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In defence of Ed Balls

According to Dan Hodges blogging at the New Statesman, Ed Balls should be sacked as Shadow Chancellor in the coming reshuffle. And why? For having been the key architect behind Gordon Brown of New Labour’s neo-liberal economic strategy of deregulation and tax cuts? Certainly not. For “unlearning every rule he once imposed with iron, and occasionally brutal, discipline on others.” He is, Hodges says, “one of the few political heavyweights on the front bench” and “his prescriptions for the nation’s ills may be economically sound,” but he has to go. These things are “politically unsustainable“, apparently.

Fortunately, Dan Hodges doesn’t have the ear of the other Ed, so we’ll predict that Dan will be disappointed. But Ed Balls really does deserve better than this. He may have made mistakes in the past. As David Osler put it:

That is not to say that Balls got everything right in the past; clearly his thinking on bank deregulation was unduly influenced by the free market right, and if he ever subscribed to the risible notion that New Labour had ‘abolished boom and bust’, he has now presumably learned from his mistake.

But he’s certainly doing and saying a lot right now. As he put it in this week’s Tribune:

I warned, in my Bloomberg speech, that there was a hurricane building and this was not the right time to rip out the foundations of the house. Back then it felt like not many people were making this argument, but today many of those the Chancellor was able to cite in support of his plan are getting more and more worried.

He argues for coordinated international action, by international agencies like the European Central Bank, and with the backing of national governments. In Britain, he recommends:

For starters, the government should use the billions raised from repeating Labour’s bank bonus tax to build thousands of affordable homes and get young people off the dole and into work. And instead of cutting the 50p top rate for the very richest, a temporary VAT cut would boost the economy and help families and pensioners struggling right now.

Hodges calls this “misguided loyalty, stubbornness and Keynesian economic orthodoxy.” Orthodoxy? I wish.

And on the coming confrontation with public sector workers, he is, without contradicting anything Ed Miliband has said on the subject, rightly determined to pin all the blame on the government:

Emily Maitlis: Do you urge these major unions to call off their strikes?

Ed Balls: I don’t think there’s anybody in the country who wants to return to the strikes and divisions of the ‘70s and ‘80s but it takes two sides to sort out a dispute and I’m afraid when you see the relish in George Osborne’s eyes just then, he wants to get out of jail on the economy through confrontation and strikes. What we want is talks to get this sorted out in a fair way.

EM: He said it was deeply irresponsible and you heard Brendan Barber say we need a new approach and new proposals. Are you willing to say to the unions, or have you said to the unions, call off this ballot, call of the strikes?

EB: The unions have been saying all along they want proper talks to get to a fair deal. The government pre-empted all of that by a huge rise in pension contributions last autumn.

EM: So you won’t ask them to call off these strikes then?

EB: Look it takes two sides to sort this out…

EM: Yeah but I’m just asking you as one side, will you ask them to call off the strike?

EB: No. I’ll say to the unions get round the table but they can only get round the table and talk if the government wants a deal and all the evidence is the government doesn’t want a deal. They want the confrontation.

EM: So you’re happy then for them to ballot their members on this?

EB: Of course. Of course. It’s their right to ballot their members but nobody wants a strike. If in the end though there are men and women in their 50s who feel even though their pensions are low that they’re going to told to pay more and work longer for less money of course they’re going to be upset but the government can sort this out. George Osborne and the unions can sort this out if they want in a fair way. The government has got a big responsibility here.

EM: And if we get to a point after a ballot where we have strikes for millions of public sector workers at the end of November will you be telling them how economically damaging this is, that this is a pivotal point for our economy now?

EB: Emily, we don’t want strikes. They’re a last resort. We want talks and a fair deal on pensions. But what George Osborne wants to do is blame a flat lining economy and rising unemployment on the trade unions. It is his decisions which are getting us into this mess, not the trade unions.

(Transcript of Newsnight interview)

7 Comments

  1. Redshift says:

    Totally agree. I might not like everything he did when we were in power but his economic arguments since the last election have been spot on – and gradually people are starting to realise he was right.

  2. Éoin Clarke says:

    100% bang on the money, as usual, from Left Futures.

  3. Dan Hodges says:

    Is that your response?

    Seriously?

    A Newsnight transcript.

    1. Jon Lansman says:

      You think he should be sacked even though “his prescriptions for the nation’s ills may be economically sound”. I think he should stay (and be applauded) because they are economically sound. I think readers can make a judgement about that.

      You think Ed’s policies are unsustainable because they were rejected in 2010 and 1979 (seriously? Denis Healey, wedded to Keynesian economic orthodoxy in 1979?). I think Ed’s disagreements with Darling and the policy on which we fought the election last year were made clear in the leadership campaign. I do think he is being held back by the Blairite unwillingness to move from that policy and Ed Miliband’s desire to avoid a battle with them. But I beclieve his policies are right and are therefore the only sustainable position. It’s the Blairite position (or something too close to it to have been differentiated from it) which was rejected by the electorate, and is unsustainable.

  4. Matty says:

    Excellent article. Ed Balls is probably the best shadow minister we have got. Takes some chutzpah from Dan to accuse someone of not being serious.

  5. Gary Elsby says:

    Is a deficit denier someone who denies £1bn per Month debt interest or someone who accepts it but carries on as though it doesn’t matter?

    Compare this to WW2 debt interest which was negligible by comparison.

  6. John Paul says:

    I agree with Dan

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