Miliband doesn’t want to sack Balls – he just wants to steal the Treasury’s power

The Labour leader's plans for government can factor in the prospect of having Balls as his chancellor, but in a shrunken empire.

For three stagnant years, Labour failed to convince people that the country’s economic troubles were George Osborne’s fault. Now, Ed Miliband and Ed Balls want to persuade voters that the Chancellor has cooked up the wrong sort of recovery. The strength of this argument is that optimistic headlines belie household experiences of on­going hardship. The weakness is that Labour can’t prove that things would have been any better if it had been in charge. Opinion polls suggest that many think they would have been worse.

There is also a sound argument that the growth in Britain’s economy is uneven and unsustainable. The coalition promised a nationwide, export-driven manufacturing renaissance. Instead, we have a sugar rush of cheap credit, house-price inflation and consumer spending in the south-east. Again, that doesn’t help the opposition if it can’t be proved that Ed Balls would have presided over a higher-spec recovery.

Labour’s top team affects confidence that the coalition will be punished by the majority of people who will still feel worse off in 2015 than they did in 2010. But nerves are fraying. Privately, senior shadow cabinet ministers admit that the economy could hit a “sweet spot” for Osborne in time for the general election. The Tories don’t need voters to feel jubilant about their personal circumstances as long as they sense that things are moving in the right direction and think that it still feels a bit dicey to gamble on regime change.

Miliband is running out of time to persuade people that he knows how to secure a brighter tomorrow. The urgency breeds resentment in the leader’s office of time wasted by the shadow chancellor touting his “five-point plan for jobs and growth” – the abandoned recipe for a brighter yesterday.

That isn’t the only source of frustration with Ed Balls. He is resented by the left of the party for failing to hold the line against austerity. Activists smell treason in every move to reassure less partisan voters that an incoming Labour government wouldn’t go on a spending spree. Balls has accepted a public-sector pay freeze and a cap on social security spending. He has launched a “zero-based” spending review with an instruction to shadow ministers to identify cuts in their prospective departments. He has offered to have his plans vetted by the Office for Budget Responsibility. He has pledged to run a Budget surplus by 2020.

Balls gets little credit for those vows of frugality. The Tories are good at drowning out actual Labour policy with attacks on what they want the policy to be. And the opposition sounds its media horn louder when steering to the left: restoring the 50p tax rate or controlling energy prices. It also doesn’t help that Balls lacks friends in the corner of the party that was calling for more fiscal rigour back in 2010. This is the tribe that fashions itself as “Labour modernisers” since “Blairite” has become a term of abuse.

They want Labour to say more about failures of the state as the counterpart to Miliband’s attacks on failed markets. In that context, Balls is seen as a repository of risk-averse Treasury orthodoxy; an obstacle to public-sector reform. That perception fuels suspicion of the zero-based spending review. In theory, it is pro-reform, because it invites shadow ministers to consider innovative ways to deliver services without spending more money. Yet it gives Balls a licence to meddle in every nook of Labour’s agenda. Viewed from the leader’s office, this looks like empire-building. Enough Labour people see Balls as an encumbrance to sustain a constant level of chatter about his prospects of being sacked. It is a theme loved by Tories who like to imagine his relationship with the Labour leader as a B-list sequel to the blockbuster Blair-Brown schism.

It is no secret that Balls was not Miliband’s first choice. The appointment was made in January 2011, when the Labour leader’s authority was at a low ebb. Since then, he has shored up his position, managing rival factions, co-opting Balls’s old allies where necessary. Last October’s shadow cabinet promotions of Michael Dugher to a roving Cabinet Office brief and Vernon Coaker to the Defence portfolio are widely interpreted this way. The need to signal beyond doubt which of the Eds is in charge has been a routine preoccupation in the leader’s office.

No one who has closely observed the way Miliband operates doubts his capacity to be ruthless. Shadow cabinet ministers speculate that he would get rid of Balls without hesitation if he believed it was a condition of getting over the threshold of No 10. For the time being, the calculation must be that sacrificing the party’s most experienced political economist would signal panic and allow the Tories to boast that Labour’s capitulation to the Osborne plan was complete. Even shadow ministers who don’t much like Balls say his contributions are usually the most insightful in shadow cabinet meetings.

That doesn’t mean the Labour leader trusts his shadow chancellor to run the party’s economic policy. The case that Miliband wants to make flows from his conviction that insecurity and uneven reward are hard-wired into British capitalism. He wants to “rewrite the rules” – an ambition that ranges far beyond fiscal management to cover an interventionist industrial policy, corporate governance reform and devolution of power to local level. A notable feature of that agenda is how thoroughly it would dilute the dominance of the Treasury. In other words, Miliband’s plans for government can factor in the prospect of having Balls as his chancellor, but in a shrunken empire.

It has taken three years for Miliband to win the right to decide what Labour’s economic offer should be. It has taken skilful, subtle manoeuvring. Now control of the message is his. The challenge is getting anyone beyond the party to listen.
 

Ed Miliband and Ed Balls at the Labour conference in Brighton last year. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 29 January 2014 issue of the New Statesman, The seven per cent problem

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In the 1980s, I went to a rally where Labour Party speakers shared the stage with men in balaclavas

The links between the Labour left and Irish republicanism are worth investigating.

A spat between Jeremy Corbyn’s henchfolk and Conor McGinn, the MP for St Helens North, caught my ear the other evening. McGinn was a guest on BBC Radio 4’s Westminster Hour, and he obligingly revisited the brouhaha for the listeners at home. Apparently, following an interview in May, in which McGinn called for Corbyn to “reach out beyond his comfort zone”, he was first threatened obliquely with the sack, then asked for a retraction (which he refused to give) and finally learned – from someone in the whips’ office – that his party leader was considering phoning up McGinn’s father to whip the errant whipper-in into line. On the programme, McGinn said: “The modus operandi that he [Corbyn] and the people around him were trying to do [sic], involving my family, was to isolate and ostracise me from them and from the community I am very proud to come from – which is an Irish nationalist community in south Armagh.”

Needless to say, the Labour leader’s office has continued to deny any such thing, but while we may nurture some suspicions about his behaviour, McGinn was also indulging in a little airbrushing when he described south Armagh as an “Irish ­nationalist community”. In the most recent elections, Newry and Armagh returned three Sinn Fein members to the Northern Ireland Assembly (as against one Social Democratic and Labour Party member) and one Sinn Fein MP to Westminster. When I last looked, Sinn Fein was still a republican, rather than a nationalist, party – something that McGinn should only be too well aware of, as the paternal hand that was putatively to have been lain on him belongs to Pat McGinn, the former Sinn Fein mayor of Newry and Armagh.

According to the Irish News, a “close friend” of the McGinns poured this cold water on the mini-conflagration: “Anybody who knows the McGinn family knows that Pat is very proud of Conor and that they remain very close.” The friend went on to opine: “He [Pat McGinn] found the whole notion of Corbyn phoning him totally ridiculous – as if Pat is going to criticise his son to save Jeremy Corbyn’s face. They would laugh about it were it not so sinister.”

“Sinister” does seem the mot juste. McGinn, Jr grew up in Bessbrook during the Troubles. I visited the village in the early 1990s on assignment. The skies were full of the chattering of British army Chinooks, and there were fake road signs in the hedgerows bearing pictograms of rifles and captioned: “Sniper at work”. South Armagh had been known for years as “bandit country”. There were army watchtowers standing sentinel in the dinky, green fields and checkpoints everywhere, manned by some of the thousands of the troops who had been deployed to fight what was, in effect, a low-level counter-insurgency war. Nationalist community, my foot.

What lies beneath the Corbyn-McGinn spat is the queered problematics of the ­relationship between the far left wing of the Labour Party and physical-force Irish republicanism. I also recall, during the hunger strikes of the early 1980s, going to a “Smash the H-Blocks” rally in Kilburn, north London, at which Labour Party speakers shared the stage with representatives from Sinn Fein, some of whom wore balaclavas and dark glasses to evade the telephoto lenses of the Met’s anti-terrorist squad.

The shape-shifting relationship between the “political wing” of the IRA and the men with sniper rifles in the south Armagh bocage was always of the essence of the conflict, allowing both sides a convenient fiction around which to posture publicly and privately negotiate. In choosing to appear on platforms with people who might or might not be terrorists, Labour leftists also sprinkled a little of their stardust on themselves: the “stardust” being the implication that they, too, under the right circumstances, might be capable of violence in pursuit of their political ends.

On the far right of British politics, Her Majesty’s Government and its apparatus are referred to derisively as “state”. There were various attempts in the 1970s and 1980s by far-right groupuscules to link up with the Ulster Freedom Fighters and other loyalist paramilitary organisations in their battle against “state”. All foundered on the obvious incompetence of the fascists. The situation on the far left was different. The socialist credentials of Sinn Fein/IRA were too threadbare for genuine expressions of solidarity, but there was a sort of tacit confidence-and-supply arrangement between these factions. The Labour far left provided the republicans with the confidence that, should an appropriately radical government be elected to Westminster, “state” would withdraw from Northern Ireland. What the republicans did for the mainland militants was to cloak them in their penumbra of darkness: without needing to call down on themselves the armed might of “state”, they could imply that they were willing to take it on, should the opportunity arise.

I don’t for a second believe that Corbyn was summoning up these ghosts of the insurrectionary dead when he either did or did not threaten to phone McGinn, Sr. But his supporters need to ask themselves what they’re getting into. Their leader, if he was to have remained true to the positions that he has espoused over many years, should have refused to sit as privy counsellor upon assuming his party office, and refused all the other mummery associated with the monarchical “state”. That he didn’t do so was surely a strategic decision. Such a position would make him utterly unelectable.

The snipers may not be at work in south Armagh just now – but there are rifles out there that could yet be dug up. I wouldn’t be surprised if some in Sinn Fein knew where they are, but one thing’s for certain: Corbyn hasn’t got a clue, bloody or otherwise. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser