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Balls is wrong. Austerity max is a recipe for defeat

ed balls 04Tony Blair was elected by offering new hope in 1997 after the ravages of Thatcherism. New Labour squandered that victory. Five million votes were lost between 1997 and 2010 by taking our core voters for granted. Since then working class voters have defected in droves to UKIP.  And most recently, in Scotland, to “Yes” and the SNP.

Ed Balls seems determined that trend will continue. What with benefit caps, pay freezes and sticing to a Tory budget, Austerity lite was bad enough, but at least investment spending provided some wiggle room. As Mark Ferguson puts it at LabourList:

the only reason for stomaching the adoption of Tory spending plans was the understanding – or at least, the hope – that Balls would use borrowing in capital investment projects to boost growth. Building schools, homes, road and railways costs money, but it also has a significant growth multiplier that means every pound borrowed and spent repays itself many times over – an economic dividend that a Labour government and the British people could reap at a time of hardship.

Now, a commitment to no new spending funded by borrowing takes austerity to Tory levels. Investment for growth has been sacrificed to make up for Balls’s own complicity in the errors of New Labour. Marg Ferguson says it’s a vision without hope. It is a disastrous error. 

Ed Balls is not stupid. He knows it is wrong. Four years ago, in his Bloomberg speech, he said how important it was for him “to stand up now and challenge the current consensus that – however painful – there is no alternative to the Coalition’s austerity and cuts.” That Balls was right. That Balls pointed out:

Whether our leaders make the right calls now on growth and jobs, the deficit, public spending and welfare reform will determine the future of our country for the next decade or more and shape the kind of society we want to be.

That Balls knew that “by ripping away the foundations of growth and jobs in Britain” people like this latest Balls are :

not only leaving us badly-exposed to the new economic storm that is coming, but are undermining the very goals of market stability and deficit reduction which their policies are designed to achieve”.

The Balls of the Bloomberg speech understood that:

on all the other occasions when major economic misjudgements were made, broad-based political, media, financial and popular opinion was in favour of the decision at the time, and the dissenting voices of economists were silenced or ignored.

That old, Keynesian Balls remembered what happened to the plan of Ramsay McDonald when he caved in to the prevailing consensus:

The promised private sector recovery failed to materialise. Unemployment soared. Debt rose. Britain faced years of low growth. The parallels with today’s situation are striking.

Sadly, in spite of apologising for New Labour errors  like the light-touch regulation of banks for which he was himself partly responsible, the returning neoliberal Balls “far from learning from our history … is set to repeat the mistakes of history“. As he told Labour’s conference yesterday, “in our manifesto there will be no proposals for any new spending paid for by additional borrowing.” Not even to finance capital investment on transport infrastructure or the building of 200,000 houses a year by 2020.

Balls knows that the economics he is preaching is bad economics. He preaches what he knows is wrong because the public perception is that the Tories are more credible than Labour. He is so cowed and defensive as a result of that perception and because of his own culpability for the errors of the past, that he preaches policies that he knows would fail. How can he establish Labour’s credibility on that basis.

Leadership is about changing and leading public opinion rather than being driven by it.

That’s what the Bloomberg Balls said. He was right. And that’s why the Balls we have now is not fit to lead Labour on the economy.

We cannot win with a plan that offers no hope. We cannot win with a plan designed not on a foundation of sound economics but in reaction to polls and focus groups. We cannot win with a plan we know won’t work. As the Bloomberg Balls said:

We must make clear that vision of a better Britain is rooted in a robust and credible economic analysis and an alternative economic plan.

We must persuade people in their heads as well as their hearts to come back to Labour again.

And by comparison, we must expose the Coalition’s plans as heartless and wrong-headed.

14 Comments

  1. veganpanda says:

    This is why I say LabourareToryareLabour, they don’t help themselves!

    You’d do great in the Green Party 🙂

  2. Paul says:

    You’ve missed the British Investment Bank out of analysis, a ‘back door’ way to investment via (probably) NS&I. Have blogged at TCF

  3. jeffrey davies says:

    spot on but the ed balls rr are little tories untill they pushed out nothings going to change other than voting for another party jeff3

  4. John Reid says:

    Why do you say the 5 million votes lost between 97-2010 were the core vote, those. Ores were an increase on the 8.4 million we got in 83′ a lot of those people who came to labour in 92 and 97 were new to labour or hadn’t voted labour since the 60’s as such it was those who lost labour 5.6 million votes between the 50’s and 83′ were the ones who lost au our core vote.

  5. John Reid says:

    As for the working class voter deserting labour, a That her and the SDP got working class ex labour votes, most of the working class who deserted labour don’t vote anymore, and labour only ever won elections when they got the middle class vote too, plus 92 election saw bigger swings towards labour in middle class wards than working class ones

    1. Robert says:

      John John John if anyone attack his beloved Blair and progress this angers John he is of course a Progress lad, and a Blair lover.

      1. John Reid says:

        Don’t feed the trolls, I’ve told you to stop saying I’m progress, I never have been and rarely read it, but you just ignore me,

        The irony of the usual suspects trying to oust Blair for years isn’t list in me, Livingstone has never shown loyalty, backing the a greens for the assembly in 2000′ not backing ?Labour at the election 2001′ twice backing independent
        Lufthur Rahman,

        And the hard left ousted the SDP in the early 80’s, where was the calls to have these people ousted when. They were ousting the right of the party,

        1. Robert says:

          Sorry but I cannot help feeding you, as you once told me your to the labour right which of course is progress and since your in love with Blair well it a natural progression.

          Your progress

          1. john reid says:

            actualy don;t reaaly care for blair, he was a tribune and CND ,Bnee for deputy in 81, as well as centre left, i always prefered frank Field

  6. Mukkinese says:

    Yes, very disappointing.

    Giving the electorate a choice of “the lesser of two evils”, is hardly going to inspire people to engage with politics again…

  7. Robert says:

    Ball’s has returned to his roots remember when he was in the Tories he stated they had better drinking clubs my bloody ass he believed in their ideology and he is now able to return to that.

    Miliband is Miliband he’s controlled by the Blair group Progress and he is a shambles.

    The two important areas to talk about would be Immigration because UKIP are winning on this battle ground, and then austerity deficit and the debt.

    Miliband forgets to add these to his speech for god sake his excuse is well he likes to speak from his heart so he forgot them, the real answer is simple he has nothing to offer us except what the Tories are offering so best to say sod all in the hope the public believe his excuse.

    Not forgetting twenty minutes before the conference Miliband went with his spads into a room to rewrite his speeches because they noticed errors and I cannot see them missing out Immigration or the economy, so these were left out on purpose .

    The fact is labour told us they are going to be big on the NHS but he can only be big in England which labour seem to think they have not devolved I asked my MP in an email how would labour give money from the mansion tax to Scotland and Wales and NI and I was told this is an English issue only, but according to Miliband this will be his big vote winner for voters across the Uk.

    Sorry mate education and NHS is devolved mate.

  8. John Reid says:

    the cliques, the bitching and sniping,in a macho dominated wold of politics

    I recall the early 80’s we didn’t up date the membership list,and we were writing to members who’d passed on,inviting them to meetings, or didn’t get the members to vote for members standing in a target wards didn’t get the nomination papers in, didn’t get the paper candidates in place and didn’t get the CVs for leaflets for that last election,in one area where we struggled to get volunteers to do things and then they mess up, their job, we had one person oust someone as membership secretary,

  9. swatantra says:

    For once Balls is right. Prudence Prudence Prudence. People will have to do more for less, for a little while longer until confidence is restored.

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