There is no doubt this is a defining moment for the Labour Party. No-one questions that Ed Balls cannot, with 3 years or more to go to the next election, promise to reverse this or that particular cut, because nobody can anticipate in this exceptionally fluid and febrile situation what will be the state of the economy so far ahead.
But it is a totally different matter to say, as Ed Balls did at the weekend: “the starting point….is we’re going to have to keep all these cuts”. It is also a totally different matter to say that Labour is signing up wholesale to the government’s present pay freeze and future pay cuts.
So why has he done it? Not a single argument has been used to justify it except “Labour must be seen to be making tough choices”, which is simply a parroted mantra, not an explanation.
I attended the PLP last night and spoke along the lines I had already posted yesterday, reflecting precisely the same case set out by Len McCluskey, though additionally I also raised the objection that the change of policy let the super-rich off the hook completely.
Last year the lowest tenth of the population had a pay increase of 0.1%, while the FTSE-100 directors took home an increase of 49%, that is 500 times as much. I concluded that that fact provided the link to what our policy clearly ought to be: the promotion of a growth policy by creating jobs funded by taxing the ultra-rich whose gains in the last two years alone were enough (£137bn to be precise) to pay off the entire budget deficit.
So what is Ed Balls’ defence? Extraordinarily, that jobs must be the priority! But benefit cuts, public expenditure cuts and pay restraint are all going to do the exact opposite – squeeze demand even further, discourage private investment, intensify austerity, and ratchet up unemployment. If that is his only argument, why is Balls, an intelligent and competent man, taking a position so obviously feeble and patently false?
The most likely explanation is that he’s done some deal with the Blairites who remain in a majority both in the PLP and in the Shadow Cabinet. A full-scale barrage of Blairite propaganda against the party’s economic policy, starting immediately after Xmas, with contributions from Jim Murphy, Liam Byrne and Stephen Twigg, has now culminated in a confessional turnaround from Ed Balls. This repositioning on his part may secure his prospects for the moment, but at a price for the party which is irredeemable.