Ed Balls declares: Labour’s cuts would have been too savage

Balls is right. Labour’s spending plans would have meant cuts of 20 per cent.

The coalition may be planning to cut all non-ring-fenced budgets by 25 per cent but it's worth remembering that Labour's cuts wouldn't have been much less savage. The Brown/Darling pledge to halve the deficit by 2014 would have seen cuts of 20 per cent to all non-protected departments.

So Ed Balls's declaration that this promise was a mistake deserves to be taken seriously. It's a more credible position than those campaigning against "Tory cuts" while refusing to accept that this means a slower pace of deficit reduction.

Balls told the BBC:

I always accepted collective responsibility but at the time, in 2009, I thought the pace of deficit reduction through spending cuts was not deliverable, I didn't think it could have been done.

This leaves open the possibility of a more even split between spending cuts and tax rises (George Osborne currently envisages a 77:23 ratio, Darling favoured 67:33). After all, during the last big fiscal tightening undertaken by a Conservative government, Ken Clarke split the pain 50:50 between tax rises and spending cuts. But Balls goes on to suggest that major cuts shouldn't take place until the economy has recovered fully:

We'll have to wait and see where we are once this huge risky experiment has been tried on our economy by the Conservatives and the Liberals. I can't start pre-empting how things will be in a few years' time but, you know, in my department I set out a third of a billion pounds of cuts, so obviously I'm not unafraid to make difficult decisions.

With confirmation today that growth in the first quarter of this year was just 0.3 per cent, the cautionary principle suggests that dramatic cuts should not take place until the economy is out of intensive care.

Balls, like some of his rivals for the Labour leadership, has belatedly adopted a clear line on the deficit. David Miliband has let it be known that he still supports the original pledge to halve the deifict by 2014, while Andy Burnham has come out against the coalition's absurd pledge to ring-fence the £110bn NHS budget.

I've heard remarkably little from either Ed Miliband or Diane Abbott on the deficit, but perhaps Balls's move will stir them into life.

George Eaton is political editor of the New Statesman.

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Hilary Benn has been sacked. What happens now?

Jeremy Corbyn has sacked Hilary Benn, effectively challenging his critics to put up or shut up.

Hilary Benn been sacked from the shadow cabinet, following an article in the Observer reporting that the former shadow foreign secretary had told Labour MPs he would challenge Jeremy Corbyn should Corbyn lose the vote of confidence in his leadership that the PLP are due to discuss on Monday.

Anti-Corbyn plotters are convinced that they have the numbers to pass the no confidence motion in Corbyn’s leadership. Passing that motion, however, would not formally trigger either Corbyn’s resignation or a leadership challenge.

The word from Corbyn’s inner circle is that he would remain in post even if he were to lose the confidence vote, and dare his opponents to collect the 50 names they would need to trigger a leadership challenge.

Should that come about, Corbyn’s allies are certain that they would triumph over whoever ran against him. As one senior source said “they lost really badly in September and that’s not gonna change”.

Labour’s rebels are convinced that they have the numbers necessary to trigger a formal challenge to Corbyn’s leadership.

What happens next is fraught as the relevant clause in Labour’s rulebook is unhelpfully vague: 

“ii. Where there is no vacancy, nominations may be sought by potential challengers each year prior to the annual session of party conference. In this case any nomination must be supported by 20 per cent of the PLP. Nominations not attaining this threshold shall be null and void.”

The question that no-one is certain of the answer to: whether the challenged leader would have to seek nominations as well or if they would be on the ballot as by right. My understanding is that the legal advice that Corbyn’s critics have is that Corbyn would not automatically have a place on the ballot. But Jolyon Maugham, a lawyer who writes regularly for the New Statesman, looked over the clause for us and believes that he would.

More important than the legal basis, though, is what the party’s ruling National Executive Committee, which would rule on whether Corbyn had to seek nominations to stand, believes.

Although Corbyn has received the backing of 12 of Labour’s affiliated general secretaries, a well-placed source tells me that they are confident the NEC would rule that Corbyn will need to seek nominations if he is to stand again.

But control over the NEC is finely balanced, and could shift decisively towards Corbyn following this year’s elections to the NEC; one reason why Corbyn’s opponents are keen to strike now.

In that situation, Corbyn’s allies believe they can secure the 50 nominations he would need – the threshold has been raised due to a rule change giving Labour members of the European Parliament the same nominating powers as their cousins in Westminster – thanks to a combination of ideological support for Corbyn and pressure from the party’s grassroots. Senior sources believe that once Corbyn reached shouting distance of 50 nominations, the bulk of the shadow cabinet would quickly fall in line. Another estimates that the “vast majority” of the PLP accept Corbyn requires more time and that the plotting is the result of “a rump” of MPs.

But Corbyn’s critics believe that the European result, which saw Labour voters reject the party line in large numbers, has left Labour MPs with large majorities in the party’s ex-industrial seats more spooked by their voters than by their activists, putting them in the same group as those MPs with small majorities. (The two groups who currently pose the biggest danger to Corbyn are MPs who are old enough to be eligible to collect their pension at or before the next election, and MPs with majorities of under 2,000.) 

Who's right? Much depends on the disposition of Labour's 20 MEPs. Prior to Britain's Brexit vote, they were believed to be the most sensitive to the concerns of the party's activists, as Labour members vote on the order of the party's list, making anti-Corbynites vulnerable. Now all 20 MEPs are out of a job at, or before, the next European election regardless, the question is whether they decide to keep Corbyn off the ballot, or try to curry favour with Corbyn's supporters in the membership prior to making a bid for seats at Westminster. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.