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 government's housing policies are dividing London

I am genuinely fearful about the impact that the Government’s forced sale of social housing will have on the most vulnerable. Across the capital, local authority waiting lists are already over-subscribed and families with young children are living in the most desperate and dire circumstances.

The government’s Housing and Planning Bill, which returns to the House of Commons this week, is not fit for purpose. Not only will it not tackle the housing crisis facing the capital, it will actually make the situation worse. Many of the Bill’s most damaging provisions have been pulled apart by the House of Lords, and I would call on the Government to think again before forcing this Bill through Parliament.

This government has long talked of ‘making work pay’ by removing disincentives to work from the welfare system, yet this rhetoric is directly contradicted by the pay to stay rule which will hit households earning over £30,000 (£40,000 in London) with a significant rent hike. Penalising a working couple in this way is a senseless attack on aspiration – it should never make financial sense for someone to cease going out to work to avoid fiscal penalties handed down by the government.

The end of long-term, secure tenancies for families in social housing pours further scorn over two other Tory buzzwords, namely ‘community’ and ‘security’. The Prime Minister has told us that all government policies have to pass the ‘family test’, but there is nothing more damaging to family life and children’s education than moving families from property to property, in and out of school catchment areas and causing endless uncertainty about the future.     

I am genuinely fearful about the impact that the Government’s forced sale of social housing will have on the most vulnerable. Across the capital, local authority waiting lists are already over-subscribed and families with young children are living in the most desperate and dire circumstances.

The Government’s own figures show that rough sleeping has increased 30% in the last year and 102% since the Conservatives came to power in 2010. A separate study by the Combined Homelessness and Information Network found that there are over 7,500 rough sleepers in London alone.

This is nothing short of a scandal, and must serve as an urgent wake-up call. London councils simply do not have the housing stock available to them to provide for all those that need a roof over their head, and Haringey Council are already spending almost £20 million per year on temporary accommodation in a desperate effort to keep children and families from sleeping on the streets.

It is hard to fathom why the Government is planning to push through changes that would reduce social housing stock by 370,000 by 2020 according to the Chartered Institute for Housing. Whether it is the extension of Right-to-Buy or the forced sale of valuable council homes to fund these discounted sales, forcing those on low incomes into the private rented sector will only see the housing benefit bill continue to soar.

Council properties, currently set aside for local people, will instead fall into the hands of speculators and buy-to-let landlords. The Government have not set out a serious plan for how replacement properties will be provided in the same area as the lost homes, with Housing Minister Brandon Lewis telling me that housing associations will merely “have the flexibility” to replace lost stock nationally.

What is needed is more council homes for social rent. Recent history tells us that property developers and the free market won’t supply these homes – there is far too much money to be made in building high end high rise blocks for wealthy foreign buyers – so we must provide councils with the funds to build the homes so badly needed.

Not only is the Government failing to provide for the most vulnerable in our society, the Bill also makes a mockery of the Government’s apparent commitment to providing ‘affordable’ housing for those looking to get on to the housing ladder. A cap of £450,000 is 30 times the annual salary of someone employed on the Government’s celebrated ‘living wage’. The Tory front bench needs to face up to the fact that their definition of affordability means absolutely nothing of the sort to most ordinary Londoners.

What message does it send out about aspiration when only those with the help of cash-rich parents are able to get on the property ladder, no matter how hard they work?

It isn’t just the Labour Party, the House of Lords and housing charities that are calling on the Government to think again. Former DCLG Permanent Secretary and Head of the Civil Service Lord Kerslake and two prominent Conservative local government leaders – Local Government Association (LGA) Chairman Gary Porter and Chair of the LGA Conservative Group David Hodge have also publicly made their concerns known.

If the Government carries on down this path without taking the dire need to build more houses seriously, our capital city will soon be unrecognisable. Inner London is fast becoming the preserve of the super-rich and shady off-shore investors while in the outer boroughs private renters are paying ever-increasing rents to live in overcrowded and substandard homes, in thrall to unregulated landlords free to treat their tenants however they please.

Our great capital is fast turning into two cities as the gap between the haves and the have-nots grows ever larger, and the danger is that if we do not act now this division will become permanent.  

David Lammy is Labour MP for Tottenham