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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The most terrifying thing about Donald Trump's speech? What he didn't say

No politician uses official speeches to put across their most controversial ideas. But Donald Trump's are not hard to find. 

As Donald Trump took the podium on a cold Washington day to deliver his inauguration speech, the world held its breath. Viewers hunched over televisions or internet streaming services watched Trump mouth “thank you” to the camera, no doubt wondering how he could possibly live up to his deranged late-night Twitter persona. In newsrooms across America, reporters unsure when they might next get access to a president who seems to delight in denying them the right to ask questions got ready to parse his words for any clue as to what was to come. Some, deciding they couldn’t bear to watch, studiously busied themselves with other things.

But when the moment came, Trump’s speech was uncharacteristically professional – at least compared to his previous performances. The fractured, repetitive grammar that marks many of his off-the-cuff statements was missing, and so, too, were most of his most controversial policy ideas.

Trump told the crowd that his presidency would “determine the course of America, and the world, for many, many years to come” before expressing his gratefulness to President Barack Obama and Michelle Obama for their “gracious aid” during the transition. “They have been magnificent," Trump said, before leading applause of thanks from the crowd.

If this opening was innocent enough, however, it all changed in the next breath. The new president moved quickly to the “historic movement”, “the likes of which the world has never seen before”, that elected him President. Following the small-state rhetoric of his campaign, Trump promised to take power from the “establishment” and restore it to the American people. “This moment," he told them, “Is your moment. It belongs to you.”

A good deal of the speech was given over to re-iterating his nationalist positions while also making repeated references to the key issues – “Islamic terrorism” and families – that remain points of commonality within the fractured Republican GOP.

The loss of business to overseas producers was blamed for “destroying our jobs”. “Protection," Trump said, “Will lead to great strength." He promised to end what he called the “American carnage” caused by drugs and crime.

“From this day forward," Trump said, “It’s going to be only America first."

There was plenty in the speech, then, that should worry viewers, particularly if you read Trump’s promises to make America “unstoppable” so it can “win” again in light of his recent tweets about China

But it was the things Trump didn't mention that should worry us most. Trump, we know, doesn’t use official channels to communicate his most troubling ideas. From bizarre television interviews to his upsetting and offensive rallies and, of course, the infamous tweets, the new President is inclined to fling his thoughts into the world as and when he sees fit, not on the occasions when he’s required to address the nation (see, also, his anodyne acceptance speech).

It’s important to remember that Trump’s administration wins when it makes itself seem as innocent as possible. During the speech, I was reminded of my colleague Helen Lewis’ recent thoughts on the “gaslighter-in-chief”, reflecting on Trump’s lying claim that he never mocked a disabled reporter. “Now we can see," she wrote, “A false narrative being built in real time, tweet by tweet."

Saying things that are untrue isn’t the only way of lying – it is also possible to lie by omission.

There has been much discussion as to whether Trump will soften after he becomes president. All the things this speech did not mention were designed to keep us guessing about many of the President’s most controversial promises.

Trump did not mention his proposed ban on Muslims entering the US, nor the wall he insists he will erect between America and Mexico (which he maintains the latter will pay for). He maintained a polite coolness towards the former President and avoiding any discussion of alleged cuts to anti-domestic violence programs and abortion regulations. Why? Trump wanted to leave viewers unsure as to whether he actually intends to carry through on his election rhetoric.

To understand what Trump is capable of, therefore, it is best not to look to his speeches on a global stage, but to the promises he makes to his allies. So when the President’s personal website still insists he will build a wall, end catch-and-release, suspend immigration from “terror-prone regions” “where adequate screening cannot occur”; when, despite saying he understands only 3 per cent of Planned Parenthood services relate to abortion and that “millions” of women are helped by their cancer screening, he plans to defund Planned Parenthood; when the president says he will remove gun-free zones around schools “on his first day” - believe him.  

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland