Has this speech won Balls the shadow chancellorship?

Balls thrusts himself back into the spotlight with attack on George Osborne as a “growth denier”.

In his column in this week's magazine, Irwin Stelzer argues that Ed Balls is the only Labour leadership candidate with a solid grasp of economics. Balls will be hoping that his speech at Bloomberg HQ this morning (the setting for George Osborne's attack on the "deficit deniers" last week) has proved as much.

All of the Labour leadership candidates have challenged the government's decision to cut spending this year, but Balls's speech is the most sustained and forensic attack on the coalition's economic policy we've yet seen.

In a neat riposte to Osborne, he labelled the Chancellor a "growth denier", who is ignoring warning signs of a double-dip recession. "What he is now doing is the equivalent of ripping out the foundations of the house just as the hurricane is about to hit," he said.

With figures from both left and right now saying a double-dip recession is possible, Osborne can no longer credibly claim that such talk is "Labour scaremongering". But will the "growth denier" label hurt him? That will likely depend on what the Q3 figures (due out on 26 October) look like.

For now, while polling suggests that voters are increasingly nervous of the coming cuts, most accept Osborne's argument that the need to reduce the country's £149bn deficit trumps everything else. Voters who are tightening their belt see no reason why the state should not do the same.

As for Balls, having correctly predicted that the coalition would raise VAT to 20 per cent, he will be hoping that his prescience has not deserted him on this occasion. If "the hurricane" that Balls warns of doesn't materialise, his words will be dismissed as partisan hyperbole.

But the politics of this speech may turn out to be as significant as the economics. As the Spectator's Peter Hoskin points out, the speech was a transparent pitch for the shadow chancellorship. But whether Balls turns out to be the shadow chancellor of the coalition's dreams or nightmares may depend on what those Q3 figures look like.

George Eaton is political editor of the New Statesman.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.