Is Ed Balls the problem or the solution?
The question Ed Miliband and the Labour shadow cabinet has to work out at this party conference is as much about Ed Balls as anything else. Is he the economic mastermind or the electoral liability?
In his speech the shadow chancellor tried to acknowledge that he and his boss Gordon Brown made mistakes – but not the ones the Tories and Lib Dems assert. As Labour tries to regain economic credibility they must decide whether it can be done by him.
The case is his favour simple: not only is he the most experienced Treasury expert in the shadow cabinet, he is also the man who, with Gordon Brown, invented “prudence” for the start of the Labour administration in 1997.
It was their fiscal conservatism, sticking to Tory spending limits and rigid “golden” rules that helped give Labour a reputation for economic competence in those days that had long been missing.
So he understands the need for discipline – and repeated that today with a promise of new fiscal rules which would be independently monitored by the Office for Budget Reponsibility (as opposed to the way the “golden rule” was judged by Gordon Brown). His declaration that he could not promise to reverse any cuts or tax rises was met by silence in the hall – but was an important thing for a Labour politicians trying to regain an economic reputation to say.
Balls also admitted the same old mistakes they have admitted before about the Labour years : the 75p pensions rise, scrapping the 10p tax rate, not having tougher controls on immigration and not regulating the banks enough to stop the credit crunch.
However the key accusation the government hurls at the Labour Party is that it overspent in government – that it didn’t fix the roof while the sun was shining – and that is the one Balls rejects, pointing out: “We went into the (financial) crisis with lower national debt than we inherited in 1997 and lower than America, France, Germany or Japan”.
The basic claim Labour is sticking to is that it wasn’t public service spending that caused the global financial crisis. There are two other factors that have escaped the debate right now. First the fact Britain was running a structural deficit between 2002 and 2008 before the crash and recession. And second the fact the Treasury got their predictions of tax revenues in 2009/10 massively wrong. Neither of those things have been apologised for. Whether or not Labour spending was irresponsible remains a judgement call – but a decent size of the electorate, the media commentariat and the Blairite wing of the Labour Party have already decided that it was. And they may not be able to be convinced that Balls can ever be responsible again.
Of course the other man on whom the past could be pinned – if you are one of those who believes Labour spending was irresponsible – is Ed Miliband. And we know from past experience how ruthless he can be about politics.
He and his team might one day conclude that even if they do not believe their spending in government was wrong they need to do more to convince voters that they understand those who think it was. Is that the point at which Balls might start to look like a political sacrifice worth making?
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There are 14 comments on this post
Labour trying to change their spots again? What is wrong with sticking to the principles and values that you believe in? It won’t get you elected. New Labour and now Blue Labour are trying to convince us they are a political force rather than farce, but is anyone buying it? Of course not. They sold their souls for votes already, you only get one deal with the devil. They are going to have to go back to Labour basics to gain any credibility, or admit their irrelevance in the face of the Liberal / Tory opposition. Sure, they won’t win any votes but they may gain some respect.
A problem for the country if he ever gets near a whiff of power again.
But evidently a solution to any daft 24/7 news outlet that needs any old tripe uttered as better than dead air.
Saw him on SKY and he seems unqualified even to get the settings on a tanning spray right.
He’s right of course that ‘today’s crises’ wasn’t and isn’t caused by national debt. It’s the result of mendacity and misinformation born of a nexus of private market power being allowed to build an evil empire within our democratic political structures (heavy man!). Can he pull off a roll back? I think not if our journalists unquestioningly equate structural deficits with profligacy.
Agreed! Not only are structural deficits based heavily on ideological assumptions (which I don’t agree with), but mathematically they can be out by as much as £70Bn either way (even if you agree with those assumptions).
The theory of prudence I was weened on, as my father was a manager in the Prudential. The practice is a very different kettle of fish. Whilst money gives a citizen power,collective money and the products which represent it give nations power.Similarly debt also gives the rich power over the ones who have loans and OWE.What a continual threat it is and the cause of much stress and illness.
I had a friend who was a gambler . His comments were that the only people who are successful at gambling are those with money who can afford to lose. This is similar to management of money pursae.
Ed Balls gave a mundane speech , but fundamentally there was nothing too wrong with it with the exception of the balance between Quantitive easing , tightening belts , increasing taxes and reducing public spending.
It is crucial that this balance is accurate.
Ed Balls is, of course, an electoral liability – the Tories would like nothing better than for him to be in a prominent position come the next election. That’s worth 50 seats at least.
But right now it’s irrelevant. The next election is more than 3 years away, which means the Labour Party has more than 2 years to keep its head down and its powder dry, think up some credible policies and, if it has any sense at all, draft in some new leadership with an ounce of charisma to flog them to the voters. Unless they can manage all that, they’re looking at another 18 years in the wilderness which, if Ed Balls is involved anywhere, would be no bad thing.
Sorry Ed, I wouldn’t trust you with the role of Chancellor. But that would apply to most of the labour politicians actually. The problem is Labours gross irresponsibility with taxpayers money, ideologically prone to throw loads of it at any sob-story that is put to them…
“There are two other factors that have escaped the debate right now. First the fact Britain was running a structural deficit between 2002 and 2008 before the crash and recession. And second the fact the Treasury got their predictions of tax revenues in 2009/10 massively wrong.”
Firstly, the whole idea of a structural deficit is purely ideological, and based on ‘Ricardian Equivalence’ which Ricardo himself said “had no real-world application”.
I actually think we were running a small structural surplus before the recession.
Second, the tax revenue projections being wrong is a hallmark of the neo liberal forecasting models, which have an in-built bias against government spending, and over-estimate growth. This isn’t a problem with Labour, but a problem with neo liberal economics in general.
Let’s not forget of course that Ed Ball’s brother is head of PIMCO’s European divison, meaning that Ed knows that more public investment will not lead to much higher interest payments on government debt as the neo liberals claim.
The reason we’re in this mess is because ‘New’ Labour & a good proportion of the country lived high on the hog on the idea of supposed boom. How many people maxed out their credit cards buying like crazy without caring what they were doing. When they reached their credit limit they transferred it to another card. With house prices booming they then decided to re-mortgage to pay off their irresponsible spending.
Labour thought that spending public money like water on ridiculous projects would keep people in jobs.
The banks then decided gambling on sub prime debt was a good idea fuel by the irresponsible people described above was a good business model.
How wrong these people were. Prudence is about living within your means, not saddling yourself with huge debt. Sadly a large proportion of the UK including the labour government failed to see that & were motivated by greed.
I’m disabled, on a fixed income & struggling to make ends meet. I still have the same mortgage I took out 20 yrs ago. Yes, I have a credit card but pay it off every month. I’m desperate to return to work but that’s almost impossible given the current job market.
If you’re looking for blame, it’s not just the bankers, it’s those who spent like crazy without ever thinking of the consequences.
Krishnan,
Plainly, you could do with a crash course on the Great Depression of the 1930s and what caused it, and how only the Second World War saved capitalism from implosion, and how it (temporarily) came to know it needed to implement a Welfare State to save itself.
A generation later the Establishment arrived with an acid grin and a determination to claw back everything working people had managed to squeeze from their system. The Establishment have been gradually dismantling our society ever since – this time using the “salami method” and media propaganda instead of head on confrontation. Unfortunately for you and your colleagues, you are part of the propaganda; and none of you have the wherewithal to understand it, let lone oppose it. How sad.
But you will find out the hard way during the next twenty or thirty years there can be no compromise with capitalism. By which time it will be too late.
It is my view, that Labour has an extremely difficult problem on their hands – trying to be tough and different, whilst not quite being able to… be tough and different.
Labour is in a somewhat a ‘Lost in Transition’ mode whereby their front bench is made up of individuals who were in government and supporting government during their weak-soft touch regulation of banking or ‘bankers” practices – thus encouraging bankers fraudulent activities – thus creating a recession based.
Ed Ball was one of the architecs whose cosy relationship with the then Chancellor, Gordon Brown, was proactive in setting up and the continuation of the failings we are now paying the price for.
Credibility is at the heart of ones case. If Ed Balls was responsible for such negligence is his failings to recognise that his policies were wrong, how on earth can his ‘sorry’ response be sufficient to gain confidence and trust for those whose homes are now being allowed to be repossessed by the same banks that we own. And our political elite, including Mr Balls, says nothing at all about this.
We have to ask ourselves one serious question, “who is Ed Balls really responsible for representing?” The point is, Ed Balls, like no other MP, has No Legal or Statutory Obligation to Represent Anybody!
What a Democracy we live in – when Fairness and Justice continues NOT to be for ALL.
There something about Ed Balls that makes me itch to thump him and I don’t think I’m alone.
You get the impression that he ALWAYS thinks he’s right. Only he changes what he’s saying so often he can’t possibly be telling the truth. He’s the kind of guy who never really listens – he may be quiet, but he’s actually just waiting to speak.
Sanctimonious, patronising, condescending, moralistic, and several other words far to vulgar for these pages.
I agree Tom.
To make matters worse, I know that he has voters who feel he is credible and should lead. I don’t share these views.
It’s shameful that our political representatives can make such errors of judgement, unlike the employee-employer relationship or the ‘duty of care’ imnplication an organisation may have if it fails you, politicians have NO such Contractual Agreements with the tax-payer. Therefore, NOT having a Legal Basis for political representation, Mr Balls, like other politicians will continuously be allowed to argue that he was right, when it is clear he was wrong and he will continue to be opportunist as he tries to ‘pulls the wools over our eyes’ because he has NO DUTY to the people.
Our political system needs CHANGE!!