YP Ed Balls doesn’t need to be nice….
published in the Yorkshire Post 1 Oct 2012
All this year, the Shadow Chancellor, Ed Balls has been pursuing a dogged charm offensive with Britain’s voters. At regular intervals, he has been telling the media about things which make him cry, or about what a dab hand he is in the kitchen.
He should forget the blubbing and the baking. Being Chancellor of the Exchequer is one job in British politics where you do not have to be a nice person. The same is true of being Shadow Chancellor. Ed Balls has done the easy parts of that job. He has got under the skin of David Cameron, with his handjiving performances at Prime Minister’s Question time. He has convinced voters that the government’s economic policy is mistaken, helped by the very obvious evidence that it is not working. But he must now do the hard part of the job – giving voters solid reasons for believing that the economy would be improved if he took charge of it.
To achieve this, Ed Balls needs to offer them much more than his present mantra or even his present masterplan. He has taught the mantra to all his colleagues: the government is trying to cut the deficit too far and too fast. That is a comparative statement, which makes sense only in contrast to deficit reduction which is not too far or too fast. If Ed Balls has a Goldilocks “just right” anti-deficit plan he should reveal it – and what it means for public spending in each department, tax rates and borrowing.
Ed Balls’s masterplan has five elements. Three of them are problematic. A tax on bankers’ bonuses to fund a building programme with jobs for young people… Does that mean that if bankers stopped paying themselves bonuses we would not get the building programme and the new jobs? Tax breaks for small firms taking on extra workers… That could be a free gift for firms who were planning to do that anyway. A temporary VAT cut… That wastes tax revenue on the rich and on imports. It does little for the British economy to cut the price of a new Ferrari. But even if all five of the ideas were well-conceived the plan is simply too small in scale to match Britain’s economic problems. It is reminiscent of the mini-Budgets which Chancellors used to “steer the economy” in the Sixties – and that is a land of lost content. Our economy no longer responds to a ”touch on the tiller.”
Ed Balls should fill in the missing squares in his economic policy – starting with his party conference speech today.
He needs to present a credible plan for making the eurozone work with its present membership, or (better) to prepare an orderly return to national currencies for countries that cannot live with the euro. In either case, he needs to be clear about this country’s financial commitment to support for the euro and its future relationship with whatever eurozone survives.
He should reveal new plans for the regulation of banks and the financial sector. These will have to make voters forget the “light-touch” system of the last Labour government, which he and Gordon Brown boasted about before the crash.
Instead of sympathetic noises about the squeezed middle classes, he should show plans for tax and welfare reform that would help those really squeezed, among the working poor, rather than those who feel sorry for themselves. He should be preparing to simplify the tax system dramatically, instead of making it more complex as Gordon Brown loved to do, and to make sure that super-rich stand-up comedians and stand-up corporations actually pay taxes to the Exchequer rather than leave tips.
When he is done with that, Ed Balls could show voters how he intends to fund future pension liabilities and care of the elderly. Then he should produce plans to fund investment in renewable energy sources and more importantly in energy saving and the promotion of sustainable lifestyles. He should then announce new plans for combating world poverty.
Above all, Ed Balls needs to tell the British people where he intends to find new sources of jobs and growth in the economy – a realistic alternative to the last Labour government’s policy of letting the financial sector rip.
On all of these questions, Ed Balls needs to deal honestly with a fundamental fact which almost no one in British politics or industry has the nerve to mention. The average daily wage in China is less than 10 per cent of that in Britain, and pays for an urban workforce which is better trained and qualified and more productive than our own, and which is constantly renewed by internal migration from China’s rural areas. Against that background, how does he expect to maintain real incomes in our country and the present level of public services and entitlements?
If Ed Balls achieved all of these tasks, especially the last one, his ratings would soar even if voters thought he had all the charm of a dead jellyfish.