Labour leadership contenders clash over spending cuts

On the critical question of how best to support growth while reducing the deficit, Mr Burnham said Labour needed to be seen to be credible if it wanted to be listened to and “not oppose every cut”.

While he agreed the coalition was moving too fast, he said Labour had agreed to protect spending only on front-line police, schools and health and should not pretend there would not have been cutbacks if it had stayed in power.

“Let’s get some honesty in this debate,” he said. “There would have been significant spending cuts under Labour and there would have been job losses under Labour.”

But Mr Balls urged his colleagues “not to do the coalition’s job for them”.

“I think Labour would have been creating jobs this year. At a time when the economy is slowing down, we should be building houses, not cutting them, building schools, not cutting them.”

Asked where he and his brother disagreed over economic policy, Ed Miliband said he wanted more emphasis on tax rises – including a higher levy on banks – to bring down the deficit than Labour was arguing for at the moment.

“The banks should be paying the price of the crisis, not people up and down this country,” he said.