Balls has got the Tories on the run

The energetic shadow chancellor is challenging the coalition's missteps at every turn.

The battle over the appropriateness of the coalition's economic policy has truly commenced and the amateurs are no longer dominating. A professional economist has arrived on the scene in the form of the shadow chancellor, Ed Balls, whose energetic interventions, as I suspected they would, are beginning to put coalition ministers on the back foot. Ed is highly effective and is challenging the coalition's missteps at every turn. His alternative strategy is to cut the deficit more slowly and not to compromise growth.

The shadow chancellor's Budget broadcast seemed particularly on point and contained a big apology. Balls agreed that regulation should have been tougher but: "Every government in the world got that wrong -- and I'd like to say sorry for the part that I and the last Labour government played in that." And he rightly pointed out that the Tories are not innocent, as they continually argued for even lighter regulation.

Ed had several sound bites that will surely have some resonance with the general public. "Our economy, which was working, has now ground to a halt." "By cutting too far and too fast, George Osborne isn't solving the problem -- he is in danger of making it worse." "But George Osborne is going too far and too fast and we're paying the price in lost jobs and slower growth." "So I fear that George Osborne's plan won't just hurt, it won't work." This counterattack seems to be working: at PMQs last week, an obviously rattled David Cameron snapped angrily that Balls is "the most annoying person in modern politics". Ed is obviously getting to the Prime Minister. Good. That means our shadow chancellor is doing his job.

Of particular interest are the claims made by Chancellor Osborne that the OECD is a big fan of his policies. He even referred to a letter he received from the right-wing boss of the OECD, Angel Gurria, in which he said that "while this budget contains hard measures, we are convinced that they are unavoidable in the short term to pave the way for a stronger recovery. By sticking to the fiscal consolidation plan set out last year, the United Kingdom will continue along the road towards stability."

Interestingly, today, in its interim assessment of the G7 economies, the OECD made clear that it thinks that the UK economy will grow more slowly than any other G7 economy except Japan, which has just been hit by tempest and flood. The OECD also revised their forecast for Q2 2011 from 1.3 per cemt to 1 per cent on an annualised basis. At the same time, it upgraded its forecasts for many G7 economies, predicting second-quarter growth in the US, France and Germany of 3.4 per cent, 2.8 per cent and 2.3 per cent, respectively. If the policies are so great, how come the OECD lowered their forecast for growth in the UK but raised it in all the other OECD countries that are not implementing austerity? I suspect Ed may well be picking up on this rather glaring contradiction.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Want to beat Theresa May? First, accept that she's popular

The difficult truth for the centre and left, and advocates of a new party, is that people don't "vote for the Tories reluctantly".

An election campaign that has been short on laughs has been livened up by a modest proposal by an immodest man: the barrister Jolyon Maugham, who used to write about tax for the New Statesman as well as advising Eds Miliband and Balls, has set out his (now mothballed) plans for a new party called Spring.

The original idea was a 28-day festival (each day would be celebrated with the national costumes, food and drink of one of the European Union’s member states) culiminating in the announcement of the candidacy of Spring’s first parliamentary candidate, one Jolyon Maugham, to stand against Theresa May in her constituency of Maidenhead. He has reluctantly abandoned the plan, because there isn’t the time between now and the election to turn it around.

There are many problems with the idea, but there is one paragraph in particular that leaps out:

“Like Sherlock Holmes and Moriarty, Labour’s left and moderates are bent on one another’s destruction. No one knows what the Lib Dems are for – other than the Lib Dems. And we vote for the Tories reluctantly, lacking an alternative.”

Even within this paragraph there are a number of problems. Say what you like about Sherlock Holmes and Moriarty but it seems hard to suggest that there is not a fairly large difference between the two – regardless of which one you think is which – that might perhaps be worth engaging with. There are fair criticisms of the Liberal Democrats’ uncertain start to this campaign but they have been pretty clear on their platform when they haven’t been playing defence on theological issues.

But the biggest problem is the last sentence: “We vote for the Tories reluctantly, lacking an alternative”. A couple of objections here: the first, I am not sure who the “we” are. Is it disgruntled former Labour members like Maugham who threw their toys out of the pram after Corbyn’s second successive leadership victory? If you are voting for the Tories reluctantly, I have invented a foolproof solution to “voting for the Tories reluctantly” that has worked in every election I’ve voted in so far: it’s to vote against the Tories.  (For what it’s worth, Maugham has said on Twitter that he will vote for the Liberal Democrats in his home constituency.)

I suspect, however, that the “we” Maugham is talking about are the voters. And actually, the difficult truth for the left and centre-left is that people are not voting for Theresa May “reluctantly”: they are doing it with great enthusiasm. They have bought the idea that she is a cautious operator and a safe pair of hands, however illusory that might be. They think that a big vote for the Tories increases the chance of a good Brexit deal, however unlikely that is.

There is not a large bloc of voters who are waiting for a barrister to turn up with a brass band playing Slovenian slow tunes in Maidenhead or anywhere in the country. At present, people are happy with Theresa May as Prime Minister. "Spring" is illustrative of a broader problem on much of the centre-left: they have a compelling diagnosis about what is wrong with Corbyn's leadership. They don't have a solution to any of Labour's problems that predate Corbyn, or have developed under him but not because of him, one of which is the emergence of a Tory leader who is popular and trusted. (David Cameron was trusted but unpopular, Boris Johnson is popular but distrusted.) 

Yes, Labour’s position would be a lot less perilous if they could either turn around Jeremy Corbyn’s popularity ratings or sub him out for a fresh, popular leader. That’s one essential ingredient of getting the Conservatives out of power. But the other, equally important element is understanding why Theresa May is popular – and how that popularity can be diminished and dissipated. 

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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