Tag Archives: Ed Balls

Two Eds May Not Be Better After All

So, apparently the relationship at the top of the Labour Party between leader Ed Miliband and Shadow Chancellor Ed Balls is breaking down. This supposed friction between Labour’s top two was reported last week in the media and even if, as has been argued, the account of Miliband snapping at Balls at a shadow cabinet meeting for tapping on his Blackberry is indeed a mere repeat of an event that actually happened and surfaced in the media almost two years ago, a potential rift between Balls and Miliband does not bode well for the Labour Party’s chances of regaining power at the next general election.

At a time when the economy was undoubtedly going to become the most important factor at the next election, Miliband, still not wholly accepted by the Labour Party, particularly those of a more central than left leaning, is in desperate need of a shadow chancellor who can not only expose the Tories mishandling of the economy but also work with him to produce a Labour party with policies that can convince the public that they are a government in waiting. Any rift between the two therefore could be catastrophic.

However, it seemed nigh on impossible that the rift would not occur at some time or other before the election. For starters, Ed Balls was still smarting at his rejection by the party at the leadership elections following Labour’s loss of power. Balls came in a distant third behind Ed and his brother David, and this was a rejection that must have hurt. Furthermore, Balls was then initially denied his second preference job, that of Shadow Chancellor, a position granted to Alan Johnson, only for Balls to be given the job when Johnson resigned a mere three and a half months after taking up the role. Balls was further aggrieved by the fact that he was Miliband’s second choice and it is likely that his leadership ambitions are far from evaporated.

It appears that Balls and Miliband are determined to follow in the route of Labour leaders and their (Shadow) Chancellors falling out and tearing the party apart, an eventuality that Miliband has already had to fight hard against as the party has an innate instinct to enter into a bitter civil war whenever it is removed from power. So far, Miliband has done a splendid job of balancing the needs of the trade unions, Blairites and other Labour factions all vying for control of policy.

The last thing that Miliband needs on top of this is a petulant Shadow Chancellor determined to undermine him. Miliband therefore has two options. The first is to continue with Ed Balls as shadow chancellor, concede ground to Balls and hope to maintain the current level of unity present in the Labour Party. This has the obvious advantages of avoiding disruption as well as being viewed as overseeing the constant removal and implementation of Shadow Chancellors, a sign of uncertainty, instability and potentially weakness.

The second option is to remove Balls and find a new shadow chancellor to take the fight to the coalition. The truth is that Balls isn’t all that likeable. I believe that the general public do not really see Balls as a future Chancellor. After all, this is the man that the Tories jeer delivered us an economic crisis that Labour has to try and distance itself from. So far, Tory insults concerning the origins of the financial downturn are sticking in the mind of the public and the closer they can associate Balls with the crisis the more the insults will stick. Also, Balls appears determined to disrupt the Labour Party, bitter at the loss of the leadership election. Furthermore, the truth is that not much of the Labour Party backed Balls in the leadership election, around 11% of first preference votes, and even fewer would now, knowing the damage it would cause and taking into consideration the promising start of Ed Miliband as Leader of the Opposition.

A problem created by removing Balls however is where Miliband would find his replacement. I believe that the best candidate would be Chuka Umunna, the current Shadow Business Secretary, who is eloquent, intelligent and a good economist. Furthermore, although inexperienced, this means that Umunna is distanced from the record of the pat Labour government. He is a likeable, attractive character and would impress the general public, as well as seeming part of a more approachable top team to the Lib Dems.

Miliband therefore is faced with a difficult decision, to risk splitting the Labour Party and taking the bold move of giving the job of Shadow Chancellor to a relatively inexperienced, yet bright, politician, or to attempt to maintain harmony but appear weak and leave the Labour Party open to Tory attacks. Certainly Miliband cannot allow Balls too much freedom to manoeuvre against him and act in a petulant and undermining manner. If Balls is determined to disrupt the Labour ship on its way back to power, now would be the time to depose him.

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Hollande’s Importance for Labour

Francois Hollande’s rise to become French president and remove the centre-right administration of Nicolas Sarkozy was a big moment for Europe. Hollande’s accession marked the rejection of technocratic and conservative led recession in favour of a more equal, painless route out of Europe’s woes. Furthermore, Hollande’s triumph appeared to personify the anti-austerity tide sweeping across Europe from the streets of Athens, Dublin, London and Paris. The French elections symbolised the democratic wishes of the peoples of Europe to escape the bonds of austerity in favour of a growth-led recovery in the interests of the many not the few.

The initial triumph for Ed Miliband’s party therefore was simply the impending signs of a turning tide. The people of Europe had realised that it was leftist, growth supportive policies that would drive Europe out of recession not more and more cuts to vital services which starved the economy of oxygen. Hollande gave British Labour supporters a huge boost with his election, even if we have found his early days in office underwhelming. That is we have until four days ago, when Hollande unveiled his first budget, including his centrepiece policy: a super tax on the super-rich. From now on, the richest in French society will pay a tax rate of 75%. Whilst Ed Miliband has done some marvellous work in raising Labour’s ratings in the polls (even if his own are rather less satisfactory), it will be the results of Hollande’s super tax that could define whether Labour can be trusted with the British economy in 2015.

Ed Miliband has long been making moves against what he sees as predatory capitalists and the super-rich. Recently he announced plans to forcibly break up banks if they refused to do so themselves, whilst attacking the Tories watering-down of the Vicker’s report into banking practice. Furthermore, he has dedicated Labour to repealing the tax cut for the rich, which the Tories implemented in George Osborne’s budget, in the interests of fairness and to squeeze those who contributed to the financial crisis that has led to Britain’s terribly recessive economic period. These policies are controversial to say the least.

Whilst the public generally agree with Ed about the need to make Britain a more egalitarian and fair society, they fear that Labour, still blamed for the financial collapse of 2008, cannot be trusted with the economy. These fears are compounded by the Tories, although their economic credibility is dissolving gradually due to the double-dip recession. Another Tory argument, central to the idea of taxing the rich and squeezing the banks, is that if we squeeze the rich too hard they will simply pack up and leave, simply go on strike, in a scene reminiscent of one of Ayn Rand’s sauciest wet dreams. This is why Hollande will be key to Labour’s election chances.

Although the French economy is not based around a rich financial centre such as that in the City of London, the French nation has its fair share of the super-rich, people who will presumably become disgruntled by the notion of having their taxes raised to 75%. The key tests for the Labour party will be the tax receipts of the French treasury over the next couple of years and the number of rich who decide to leave French shores in search of a more generous tax deal.

The Tory argument that a Labour government will push away the banks, the rich, and their enterprises by squeezing them too hard is about to be tested across the Channel and if their arguments are proved wrong not only will the Tories look even less economically credible but they will suffer further humiliation. Furthermore, if Labour are right, Ed Miliband will once again be proved right on one of his main themes (remember Murdoch and the Leveson Inquiry). This would be a major boost to Miliband personally and Labour economic policy and credibility as a whole. The success of French policy could cement Labour’s chances of re-election and consign the Tories to a swift return to opposition. The advantage for Miliband is that, even if he is wrong, the consequences for him are much less severe.

Firstly, Miliband can still take the moral high ground. He would remain the politician who was backing the little people over the rich and powerful. He would still be the one standing up to the banks and their gambling practices. Plus he would still be right to demand the morally and ethically correct route even in the face of a wealth rebellion. After all, even if the wealthy threaten to leave, that would not make it right to simply cave in to their demands. Miliband cannot let himself to be seen selling his ethics away for the concern of money. The public will understand and appreciate this.

However, I really don’t see it going that far. The rich will not leave France on their yachts and private jets. Instead, the French people will be seen to be enjoying a fairer deal, where the rich pay their way and the poor are not used as sponges to be wrung dry so as to pay for a tax cut for the rich. Hollande may just have provided a huge boost to the British Labour Party’s chances of victory

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A chance for Labour?

Despite the successes of Labour in recent local elections and the continuous unpopularity of the coalition government, I fear that it is still true to say that a large percentage of the population believes the coalition’s narrative on the economy. This narrative reads that Labour overspent in government building up a massive deficit and is directly responsible for the economic collapse in Britain and the mess left for the coalition government to admirably clear up.

Whilst it is true that the UK (and much of the developed world), built up irresponsible amounts of debt, it is doubtful that a Tory government would have done any different. After all, up until 2008 the Tories very rarely disagreed with the amount Labour was spending in government. Furthermore, the basis of the economic crisis in Britain was the worldwide crash instigated by the collapse of American banks, which caused tremors across the developed world. Labour then took some very hard decisions and Gordon Brown called it right, pleading for the bailout of the banks and leading Europe away from the crisis. Labour then began to deliver stability and small amounts of growth before inevitably losing power at the 2010 election, largely due to the public’s decision to not trust Labour with the economy.

However, since 2010, the UK economy has consistently stalled and stagnated and has now returned to recession, despite the implementation of Tory economic plans. Despite the fact that the economy has slid backwards over the past two quarters, the Tory party continues with their damaging fiscal ideas and the country continues to allow ideological cuts to ruin the economy due to their distrust of Labour. As well as denying the UK economy growth, the prime minister has today claimed that the Eurozone must replicate the coalition’s “pro-growth” agenda, a laughable gesture considering that the UK has returned to recession.

It has been clear for a long time that the economy will be the defining factor of the next election, probably in 2015. It is key for Labour’s election prospects therefore that the party regains economic credibility and destroys that of the Tories. You would expect the return to a double-dip recession would make this job easy but the sheer level of distrust between voters and Labour has made this a difficult task. However, I believe that David Cameron’s speech today, urging the Eurozone to replicate his policies, and continued stuttering growth allows Labour a golden opportunity, one they cannot afford to miss, in destroying Tory credibility going into the next election. As for restoring respectability to Labour’s economic plans, the party must recognise the faults of Labour before the 2008 crash, and ensure that they produce spending plans that are realistic and accounted for. Furthermore, I believe that Labour can gain a stranglehold on the election by presenting their economic vision as one of equality and fairness.

In attacking the coalition’s economic plans, Labour have already been presented a massive opportunity by the UK’s return to recession, and faltering voter confidence in the coalition policies was shown by Labour’s massive local election victories. Furthermore, Cameron called today for the adoption of UK economic policies throughout the Eurozone, and who in their right mind espouses an economic policy so consistently failing. Labour can surely use Cameron’s speech today to present the prime minister as hellbent on austerity due to his ideological interests, as surely any pragmatic leader would look to change course so as to restore growth.

To restore faith in Labour’s ability to handle the economy the two Eds must acknowledge first and foremost that Labour under Gordon Brown made mistakes and they must accept that voters still have not forgiven these mistakes. They must use this opportunity to distance themselves from the old Labour regime and stamp their own authority on the Labour party. One question always asked of me regarding Ed Miliband is “what does he stand for?”, and it is a question I struggle to answer and usually I respond with vague murmurings about fairness and equality. I believe that, even if voters do not trust Labour to deliver economic excellence, they are currently seen as the party of fairness, and I believe Ed should make fairness central to his agenda as a whole, and his economic policy. Tory cuts are ideological and ruthless and must be attacked as so, whilst Labour must produce a correctly costed economic policy which restores growth and jobs to the working-class and squeezed middle, regaining voters lost to the Tories in 2010. Whilst I believe Labour has been right to keep its cards close to its chest up to this point regarding a potential spending plan post-2015, now the two Eds must deliver a credible alternative.

Therefore, it is key now that Labour takes advantage of what may be the best opening they get regarding economic policy in this government’s term in office. To take full advantage Labour has to produce a credible alternative, correctly costed, which produces a narrative for Labour’s route back to power, one of equality of opportunity, fairness and growth.

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