Ed Balls seeks to restore Labour's economic credibility


Ed Balls shadow chancellor: "In tough economic times we have to make difficult choices about priorities"

On Budget Day in just two years' time the man holding the red box outside No 11 may be Labour's Ed Balls. That will only happen if he can restore Labour's economic credibility.

Today the shadow chancellor came to the City to deliver a speech designed to do just that. His message was the same as ever and yet different.

As always he claimed that the government's austerity economics was failing and forcing ministers to search for another £11bn in cuts they never planned to make.

However, he also acknowledged that Labour would have no choice but to go along with many of those cuts and would treat them as "a starting point" for their policies in government.

In other words he was telling his party, as well as the country, that for all his talk of growth and jobs the next Labour government will find itself having to cut day-to-day spending more and tax more too - albeit according to different priorities.

Those hoping he would spell out Labour's spending plans for 2015 - the first year they might be in office - and set out his so-called fiscal rules - ie how fast he aims to reduce the deficit and Britain's debt - were disappointed. He insists that with the economy so uncertain now is not the time.

However, there was one firm commitment - Labour says that the 600,000 pensioners who earn enough to pay higher or top rate tax should no longer get the annual winter fuel allowance.

This is more symbolically significant than it is economically. After all, the party has always stressed its commitment to universalism - the idea that all get the same benefit regardless of their incomes - as a way of binding society together. Besides, as I pointed out to the shadow chancellor, it saves just £100m, which is not much more than one thousandth of the projected annual deficit in 2015.

A sign of how big a step the party regards this is the fact that Mr Balls insisted that Labour would keep the free pensioners bus pass and free prescriptions. The party remembers all too well how Gordon Brown used the threat to benefits to the elderly as a stick to beat David Cameron with at the last election.

Labour opposed the coalition's cut to child benefit for those on higher and top rate tax and still insists it was unfair. It is projected to raise 23 times more than means testing winter fuel payments. So, either Balls will have to be clear that it is a cut he can't restore, or he will have to come up with a new more affordable lower level of child benefit which all can receive.

In truth, economic credibility depends less on published plans and more on public trust. That is why Ed Balls won't stop reminding voters that the coalition's economic plans are way off course and leading to cuts they never dreamt of making.

However, he - unlike most opposition spokesman - also has a personal record to defend. For years he was Gordon Brown's chief economic adviser - in reality if not always in name. Today he insisted that Labour had not been profligate in those years.

His Tory opponents beg to differ of course and having long memories or, perhaps just access to Google, discovered that 17 years ago another shadow chancellor promised the same "iron discipline". Yes, that was Mr Brown.

Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this

    Comment number 138.

    come on nick

    This man was in charge of the banks when we had the first Bank run in a century .
    This man was in the treasury when they chose to run up the biggest defecit in history .
    There was no money left , his own department said so .
    He called the double and tripple dips with glee ( neither happened ).

    Your job is to report this .

  • rate this

    Comment number 137.

    The right is fragmenting because it has no answer to the crisis except austerity,failing here and in Europe.

    There is a Tory party based in Westminster and another in the provinces called Ukip which is a tragi-comic parody.

    A lot of the problem is ignorance of economics,shared by the pubic and part of the elite.

    `More interested in politics than economics` M.King on the Bullingdon lads.

  • rate this

    Comment number 136.

    Breathtaking the sheer gall Balls complaining of the economic situation that a next Labour Govt would inherit.Next Labour Govt inherit!Did he miss the national debt spiralling amid failed audited defence projects,a storm of welfarist unsustainable spending to keep core voters onside,even before Browns bailout?Sheer,utter hypocrisy.Future GENERATIONS have inherited Browns legacy.

  • rate this

    Comment number 135.

    Labour and economic credibility.....er, when has Labour ever had credible economic policies. Wilson, Callaghan, Brown, Blair, it's the same old story. One disaster after another.

  • rate this

    Comment number 134.

    Why does ed have to restore Labours reputation .

    I cannot find anywhere in the article where you pointout any specific reasons why he should have a bad reputation .

    Which is odd.

  • rate this

    Comment number 133.

    It was a colapse pf private capital not sovereign debt which began the crisis,government debt was a consequence.

    Government debt according to the IFS (2008) was lower than that inherited in 1997,the deficit similar.

    The money went to pay for underfunded public services.

    Not your priority perhaps,it was ours.

    Read something before parroting tabloid prejudices,

  • rate this

    Comment number 132.

    The English problem.

    Is it wood or is a tree.

    Briam May is incensed that lovely cuddly badgers, which will bite off your hand getting too close, are sacrificed to the benefit of dairy economics.

    Never mind the fact of all those beautiful wide eyed heifers being slaughtered. Nut job interfering with our food chain because he broke his G-string.

  • rate this

    Comment number 131.

    Ed is the worst type of politician.

    He says he cannot make spending plans because he doesnt know what the figures will be.
    Households & businesses make bugets/plans long term WITHOUT knowing what the future is.

    I cannot stand his deniability smarmyness excuses, he is not fit to run 10 yards let alone a nation HE & his cronies oversaw UK NEAR BANKRUPSY due to ENDEMIC INCOMPETANCE

  • rate this

    Comment number 130.

    "I think the red puppet on the left shares my beliefs". "I think the blue puppet on the right is more to my liking". Yawn.. Red, blue - whatever - there's one guy holding up both puppets. The only economics this guy and the other guy Gideon whatshisname are interested in is their own bank accounts.
    I'd like every MP to declare his/her share interests, then I'd know what really motivates them.

  • rate this

    Comment number 129.

    I'm sorry? When did Labour ever have economic credibility? Ed really is talking his surname this time!

  • rate this

    Comment number 128.

    If curtent incentives to purchase property were creating demand, it would be money well spent.

    That is not happening as price is being inflated rather than demand increased. It may be difficult to realise mis-alocation of resources but it is neccesary to rethink, quickly. Inflating prices courts disaster. It is supply which must be focused and not easy money.

  • rate this

    Comment number 127.

    Ed Balls seeks to restore Labour's economic credibility

    Ed just does not have a cluedo.
    It is easy to snatch money from pensioners who have contributed all their lives.

    What is easier, is Eds ability to spend & WASTE taxpayers money.

    Ed & his rejected Liebour cronies just have no idea of how to manage anything competantly & their dictatorial attitude is sickening & DANGEROUS

  • rate this

    Comment number 126.

    He's not doing a very good job!

  • rate this

    Comment number 125.

    The heart of EU austerity Austro German fear, deep seated, of debt and inflation. I don't doubt DE bankers are fuming at US but they did exacltly the same to southern Europe in spades.

    The root of those fears lies with the well off who lost everything and then got it back, somehow. So, those up top who screwed up are still at the stupidity that caused downfall. Uber ich, ich, ich. Have a truffle?

  • rate this

    Comment number 124.

    79 --- It was Ed Balls and his cronies that created the underclass who are screeching about bedroom tax : these dumplings decided to hand out as much cash as they could so the scroungers and workshy could have a better and easier lifestyle than the workers who were paying the bills. Taking some of it back seems like a good idea, better than stealing from pensioners.

  • rate this

    Comment number 123.

    Blair & Brown were desperate to gain economic credibility and muzzled their left wing to achieve it. Then black monday did them a favour. Eventual Gordo divorced prudence and started spending like a true socialist. Ed Balls is trying the same route to power. If Osborne's credibility follows Lamont's then Balls may win the debate, but will the electorate fall for the same con trick ?

  • rate this

    Comment number 122.

    There is an easy way to rethink how we approach this. Tax allowances are universal benefits. So consider the cash payment to all pensioners called winter fuel allowance, as a portion of a tax allowance, it just comes as cash. This would merely deliver them tax allowance at one point in time. Making sure poor people did get something rather than a tax allowance they can not use. Simple, fair.

  • rate this

    Comment number 121.

    96 Nickportaloo - there's an important difference; studying at Harvard and gaining wisdom from Harvard, are two different outcomes from time spent at Harvard. Not a lot of wisdom on show from Ed or Balls.

  • rate this

    Comment number 120.

    Labour has no credibility of any sort. Economic ruin, fake socialism and warmongering is their legacy.

  • rate this

    Comment number 119.

    Gesture politics is finished,Balls/Osbourne,Milliband/Cameron have no credibility,they won't face facts,don't believe in anything except the status quo.The facts are too many people in our country, who either come with nothing or do nothing we give away to much,until this is faced and not shied away from by both main parties there votes will diminish along with any perceived credibility.


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