The Staggers

The New Statesman’s rolling politics blog

Ed Balls makes concessions on austerity and pay restraint

The shadow chancellor has endorsed Osborne's public sector pay freeze and said that Labour would not reverse coalition cuts.

By Helen Lewis Published 14 January 2012 11:04

Ed Balls has made a round of media appearances today, giving interviews to both the Guardian and Today programme to talk about the economy.

In a calculated push to burnish Labour's economic credibility, he made two key concessions: admitting that Labour will not fight public sector pay freezes in this parliament, and that a future Labour government would not reverse coalition cuts it inherited.

Here are the killer quotes. On pay:

It is now inevitable that public sector pay restraint will have to continue through this parliament. Labour cannot duck that reality and won't. There is no way we should be arguing for higher pay when the choice is between higher pay and bringing unemployment down.
I know there will be some people in the trade union movement and the Labour party who will think of course Labour has got to oppose that pay restraint in 2014 and 2015. That is something we cannot do, should not do and will not do.

And on the cuts:

My starting point is, I am afraid, we are going to have keep all these cuts. There is a big squeeze happening on budgets across the piece. The squeeze on defence spending, for instance, is £15bn by 2015. We are going to have to start from that being the baseline. At this stage, we can make no commitments to reverse any of that, on spending or on tax. So I am being absolutely clear about that.

Balls also backed his party leader, saying: "The more the Conservative party becomes worried about the state of the economy, the more intense their focus on Ed Miliband will become."

More from Helen Lewis

39 comments

Sun, 2012-01-15 12:17 — john henry (not verified)

Luddite - Did someone rename you Cloddite above. PERFECT!

Conservative Cave time for you. Skiddaddle!

Sat, 2012-01-14 11:22 — bparker170 (not verified)

I'm writing to my union today to withdraw from the political levy,and to urge them to withdraw funding from the Labour party,if the likes of Balls and the embrace austerity camp have won the argument in Labour;Balls is a expense cheat,a chancer and a liability.

Sun, 2012-01-15 13:14 — matthew fox (not verified)

I don't see anyone agreeing with unemployment at a 17 year high Cloddite?

With the private sector shedding jobs, and exports to countries outside europe declining Cloddite, how is Osborne's recipe for success proceeding?

Are you keen on ornithology Luddite?
I have seen a Cloddite Tit, it's not quite a blue tit, and bigger then a great tit.

From my observations, it flies around in circles, scares wildlifes, unpleasant with people and emits a rather annoying high pitched scream.

Cloddite, is your " mate " still hard Ed Balls lol

Sat, 2012-01-14 11:49 — Matt Thompson (not verified)

Oh dear, your ideology is in nosedive! Just one question bparker170, how is your spending binge meant to be funded? We are not owed a living by the rest of the world - we have to do that ourselves.

Sat, 2012-01-14 12:03 — john henry (not verified)

I think tactically that Balls has got it right. Boy Georgie and Dodgy Dave are very good at deflecting attention away from their incomepetence and failed economic programme by attacking Ed Miliband. He has to close down that Front where Labour can be attacked on their Economic policies leaving the Tories with nothing BUT to try to undermine Ed Miliband with their mates in the media including the increasingly shoddy reporting by the BBC.
Just on the BBC. I am no longer going to listen to or watch BBC News programmes because of their shocking Tory lap dog stance. I just don't trust them any more and I have found myself turning off BBC News to watch ITN and Channel 4 News, which I have not done much of in the past. I heard the Today interview with Ed Miliband and I thought Ed Miliband handled himself very well in the face of a Tory megaphone style interview by John Humphries. I'm afraid Humphries is past his sell-by date. As far as Nick Robinson is concerned; what can you say about him?

Sat, 2012-01-14 12:06 — matthew fox (not verified)

Nick Robinson, card carrying Tory, Tom Bradby, card carrying Tory, that is what you can say about them.

Sat, 2012-01-14 12:23 — Luddite (not verified)

john henry; Isn't that funny I stopped watching the BBC news because of it's left-wing biased reporting, and what the hell do you mean [incompetence and failed economic programme] Hasn't Balls just endorsed the coalition's economic programme. Or is this just another case of the political-left getting their political-knickers in a twist? Wrong on the riots, Wrong on immigration, Wrong on Europe, Wrong on welfare, Wrong on the economy.

Sat, 2012-01-14 12:37 — Luddite (not verified)

matthew fox: So what is your response to Ed Balls statement? Or his he also a card carrying Tory?

Sat, 2012-01-14 12:44 — quattro man (not verified)

Balls is a drowning man clutching at straws, who cares what he says, does or thinks. Thank goodness he will never be Chancellor....as every day passes Labour demonstrate how completely unelectable they are. It is so funny.

Sat, 2012-01-14 12:46 — Villan (not verified)

If this is the best Labour can offer, then the Tories will get in with a mandate next time. What cowards!

Sat, 2012-01-14 12:46 — john henry (not verified)

Don't you get it Luddite? Labour will INHERIT the Condem's FAILED Economic policies? They can't do anything about that in Opposition but try to show WHY and HOW it has FAILED and, as they are now doing, offer an alternative which is being increasingly asked for because of the widely perceived FAILURE of the Condem Govt. When they get into Govt. Labour will have to clean up the almighty mess and damage that the Tories have caused, as ALL Tory goverments cause to the social and economic well-being of the country.
I have lived long enough to have seen this done, particularly the damage done by the ridiculous Thatcheresque policies. (Thatcher + Grotesque = Thatcheresque)
No amount of rabid, right-wing rhetoric will be able to show otherwise.

Sat, 2012-01-14 12:51 — Fergus Pickering (not verified)

Offer an alternative? It must have been in code because I didn't get any of it. Perhaps, john henry, you could tell us what was on offer?

Sat, 2012-01-14 12:59 — matthew fox (not verified)

Your always looking response Cloddite, you can talk bullocks until the cows come home, which is handy for the bullocks.

Ed Balls has to think ahead,unlike Osborne. Unemployment is forecasted to peak at 2013 with an eyewatering 2.9 million, but with the eurozone still bubbling away, you could easily hit 3 million without batting an eyelid.

I am glad Ed Balls didn't drop the ball, and promise an export led recovery, remember that gag Cloddite?

I see your still ignoring the bad Trade figures for Nov 11 and the private sector shedding jobs, why is that Cloddite.

You don't mess around do you Cloddite, when your wrong, you stink the place out, no change there.

Sat, 2012-01-14 13:06 — Luddite (not verified)

John henry: Take a deep-breath and just step out of your politically twisted knickers. It was the political-left that failed to deliver; it was the political-left that stabbed its own people in the back. It was the political-left that sowed division and hatred, undermined communities, destroyed Britain's standing in the world and brought the country to near bankruptcy. But I suppose we can all keep blaming Maggie.

Sat, 2012-01-14 13:11 — Indu Pendent (not verified)

I'm puzzled.

Ed Balls is borrow and spend through and through. He does not believe in cuts. Or does he?
Why is he changing his mind? Is it a synical move to win votes?
How has he managed to get it so wrong in the past?
What actually is Ed Balls economic policy?
Why is he deciding to fight for something he does not believe in?
Does he think he will take over from Milibandwagon and become Labour leader?

Sat, 2012-01-14 13:18 — Luddite (not verified)

Matthew fox: Ed Balls just endorsed the coalition-cuts. The breast of state dependence is empty the nipple all shriveled. To spend wealth first you must create wealth and you can't keep spending what you no longer have, and neither can you keeping borrowing your way out of debt. Ed Balls fully understands these economic truths it's just a pity it's taken him so long to understand the basics.

Sat, 2012-01-14 13:31 — john henry (not verified)

Luddite there is a dark cave called Conservative Home where I think you and your ilk should retreat to in order to rehabilite from being out and about. There is a link on this site to it. Perhaps you should stay there for a LONG TIME in order to recover from seeing what it's like out here. The Reality is clearly too much for you. I recommend a good, Looooooooooooooooooooong rest dear. Take it easy. Next stop Conservative Home (Cave) for you!

Sat, 2012-01-14 14:07 — Marco (not verified)

So basically the whole strategy is laid bare - we'd have done exactly the same thing but pretend to be the nice guys who wouldn't dream of doing anything nasty. Labour are delusional and pathetic, completely unelectable.

Sat, 2012-01-14 14:09 — quattro man (not verified)

Well said Luddite you are spot on.

Sat, 2012-01-14 14:11 — Stuff

From the Gruniad and not mentioned above:

Additional pay restraint announced by Osborne in the autumn statement will save the Treasury an extra £600m in 2013-14 and £1.075bn in 2014-15. The chancellor said departmental budgets would be adjusted to assume an average 1% rise in both years, 1% below expected inflation. The chancellor imposed a total freeze in the previous two years.

Balls blamed Osborne's misjudgments for creating the need for additional restraint, and urged the Treasury to retain national pay review bodies.
-----------------------------------
And don't forget the City of London hyper-hypothecation bubble will burst soon!!!!

Sat, 2012-01-14 14:30 — Sue Davies (not verified)

Stuff

Spot on... there is a global banking crisis and the media are still playing the LP overspent nonsense .. and there's no money left mythology. Presumably, Balls intends this as a way of wrong-footing the Tories.. saying that the LP has to change course from his Bloomberg speech because of Osborne's economy wrecking policies.

Time will tell whether his strategy will work. For me, it is crazy for the LP to stick with neoclassical economics which clearly do not describe the real world, or tackle the problems of the shadow banking system with their re-re-hypothecation tricks. Why doesn't Balls attack Tax havens and put more focus on unpaid 'avoided'/evaded tax. After all, George Osborne's main focus is on tax... increasingly easing the ways in which wealth can be re-distributed upward .. and offshore.

Sat, 2012-01-14 15:07 — DK (not verified)

@bparker170: You're absolutely right. It's time for the unions to cut ties with Labour and start a new, properly leftwing party--one which would be capable, for a start, of reminding workers that the underpaid and exploited in the public and private sectors alike are allies, not rivals. Are public sector pensions better than private sector ones? In that case, the public sector should be walking shoulder to shoulder with their private sector comrades when the latter take to the streets. There is a quiet rolling putsch happening right now throughout Europe, pauperising the vast majority of workers in BOTH sectors, and it's time to wake up and resist it.

Sat, 2012-01-14 15:43 — David Lindsay

Told my comment is spam again, no matter how short it is. Oh, well, you will just have to read here that the case for a new party in this Parliament is rapidly becoming unanswerable - http://davidaslindsay.blogspot.com/2012/01/cut-off-balls.html

Sat, 2012-01-14 16:04 — matthew fox (not verified)

Endorsed the cuts Cloddite, super no that gag you simpleton.

If you had the brains to understand, what he had said, instead of inventing a story, Ed Balls told the nation, the country is in a bad way, unemployment is a 17 year high, the export led recovery has faulted, the makers had stopped marching and now on their hands and knees.

Osborne guaranteed to eliminate the deficit within 5 years, which was a lie in 2010, and had be honest to the country, by panning out deficits until 2016 at the earlist.

Ed Balls is thinking about the welfare bill he is going to inherit, unemployment that makes your eyes water.

Considering your determined to make a tit of yourself, who fails to keep abreast of economic data, and hasn't got a bosom buddy to think for you, your yap is what it is Cloddite.

Sat, 2012-01-14 17:12 — bparker170 (not verified)

Only Labour can be fair when there's less money around, to quote Miliband,but there's plenty of money about,it;s just distributed wrongly.Labour really have just evolved into "Tory-Lite" .

Sat, 2012-01-14 17:16 — Chris (not verified)

We actually have no opposition in this country. Most of the Labour party establishment and their careerist hangers on are far removed from the lives of people in the real world. Balls is quite brazen that he and his clique are just New Labour in a new outfit. It is quite disgusting but not surprising. I shall not be re-joining the Labour party and I know many others who feel betrayed by Ed M's 'New Generation' claptrap.

Sat, 2012-01-14 18:10 — Eddy S (not verified)

bottom line is that we are in a mess because governments of any party do not run budget surpluses when we grow at trend rate, if that was the case the war chest we would have accumulated over those many years could have been spent on high value infrastructure projects today and we still wouldn't have a budget surplus.

the only real lesson is that we use this opportunity to now to enforce some rules on our politicians so that they do not try to buy votes with spending and run a budget surplus when we grow at trend.

simple solutions and rules can take the whole world out of the mess - note this is a medium to long term thing but it's important to put in place the credible frameworks.

Sat, 2012-01-14 18:48 — Chris (not verified)

How about a society not run in the interest of corporate greed? We have a system which is basically a huge casino for a mafia style outfit. Oh I forgot, the Labour party are fully signed up to that...
Ed Balls has basically told us what we all knew, that the 'Labour' party he is part of is not a 'Labour' party at all, it is a vehicle for managerial, careerist users who could not care less for the lives of people in the real world.

Sat, 2012-01-14 19:08 — mono (not verified)

Why is it so difficult for Labour to get their message across? Instead of 'too far too fast' just keep saying "silly Tories killed the recovery, 'their terrible governing has now left us with no other choice but to accept that pay freeze is the only viable option remaining expect worse to come'

Sat, 2012-01-14 19:13 — super huey (not verified)

@john henry
So are you telling us all that Labour did a good job before they left the government. That they left the country with plenty of money in the coffers and the vast amount of cash they borrowed were spent effectively?

you're so funny, typical Labour supporter.

Sat, 2012-01-14 19:22 — JamesB1

Why is there even a distinction between Labour and Tory any more?

They're one and the same.

Most politicians from the mainstream parties are the same class of people who look after their own and always have. No idea of how to live in the real world (bar a few notable exceptions from all sides) and ultimately no idea of how to run the country.

So long as the CEOs are happy, they are happy. Sod the other 59.9 million plebs. They'll make do with a penny of the petrol every few months.

Sat, 2012-01-14 19:56 — representingthemambo (not verified)

This is an incredibly depressing development.
We've blogged on it here:

http://representingthemambo.wordpress.com/2012/01/14/youre-right-ed-ball...

Shame on you Ed.

Sat, 2012-01-14 22:27 — Dickie1

Ed is not selling out on his 'too far too fast' message, its just the reality no that with the Tory failures and the continuing Euro crisis there is no way out. Times have changed so he's changed his message.

Jobs before pay he was saying. As for anyone taking on executives, that would be great; for pity's sake will someone please do it though, instead of talking about it.

Sat, 2012-01-14 23:47 — Chris Gilliver (not verified)

Labour's lost the plot. The economy was the only area they had a coherent argument on, and they've just destroyed it. Looking at labour is like looking into the abyss.

Sun, 2012-01-15 00:00 — Awake!

so, let's get things straight.If we were to imagine that balls had stayed in power, he WOUDN't have implemented the cuts (AS HE SO CLEARLY OPPOSED THEM FOR THE LAST YEAR). Then we would lose our credit rating, our interst rates would be higher accross the curve, thus necessitating MORE borrowing, thus higher interst rates and payments... then the imbecile would have made the cuts anyway, but in the process panicked evryone and therfore pushed up our interst rates AND made the cuts. Anyone who dosen't belive he could have achieved this, well, look at his record...
hahahaha I must be a tory,
Hang on, where's blanchflower in all of this- OMG, balls has ditched blanchbabe.... he's well distanced himself from the mad professor hahahah.

Sun, 2012-01-15 01:45 — David Lindsay

representingthemambo, please email davidaslindsay@hotmail.com, since the email address on your website does not work. Very many thanks.

Sun, 2012-01-15 09:50 — john henry (not verified)

Super Huey please check your facts before engaging in deluded political posturing.

The budget deficit was 3% of GDP before the Financial crash and the bank bailouts because there was a recession with falling tax receipts. At the time Dodgy Dave AND Boy Georgie, The Tory Snake Oil Merchants, were saying that they'd MATCH Labour's spending plans so presumably they thought that this was fine or was it another Tory manufactured LIE?

The Tories have managed to turn a crisis of the market into crisis of public spending in what amounts to a distortion of the truth in truly Orwellian proportions.

It's like Napoleon and Squealer from Animal Farm rampaging across the country spreading their lies and distortions of the truth and you're like one of the poor, niave "animals" swallowing what they're saying hook, line and sinker.

Sun, 2012-01-15 11:03 — Luddite (not verified)

John henry; which chancellor transferred private debt into the public domain? Labour was pretty crap in government with a full treasure chest. What is it about economic reality you find difficult to deal with? Animal Farm!! Yes we had plenty of Labour pigs with their snouts firmly in the trough.

Matthew fox: look here 1% it’s you that needs to keep abreast your [TOP TEAM] has just agreed with Tory economic policy, and you shouldn’t believe everything you read on the internet. Besides what are you sulking about? Have you just had the tit of state dependency ripped from your undeserving gob, are you finding it hard to breathe?