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
    +1

    Comment number 178.

    176 Donkzilla

    'Your 2004 post proves you're not following the argument'

    So you concede my 2004 did indeed predict the UK's economic crash, banks failing and the govt printing money. So much for 'nobody saw it coming'.

    'You already lost the point that Labour can't be blamed for the great crash of 2008'

    They can be blamed because they recklessly, for votes, allowed an obvious crash to develop.

  • rate this
    +4

    Comment number 177.

    What will Balls(up)'s plan be once he's finished spending other peoples money?

  • rate this
    -6

    Comment number 176.

    @ 163. jgm2

    Your 2004 post proves you're not following the argument. You already lost the point that Labour can't be blamed for the great crash of 2008 - or are you just back-pedalling, trying to blow your own trumpet about your economics wisdom?

  • rate this
    +1

    Comment number 175.

    168 Bryers - adhominem - thats unusual have you had a long day ? You probably wont like 169 either. Sorry to disappoint on such a large scale. I guess my main point is that Gordo was an extremely bad king.

    167 DK - prefer Darlings analysis of UK after the crash to Gordo's. Labour apologists strongest argument is that the tories wouldn't have been any better. Not the greatest defence I fear.

  • rate this
    -2

    Comment number 174.

    All pensioners pay a lot less tax than working parents with the same income. Don't pay NIC. Don't pay into pension funds. Don't have children to support either.

    It's time to restore equal rates of taxation to everybody. Including pensioners like me.

  • rate this
    -5

    Comment number 173.

    166.Scribes2
    No mate, the Irony of it is, that you Tory/UKIP voters have showed the true nature of your politics in that you're all to willing to bewail the prospect of Wealthy Pensioners losing their winter fuel allowance but deathly silent when fellow working class people are committing suicide and queuing up at food banks because losing their benefits.
    Disgusting.

  • rate this
    +8

    Comment number 172.

    Every labour government I recall has left office with the economy in tatters. I am far from a fan of the current lot but give the morons in the labour party yet another chance you have to be joking.

  • rate this
    +7

    Comment number 171.

    Ed Balls seeks to restore Labour's economic credibility!
    I love it!
    Talk about a U turn! He's been slamming the Tories for a long time; now he seems to think they have a point!
    You can't believe a thing he says!

  • rate this
    +4

    Comment number 170.

    Does anyone actually take this man seriously ?.........if you do ask your carer to explain.

    The fact that he is a liability to the labour party may be the only thing that stops him becoming a liability to the country

  • rate this
    +1

    Comment number 169.

    JGM 2 - I wouldn't advise you take up Bryers reading list. K&R's papers are intellectually stimulating but like most economists papers the starting assumptions deeply prejudice any conclusions and the obsession with equilibrium statics leave them in dark ages mathematically. For a more balanced score card read prof Keen or even better forget economists and follow your own common sense.

  • rate this
    -1

    Comment number 168.

    FBL

    I`m surprised you have chosen to conduct the fools chorus on here,-assertion unsupported by evidence,I can only suppose a kind of herd mentality has got the better of you.

    I thought you had some grasp of economics,or at least the international dimension of the crisis we are in.I was wrong,you have lost credibility and until you regain it I will not engage with your nonsense.

  • rate this
    -12

    Comment number 167.

    161. feedbackloop
    "few governments found themselves as poorly positioned as UK after the crash."
    --------

    More lies from the Labour haters. OK, we have way more debt than Greece, but we were very well placed with our AAA credit rating... until your coalition idiots lost it for us.

  • rate this
    +2

    Comment number 166.

    @157. SocialistNetwork ......
    The irony is your comment makes no mention of Balls and his previous role in the nations economic misfortune. I guess your name gives it away!

  • rate this
    +1

    Comment number 165.

    147 Donkzilla .

    firstly the capital ratios that represented the main weaknesses were public knowledge .
    The run on northern rock was like a slow motion car crash . day after day chances were missed to reassure customers , all were fluffed .

    Others may have done the same .
    But only Ed Balls was there .
    And he is the one at the top of the page .

  • rate this
    -1

    Comment number 164.

    @ 145

    Stalin was quite short, no question about that, but he wasn't fat. He had a better figure than either Churchill or Roosevelt, for example. As did Hitler, for that matter.

    Does that in any way mitigate the dreadful nature of their respective totalitarian regimes? No, of course it doesn't.

  • rate this
    0

    Comment number 163.

    158 bryhers

    'I call your comment the vanity of retrospective wisdom.'

    Nothing retrospective about it. I was warning of this as far back as 2004. I was warning about UK deficit spending and private borrowing being out of control and that it would end with the UK govt printing cash.

    Donkzilla knows it because I proved it by linking a 2004 post the last time he gave it 'nobody saw it coming'.

  • rate this
    +5

    Comment number 162.

    Gordon Brown and Ed Balls are responsible for the mess we are currently in. Balls is a bully and an idiot, I really hope that the general public remember that when the next elections come.

  • rate this
    +1

    Comment number 161.

    147 Donkila - few governments found themselves as poorly positioned as UK after the crash. Gordo was abject. Not only did he fail as an interventionist but mistook the great debt moderation for policy success 'the end of boom and bust', slapped down his own chancellor for telling the truth stated the uk was best placed to whether the storm. Denial, incompetence and hubris. Balls is his protege.

  • rate this
    -1

    Comment number 160.

    'If perpetual growth is as simple as borrowing 3% of GDP every year why has nobody done it before?'

    Please can somebody find a milk bottle top, give this person a medal.

  • rate this
    +1

    Comment number 159.

    None of these scoundrels have any credibility at all. In between blowing up Arab women and children and selling legislation to the highest bidder they have managed to make a complete mess of the whole country. They should all be strung up.

 

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