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Ed Balls is the right choice for Shadow Chancellor

It seems that Alan Johnson has resigned for genuine personal reasons, and we must wish him well in handling whatever those are.   His successor, Ed Balls, is the right person for the job on several grounds.   He has great experience and a long track record in finance and, unlike his predecessor, will not need to bone up on an economic primer to master the subject; far from it, he will hit the ground running.   He will also rough up George Osborne something terrible, which will go down extremely well both within the PLP and in the country.   He is of course helped in that by Tory economic policy which could hardly be more maladroit and ill-advised.   But the biggest reason to welcome the Balls appointment is that his instinct to move away from the damaging Brown-Darling New Labour economic legacy is right and strongly needed at the current juncture.

It is to Ed Balls’ credit that he made the most important speech in the leadership election last summer when he made clear his view that halving the deficit in 4 years was too precipitous and seriously risked triggering a double-dip recession.   When today the latest economic data shows growth fading, joblessness now rising fast and youth unemployment at record levels, inflation sharply rising even before the VAT impact sinks in, yet the budget deficit frozen at around £155bn and possibly even rising, Balls was right to call for a fundamentally different approach, one based on the promotion of growth and jobs rather than a frenzied orgy of spending cuts.

This new appointment should for the first time in two decades or more open up a genuine divide between a City-driven, spending cuts-obsessed Tory economic policy on the one hand and a much more judicious balancing of the respective roles of the State and the markets, above all in the context of a deep recession as we have now.   There has never been a greater need to assert the Keynesian model of a public sector-led programme of job creation in housebuilding, infrastructure repair, and development of a new green digital economy.   Ed Balls’ first task must be to advance this agenda with the driving force with which he’s made his name.

The new appointments will go down well in the PLP where morale and confidence has been strongly boosted following the Oldham East triumph and the majority now opening up over the Tories in the polls.   Ed Miliband’s position has undoubtedly also been strengthened by these gains, but also by a growing recognition within the PLP of his cool and steady handling of events, his determination to open up the party to genuine consultation and membership activism, and his readiness to offer a breath of fresh air by shifting from a failed policy agenda.   For the first time for a decade the signs are now looking good for the Labour Party.

One Comment

  1. Matty says:

    Yes, it is a very good move for Labour. Having said that it is of course very sad for Alan Johnson and his family. I wish them well.

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