 for the following year's Comprehensive Spending Review, the document states that any increase in taxpayer expenditure should only be in line with inflation. It sets out detailed plans for cutting spending in more than 12 areas to reduce spending by billions of pounds.
However, Mr Brown neglected the advice and increased spending by twice as much as recommended. He only cut the wasteful spending in four of the areas identified.
At the time that the Treasury document was produced, Mr Balls was still a backbench MP and would not have been on the official circulation list.
However, other files show he was playing an important role in drawing up Mr Brown's policies. Before the October 2007 spending review he was made a Treasury minister then given a Cabinet seat as Secretary for Children, Schools and Families.
The Coalition seized on the disclosures as evidence that Mr Brown's "reckless" decisions over public spending left the country in a vulnerable position when the economic downturn hit Britain.
A Conservative source said: "This document shows the reckless approach of Brown and Balls which left Britain dangerously exposed to the economic crisis."
Michael Fallon, the deputy chairman of the Conservative Party, said: "As recently as last year, Ed Balls and Ed Miliband were denying something we now know to be true. While Britain's debt doubled, welfare spending spiralled out of control and education standards fell, they were obsessing about getting rid of the elected prime minister and putting Gordon Brown into the position.
"Instead of owning up to their role in a dysfunctional government and coming up with a credible plan to deal with the problems facing Britain, they are starting to plot against each other. They can never be trusted with government again."
Another leaked memorandum warns Mr Brown and Mr Balls that plans to scrap the 10p tax rate would hit millions of poorer Britons and pensioners - but the change was still introduced.
Mr Brown later denied that there would be any losers from the tax changes – before being forced to announce an emergency compensation plan.
The Daily Telegraph also publishes documents today revealing how Mr Brown's major policy idea to be introduced when he was Prime Minister was a new British constitution. Detailed plans for the bill of rights were prepared, including possible new regulations for the media, but the proposal was quietly dropped after he moved into Number 10.
The disclosure of the economic documents in the Ed Balls files comes as the shadow chancellor demands that the Coalition abandons its public spending cuts. Mr Balls has said that the pace and scale of cuts is unacceptable. Last week, Mr Balls demanded that George Osborne, the Chancellor, draw up a "plan B" for public spending if the economy deteriorates.
But, Ed Miliband, the Labour leader, is understood to privately believe that some of the cutbacks should be accepted – threatening a repeat of the divide between Mr Blair and Mr Brown over public spending plans.
Yesterday, Alistair Darling, the former Chancellor, gave an interview in which he dismissed the wisdom of Mr Ball's "plan B" concept. Mr Darling is currently finalising his memoirs which are also expected to criticise Mr Balls' influence over economic policy under Mr Brown's premiership.
Yesterday, in the wake of The Daily Telegraph's disclosures over his role in plotting to replace Mr Blair with Mr Brown, the shadow Chancellor denied he had acted improperly.
Mr Balls also effectively accused Mr Blair of lying to the electorate in 2005 about his intention to serve a full third term as prime minister.
Labour began discussing the "transition" from Mr Blair to Mr Brown even before the 2005 general election, Mr Balls claimed.
Mr Blair fought and won the 2005 election on a promise to serve a full third term in office. In 2004, he declared: "If I'm elected I would serve a third term. I want to see it through."
But, in a radio interview, Mr Balls alleged that talks between Mr Brown and Mr Blair about a transfer of power began before the election.
"The discussions about how to make that transition work began before the 2005 general election," he said.
He was asked: "Even though publicly Mr Blair had said he would serve a full third term, he wasn't saying that privately?"
Mr Balls replied: "Yes."
The claim was last night disputed by friends of Mr Blair. One said: "Ed is basically saying Tony deceived the British public at the 2005 election. That is not true."
Mr Balls has previously denied any involvement in any plot – which this newspaper disclosed was codenamed "Project Volvo" because of Mr Brown's reliable but dull image - to force Mr Blair from office.
Yesterday, he said he had taken part in "difficult discussions" about Mr Blair's position.
"There was not a plot but there was genuine and open and sometimes difficult discussion," he said. "There were tensions, there were arguments."
Mr Balls said he and Alistair Campbell, Mr Blair's aide, had tried to calm those tensions.
He said: "Should Tony Blair and Gordon Brown have done things better in that period? Probably. Were people like me and Alistair Campbell and others trying to hold things together? Absolutely."
Mr Campbell later appeared to raise doubts about Mr Balls' role in relations between the two camps.
Mr Campbell said yesterday: "It is right, as Ed Balls says today, that he and I worked together at times to try to keep TB-GB in a better place, but I think Ed would have to admit he was doing so very much from a GB perspective, whereas I always sought to see things from a team perspective too."
Mr Miliband, the new Labour leader, said he was focussed on the future and described the revelations as "ancient history". However, he side-stepped questions over his role in the plot and declined to defend the secret talks as Mr Balls had done.
The Cabinet Office announced it was launching an investigation into the source of the leak of the Ed Balls files, which yesterday gripped Westminster.
Volvo, the car company, also attempted to distance itself from being linked to Mr Brown's image. Peter Rask, Regional President of Volvo Car UK, Ireland and Iceland, said: "If only the Labour party had been like today's Volvos - dynamic, agile and innovative - perhaps the UK economy would have been in a better place than it finds itself today!"
with a credible plan to deal with the problems facing Britain, they are starting to plot against each other. They can never be trusted with government again.”
Another leaked memorandum warns Mr Brown and Mr Balls that plans to scrap the 10p tax rate would hit millions of poorer Britons and pensioners, but the change was still introduced.
Mr Brown later denied that there would be any losers from the tax changes, before being forced to announce an emergency compensation plan.
The Daily Telegraph also publishes documents today revealing how Mr Brown wanted to create a British constitution. Detailed plans for a Bill of Rights were prepared, including possible regulations for the media, but the proposal was quietly dropped after he moved into No 10.
The disclosure of the economic documents in the Ed Balls files follows demands from the shadow chancellor that the Coalition abandons its public spending cuts. Last week, Mr Balls demanded that George Osborne, the Chancellor, draw up a “plan B” for spending if the economy deteriorates.
Ed Miliband, the Labour leader, is understood to privately believe that some of the cuts should be accepted, threatening a repeat of the divide between Mr Blair and Mr Brown over spending plans.
Alistair Darling, the former chancellor, gave an interview yesterday in which he dismissed the wisdom of Mr Balls’s “plan B” concept.
In the wake of the disclosures over his role in plotting to oust Mr Blair, Mr Balls denied he had acted improperly.
He also effectively accused Mr Blair of lying to the electorate in 2005 about his intention to serve a full third term as prime minister.
Labour began discussing the “transition” from Mr Blair to Mr Brown even before the 2005 general election, Mr Balls claimed.
Mr Blair fought and won the 2005 election on a promise to serve a full third term in office. In 2004, he declared: “If I’m elected I would serve a third term. I want to see it through.”
But, in a radio interview, Mr Balls alleged that talks between Mr Brown and Mr Blair about a transfer of power began before the election.
“The discussions about how to make that transition work began before the 2005 general election,” he said.
He was asked: “Even though publicly Mr Blair had said he would serve a full third term, he wasn’t saying that privately?”
Mr Balls replied: “Yes.”
The claim was last night disputed by friends of Mr Blair. One said: “Ed is basically saying Tony deceived the British public at the 2005 election. That is not true.”
Mr Balls has previously denied any involvement in any plot – which this newspaper disclosed was codenamed “Project Volvo” because of Mr Brown’s reliable but dull image - to force Mr Blair from office.
Yesterday, he said he had taken part in “difficult discussions” about Mr Blair’s position.
“There was not a plot but there was genuine and open and sometimes difficult discussion,” he said. “There were tensions, there were arguments.”
Mr Balls said he and Alistair Campbell, Mr Blair’s aide, had tried to calm those tensions.
He said: “Should Tony Blair and Gordon Brown have done things better in that period? Probably. Were people like me and Alistair Campbell and others trying to hold things together? Absolutely.”
Mr Campbell later appeared to raise doubts about Mr Balls’ role in relations between the two camps.
Mr Campbell said yesterday: “It is right, as Ed Balls says today, that he and I worked together at times to try to keep TB-GB in a better place, but I think Ed would have to admit he was doing so very much from a GB perspective, whereas I always sought to see things from a team perspective too.”
Mr Miliband, the Labour leader, described the revelations as “ancient history”, but side-stepped questions over his role in the plot.
The Cabinet Office announced an investigation into the source of the leak of the files.
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Saturday, 11 June 2011
We've spent all this money, but what have we got for it
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