Shadow Chancellor Ed Balls will today promise to slash the pay of UK Government ministers and cap child benefit rises.
In an attempt to show Labour is serious about tackling the deficit and can be trusted again with the economy, he will say ministers will lead by example and take a 5% pay cut.
Salaries would then be frozen until the new government had balanced the books.
Mr Balls will also use his keynote speech to the Labour conference in Manchester today to propose £400 million of savings by capping rises in child benefit to 1% for two years.
The announcements follow a commitment yesterday that Labour would raise the minimum wage from £6.50 to £8 an hour by the end of the next parliament.
Mr Balls will say: “Labour’s economic plan will balance the books. But an economic plan must do much more than that.
“We also need to change the way our economy works. Because while our economy is growing again most working people are still not seeing any benefit from the recovery.
“This is our task – not to flinch from the tough decisions we must make and to show the country that there is a better way forward.”
Announcing the ministerial pay cut, Mr Balls will say: “The next Labour government will get the deficit down. And Ed Miliband and all my Shadow Cabinet colleagues are clear it will mean cuts and tough decisions and we will take the lead.”
The child benefit cap – designed to disprove Tory accusations that Labour is actually the “welfare party” – may prove controversial with some supporters.
Mr Balls will say: “We will have to make other decisions which I know will not be popular with everyone.”