Balls is right to target Mervyn King

The Bank of England governor crossed a line when he called for a “plan A”.

Just a few weeks ago, Ed Balls questioned whether Mervyn King's support for the government's austerity measures was as sincere as it appeared. He told Andrew Marr: "I don't think that Mervyn King in his heart of hearts really believes that crushing the economy in this way is the right way to get the economy moving."

But in an interview in today's FT, Labour's Keynesian pitbull launches a long-overdue assault on the governor of the Bank of England. He tells the paper: "The last thing you ever want is for the Bank of England to be drawn into the political arena . . . central bank governors have to be very careful about tying themselves too closely to fiscal strategies, especially when they are extreme and are making their job on monetary policy more complicated."

Balls is right. King's declaration this week that "there has to be a plan A" (a line first used by George Osborne himself) was his most overtly political statement yet. It amounted to an explicit rejection of Labour's calls for a "plan B".

As Sunder Katwala notes, it was little surprise that David Cameron chose to quote King at length during this week's PMQs. In one of his answers to Ed Miliband, Cameron said:

Above all, what I would say to him is what the governor of the Bank of England said this morning: "There has to be a plan A . . . This country needs fiscal consolidation to deal with the biggest Budget deficit in peacetime."

There are two possible explanations for King's behaviour. Either he is a highly naive man who does not anticipate that his words will be used for political purposes, or he is a highly partisan man who believes, against all evidence to the contrary, that the coalition's premature fiscal retrenchment will increase growth. The second seems the likelier explanation, but neither is palatable and both raise the question: is this man fit to lead an independent Bank of England?

George Eaton is political editor of the New Statesman.

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Theresa May missed an easy opportunity on EU citizens' rights

If the UK had made a big, open and generous offer, the diplomatic picture would be very different.

It's been seven hours and 365 days...and nothing compares to EU, at least as far as negotiations go.

First David Davis abandoned "the row of the summer" by agreeing to the EU's preferred negotiating timetable. Has Theresa May done the same in guaranteeing the rights of EU citizens living here indefinitely?

Well, sort of. Although the PM has said that there have to be reciprocal arrangements for British citizens abroad, the difficulty is that because we don't have ID cards and most of our public services are paid for not out of an insurance system but out of general taxation, the issues around guaranteeing access to health, education, social security and residence are easier.

Our ability to enforce a "cut-off date" for new migrants from the European Union is also illusory, unless the government thinks it has the support in parliament and the logistical ability to roll out an ID card system by March 2019. (It doesn't.)

If you want to understand how badly the PM has managed Britain's Brexit negotiations, then the rights of the three million EU nationals living in Britain is the best place to start. The overwhelming support in the country at large for guaranteeing the rights of EU citizens, coupled with the deep unease among Conservative MPs about not doing so, meant that it was never a plausible bargaining chip. (That's before you remember that the bulk of the British diaspora in Europe lives in countries with small numbers of EU citizens living in the UK. You can't secure a good deal from Spain by upsetting the Polish government.) It just made three million people, their friends and their families nervous for a year and irritated our European partners, that's all.

If the United Kingdom had made a big, open and generous offer on citizens' rights a year ago, as Vote Leave recommended in the referendum, the diplomatic picture would be very different. (It would be better still if, again, as Vote Leave argued, we hadn't triggered Article 50, an exit mechanism designed to punish an emergent dictatorship that puts all the leverage on the EU27's side.)

As it happens, May's unforced errors in negotiations, the worsening economic picture and the tricky balancing act in the House of Commons means that Remainers can hope both for a softer exit and that they might yet convince voters that nothing compares to EU after all. (That a YouGov poll shows the number of people willing to accept EU rules in order to keep the economy going stretching to 58 per cent will only further embolden the soft Brexiteers.)

For Brexiteers, that means that if Brexit doesn't go well, they have a readymade scapegoat in the government. It means Remainers can credibly hope for a soft Brexit – or no Brexit at all. 

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

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