Miliband should sack Ed Balls

Labour cannot hope to rebuild its economic credibility while Balls remains shadow chancellor.

In his upcoming reshuffle, Ed Miliband should replace Ed Balls as shadow chancellor.

The Labour party is currently becalmed, and with it Miliband's leadership. In the 12 months since he replaced Gordon Brown, Labour's poll rating has risen one per cent according to the most recent Populous poll, two points according to MORI. Despite riots, war and economic stagnation Labour's leader cannot break beyond the margin of error.

Those wondering whether phone hacking would be a game changer have their answer. It has changed nothing. Despite his deft response to the crisis almost half of Labour supporters cannot picture Ed Miliband as prime minister, and his general approval ratings are plumbing new depths.

But it's not only Ed Miliband the polling furies have chosen to mock. Unemployment is rising. Business confidence declining. Growth estimates are being frantically revised down. Yet unbelievably, the Conservative party has now opened up a ten point lead over Labour on the issue of who has the best economic policies for the country. Even more staggering, their lead has actually increased since March. The worst things get for the economy, the better things seem to get for George Osborne and his party.

There is a simple reason for this paradox. Labour's own economic policy has no clothes. The deficit is the defining issue in British politics. And Tory attempts to brand Labour as deficit deniers have succeeded beyond their wildest dreams. In fact, they have not so much branded shadow ministers as embalmed them, placed them in a glass case and erected a sign "Deficit Denier, official exhibit, 2010 - present".

No one within the Labour party is prepared to even glance at, never mind acknowledge, this elephant in the shadow cabinet room. Nor are they prepared to acknowledge the even larger elephant balancing upon its shoulders. The person who must take responsibility for this parlous state of affairs is Ed Balls.

Labour's shadow chancellor is one of the few political heavyweights on the front bench. But in this specific brief he is an albatross around his party's neck. All the opinion polls indicate the public blames the economic policies of the previous Labour government for the cuts to thier services, along with the hardship they are experiencing, more than the coalition. And Ed Balls is the individual in the shadow cabinet more closely associated with those policies than any other.

Ed Miliband is acutely aware of the toxic legacy of the Brown premiership. Hence his reluctance to even raise the issue of the economy in the wake of the publication of the Darling memoirs. But if he is wary of discussing economics when David Cameron has a copy of Back from the Brinksitting on his lap, how can he hope to make a case whilst he has Ed Balls sitting on his own?

Nor is this just an issue of legacy. Ed Balls was instrumental in rebuilding Labour's economic credibility from the rubble of the 1992 election defeat. He did it by adhering to a simple golden rule. If Labour couldn't ditch their tax and spend image they were unelectable. Prudence became the watch word. Shadow ministers were banned form making any commitments on spending. Gordon Brown, at Ball's urging, pledged to stick to Tory spending limits, and did so even after Labour's landslide 1997 election victory.

Yet as shadow chancellor Ed Balls seems intent on unlearning every rule he once imposed with iron, and occasionally brutal, discipline on others. Labour's policy has not just regressed to tax and spend. It's now cut tax and spend. New expenditure commitments are tossed around like confetti. Tax cuts bounced out with no internal consultation. Prudence has been ditched, replaced by that leather clad vixen, Ms Pump Primer.

What is Ed Balls thinking? It's not just that he's trying to get the voters to embrace an economic agenda they rejected decisively at the 2010 election. They're being asked to endorse economic policies they rejected at the 1979 election. The perception of fiscal profligacy isn't a dead end for the Labour party. It's political hemlock. We know this because Ed Balls told us it was. And he was right.

Labour's economic policy is no longer grounded in political reality, but in a combination of misguided loyalty, stubbornness and Keynesian economic orthodoxy. Ed Balls seems to believe distancing himself from the policies of Gordon Brown would represent a form of betrayal. It would not. It's just the price of doing business for a new party of opposition. He also seems to equate dogma with strength. Yet by sticking unflinchingly to the failed strategy of a failed manifesto he is reinforcing every negative stereotype his enemies have ever sought to construct around him. "The reckless thing to do is plough on regardless", he told Tribune this week. Too right.

Ed Balls is shadow chancellor. His is not chancellor. His prescriptions for the nation's ills may be economically sound. But they are politically unsustainable. Saying 'I was right, you were wrong' to your political opponents, is one thing. Saying it to the voters is a different matter entirely.

He seems unable, or unwilling, to acknowledge this. A destructive combination of loyalty, stubbornness and pride have locked him into a strategy from which he cannot escape. Which is why, at the next shadow cabinet reshuffle, Ed Miliband needs to set Ed Balls and his party free.

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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.