Ed Balls's speech to Labour conference was perhaps the most confident and memorable he has ever given. His delivery was faltering at times but his well-honed message was as clear as ever: George Osborne's plan is hurting but it's not working. With growth down and unemployment up, Labour's Keynesian rottweiler had plenty to get his teeth into.
As an alternative, Balls offered his own five-point plan for growth, the most eye-catching part of which was a one-year National Insurance holiday for all firms that take on extra workers. In the most effective line of his speech, he declared: "Call it Plan A plus, call it Plan B, call it Plan C, I don't care what they call it. Britain just needs a plan that works".
The section on Labour's "new fiscal rules" was less detailed than some expected but Balls set out his intention to offer "fiscal responsibility in the national interest", a message we haven't heard from his party for some time. The next Labour government will, he promised, "get our country's current budget back to balance" and set "national debt on a downward path." The timeline for doing so, however, remains unspecified (rightly, Balls refuses to set arbitrary targets).
Sounding a note of contrition, he also offered a fulsome list of Labour's "mistakes", namely the 75p pension rise, the abolition of the 10p tax rate, the failure to get "all employers to train", and the weak controls on migration from eastern Europe. But he rightly refused to accept that Labour was "profligate" in office, reminding the hall that "we went into the crisis with lower national debt than we inherited in 1997 and lower than America, France, Germany and Japan." (As a percentage of GDP, debt fell from from 42.5 per cent of GDP in 1997 to 36.5 per cent in 2007.)
Not all of what Balls said went down well with the party faithful. There was silence as he insisted that Labour could not promise to reverse particular Tory spending cuts or tax rises, and as he warned that pensions strikes this autumn would play into George Osborne's hands. Significantly, he added that under Labour "contributions and the retirement age would be rising too." His pledge to use any windfall from the bank sell-off to reduce the deficit, not to cut taxes, won applause, although some on the left would prefer a radical commitment to mutualise the banks and turn them into engines of growth.
But he finished strongly with a rhetorical assault on Osborne's boast that Britain is a "safe haven". It might be a safe haven for David Cameron and George Osborne and Boris Johnson and their friends, he said, but it is not a safe haven "for the 16,000 companies that have gone out of business in the last year". Unlike Vince Cable (who spoke of "grey skies" in his conference speech), he ended on a positive note, promising to show that "there can be a better future". And rightly so. History shows that progressive parties don't win elections unless they offer a hopeful vision of the future.
Balls had the energy and spirit of a man who knows that he is winning the argument. With even the IMF now warning that Osborne may have to slow the pace of the cuts if growth continues to disappoint, the consensus is slowly turning against austerity. As the economic data continues to worsen, Balls will win further converts to his approach.