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 UK press’s timid reaction to Brexit is in marked contrast to the satire unleashed on Trump

For the BBC, it seems, to question leaving the EU is to be unpatriotic.

Faced with arguably their biggest political-cum-constitutional ­crisis in half a century, the press on either side of the pond has reacted very differently. Confronting a president who, unlike many predecessors, does not merely covertly dislike the press but rages against its supposed mendacity as a purveyor of “fake news”, the fourth estate in the US has had a pretty successful first 150-odd days of the Trump era. The Washington Post has recovered its Watergate mojo – the bloodhound tenacity that brought down Richard Nixon. The Post’s investigations into links between the Kremlin and Donald Trump’s associates and appointees have yielded the scalp of the former security adviser Michael Flynn and led to Attorney General Jeff Sessions recusing himself from all inquiries into Trump-Russia contacts. Few imagine the story will end there.

Meanwhile, the New York Times has cast off its image as “the grey lady” and come out in sharper colours. Commenting on the James Comey memo in an editorial, the Times raised the possibility that Trump was trying to “obstruct justice”, and called on Washington lawmakers to “uphold the constitution”. Trump’s denunciations of the Times as “failing” have acted as commercial “rocket fuel” for the paper, according to its CEO, Mark Thompson: it gained an “astonishing” 308,000 net digital news subscriptions in the first quarter of 2017.

US-based broadcast organisations such as CNN and ABC, once considered slick or bland, have reacted to Trump’s bullying in forthright style. Political satire is thriving, led by Saturday Night Live, with its devastating impersonations of the president by Alec Baldwin and of his press secretary Sean Spicer by the brilliant Melissa McCarthy.

British press reaction to Brexit – an epic constitutional, political and economic mess-up that probably includes a mind-bogglingly destructive self-ejection from a single market and customs union that took decades to construct, a move pushed through by a far-right faction of the Tory party – has been much more muted. The situation is complicated by the cheerleading for Brexit by most of the British tabloids and the Daily Telegraph. There are stirrings of resistance, but even after an election in which Theresa May spectacularly failed to secure a mandate for her hard Brexit, there is a sense, though the criticism of her has been intense, of the media pussy-footing around a government in disarray – not properly interrogating those who still seem to promise that, in relation to Europe, we can have our cake and eat it.

This is especially the case with the BBC, a state broadcaster that proudly proclaims its independence from the government of the day, protected by the famous “arm’s-length” principle. In the case of Brexit, the BBC invoked its concept of “balance” to give equal airtime and weight to Leavers and Remainers. Fair enough, you might say, but according to the economist Simon Wren-Lewis, it ignored a “near-unanimous view among economists that Brexit would hurt the UK economy in the longer term”.

A similar view of “balance” in the past led the BBC to equate views of ­non-scientific climate contrarians, often linked to the fossil-fuel lobby, with those of leading climate scientists. Many BBC Remainer insiders still feel incensed by what they regard as BBC betrayal over Brexit. Although the referendum of 23 June 2016 said nothing about leaving the single market or the customs union, the Today presenter Justin Webb, in a recent interview with Stuart Rose, put it like this: “Staying in the single market, staying in the customs union – [Leave voters would say] you might as well not be leaving. That fundamental position is a matter of democracy.” For the BBC, it seems, to question Brexit is somehow to be unpatriotic.

You might think that an independent, pro-democratic press would question the attempted use of the arcane and archaic “royal prerogative” to enable the ­bypassing of parliament when it came to triggering Article 50, signalling the UK’s departure from the EU. But when the campaigner Gina Miller’s challenge to the government was upheld by the high court, the three ruling judges were attacked on the front page of the Daily Mail as “enemies of the people”. Thomas Jefferson wrote that he would rather have “newspapers without a government” than “a government without newspapers”. It’s a fair guess he wasn’t thinking of newspapers that would brand the judiciary as “enemies of the people”.

It does seem significant that the United States has a written constitution, encapsulating the separation and balance of powers, and explicitly designed by the Founding Fathers to protect the young republic against tyranny. When James Madison drafted the First Amendment he was clear that freedom of the press should be guaranteed to a much higher degree in the republic than it had been in the colonising power, where for centuries, after all, British monarchs and prime ministers have had no qualms about censoring an unruly media.

By contrast, the United Kingdom remains a hybrid of monarchy and democracy, with no explicit protection of press freedom other than the one provided by the common law. The national impulse to bend the knee before the sovereign, to obey and not question authority, remains strangely powerful in Britain, the land of Henry VIII as well as of George Orwell. That the United Kingdom has slipped 11 places in the World Press Freedom Index in the past four years, down to 40th, has rightly occasioned outrage. Yet, even more awkwardly, the United States is three places lower still, at 43rd. Freedom of the press may not be doing quite as well as we imagine in either country.

Harry Eyres is the author of Horace and Me: Life Lessons from an Ancient Poet (2013)

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder