Ed Balls seeks to restore Labour's economic credibility

 

Ed Balls shadow chancellor: "In tough economic times we have to make difficult choices about priorities"

On Budget Day in just two years' time the man holding the red box outside No 11 may be Labour's Ed Balls. That will only happen if he can restore Labour's economic credibility.

Today the shadow chancellor came to the City to deliver a speech designed to do just that. His message was the same as ever and yet different.

As always he claimed that the government's austerity economics was failing and forcing ministers to search for another £11bn in cuts they never planned to make.

However, he also acknowledged that Labour would have no choice but to go along with many of those cuts and would treat them as "a starting point" for their policies in government.

In other words he was telling his party, as well as the country, that for all his talk of growth and jobs the next Labour government will find itself having to cut day-to-day spending more and tax more too - albeit according to different priorities.

Those hoping he would spell out Labour's spending plans for 2015 - the first year they might be in office - and set out his so-called fiscal rules - ie how fast he aims to reduce the deficit and Britain's debt - were disappointed. He insists that with the economy so uncertain now is not the time.

However, there was one firm commitment - Labour says that the 600,000 pensioners who earn enough to pay higher or top rate tax should no longer get the annual winter fuel allowance.

This is more symbolically significant than it is economically. After all, the party has always stressed its commitment to universalism - the idea that all get the same benefit regardless of their incomes - as a way of binding society together. Besides, as I pointed out to the shadow chancellor, it saves just £100m, which is not much more than one thousandth of the projected annual deficit in 2015.

A sign of how big a step the party regards this is the fact that Mr Balls insisted that Labour would keep the free pensioners bus pass and free prescriptions. The party remembers all too well how Gordon Brown used the threat to benefits to the elderly as a stick to beat David Cameron with at the last election.

Labour opposed the coalition's cut to child benefit for those on higher and top rate tax and still insists it was unfair. It is projected to raise 23 times more than means testing winter fuel payments. So, either Balls will have to be clear that it is a cut he can't restore, or he will have to come up with a new more affordable lower level of child benefit which all can receive.

In truth, economic credibility depends less on published plans and more on public trust. That is why Ed Balls won't stop reminding voters that the coalition's economic plans are way off course and leading to cuts they never dreamt of making.

However, he - unlike most opposition spokesman - also has a personal record to defend. For years he was Gordon Brown's chief economic adviser - in reality if not always in name. Today he insisted that Labour had not been profligate in those years.

His Tory opponents beg to differ of course and having long memories or, perhaps just access to Google, discovered that 17 years ago another shadow chancellor promised the same "iron discipline". Yes, that was Mr Brown.

 
Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
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    Comment number 358.

    The J Hoovers Witness
    Credibility or Credulity?

    Is it more than rumour, 'Gordon's sale of Cheap Gold' was 'required', for a system rescue - not just one or two imprudent banks, but the first dominoes?

  • rate this
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    Comment number 357.

    20.Paul Lloyd

    "...Labour? The last Labour government, only they could sell gold at a loss..."

    ===

    Since it has lost $400/oz over the last 9 months, I think you'll find quite a few others have managed that too.

  • rate this
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    Comment number 356.

    352 GF I am not convinced that the bubble was essentially a problem with probity that regulation of the sort you envisage could have solved. Its true that there have been no prosecutions where there should have been, but we need to look at the inherent instability of the free market in debt creation and introduce natural stabilisation that doesnt rely on reactive policy or bankers being honest.

  • rate this
    0

    Comment number 355.

    How to "restore" Labour's "economic credibility", to eclipse the "credibility" of the Coalition?

    What explains the political superficiality of such a question, from a senior BBC reporter and commentator?

    Responsibility to the public is not escaped by mocking the feet of clay, by Nick or by Stephanie (there WAS an answer to my killer question)

    After the advocates, juries must hear from judges

  • rate this
    0

    Comment number 354.

    269 theblamegame. the conservative party is a party for open minded modern people who have a liberal attitude to 21st century life and our democratic society in general. i suppose peope just like you. um, what exactly are your views on same sex marriages?

 

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