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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The Conservatives' social care woes are real

The "dementia tax" has made waves in the marginals - and not in a good way.

Will the dementia tax cost Theresa May her house? That's the gag in Morten Morland's cartoon in the Times this morning, which depicts a pair of elderly voters angrily remonstrating with the PM outside Downing Street. To make matters worse, that paper reports that the plan may may fall apart anyway due to other problems in social care. "Care crisis threatens to scupper May reforms" is their splash.

I was out and about in Bath, Newport and Gower this weekend and it was clear to me that the Conservatives' social care policy has made waves in the marginals and not in a good way. That's not just my impression, either. As Denis Campbell and Rowena Mason report in the Guardian, Conservative candidates are uneasy about the reaction too. The blame game is already underway, with Conservative sources telling the FT's Jim Pickard that the plan was rushed through at the last minute without consulting the Cabinet.

That the polls are all showing Labour closing the gap with the Conservatives. That might just be noise - Labour tends to peak a few weeks out from an election. In 1997, they were polling at or above 50 per cent at this stage in the race, they got 43 per cent. In 2001, they were again hovering around the 50 per cent mark and then got 41 per cent. In 2005, they were on 40 per cent and ended up with 35 per cent. In 1987 they were at 35 per cent and ended up with 30 per cent. In 1983 they were at 35 per cent and got 27 per cent. But that pattern doesn't always hold and it might not this time either.

The Conservatives' big hope is that in the final weeks they will unleash everything they've dug up on Jeremy Corbyn and his inner circle, turning around the polls. First up: the Labour leader's dealings with the IRA in the 1980s. Corbyn's refusal to condemn the IRA's bombings exclusively - he instead said he condemned "all bombing by both the loyalists and the IRA" - on the Sophy Ridge programme yesterday is picked up in today's papers. "Corbyn engulfed in IRA furore" is the Telegraph's splash and "Corbyn's kick in the teeth for IRA victims" is the Mail's.

Will it work? Maybe. The Conservatives' poll ratings still have a way to fall before they have genuine cause for panic and the historical trends still point to them improving on their current position in the polls and significantly increasing their strength in the House of Commons.

But the difficulty for the PM is that that her victory, if it comes, looks less and less like an endorsement for her ripping up of Conservative heresies and more and more like a referendum on Jeremy Corbyn.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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