Don't underestimate Ed Balls

The shadow chancellor is repeating the trick that played so well before the 1997 election.

It's seldom a good idea to underestimate your opponent, so when I'd stopped hugging myself at what Twitter was telling me Ed Balls was saying over the weekend, I reasoned he isn't a fool and so there must be method to his apparent madness. Which of course, there is.

And so picture if you will the shadow chancellor luxuriating in a large armchair and stroking a white cat as I take you through his dastardly scheme...

There has of course been some misrepresentation of the facts. Ed Ball's speech actually positions him as the irritating local, replying to a request for directions with a lopsided grin and a sarcastic "I wouldn't have started from here'. This promise to map out a course from wherever he finds himself in 2015 conveniently saves him coming up with any solutions of his own for a while and at the same time allowing him all the wriggle room he needs over coming months.

And it's a trick he's seen pulled off before. It's from the Gordon Brown school of 'how to demonstrate economic competence if you're Labour' that played so well pre the 1997 election. Accept Osborne's sums, say you'll spend the money they leave you more wisely - spending is an area the electorate believes Labour does know something about -and you win. It's worked once before...

And it needs to work again. Because for all the distinctiveness of the shadow chancellor's Keynesian approach, the country seems more inclined to support the notion of belt tightening and austerity to dig us out of the economic mess we find ourselves mired in

There are also tactical advantages to all this. It's been Balls over the last few months who's been leading the doe-eyed flirting with us Lib Dems. What better way to lay the groundwork for a future potential pact, than to accept that all that has gone before cannot be undone? It's like the shadow chancellor is gearing himself up to come over, give us a big hug and say 'what's past is past'.

Of course, some people within the Labour movement are going to be upset by all this - especially the unions when they read about accepting the need for public sector pay freezes. But the unions weren't exactly supportive of Ed Balls during the leadership campaign were they? So not much to lose there. The only one who's going to suffer in that camp is poor Ed Miliband. As some idiot pointed out on Friday, Miliband is safe enough in the leadership while he's seen as playing the game by the rules of the party - but as soon as he starts going anywhere near the centre, the gloves are off, and he's in trouble. And that opens all sorts of doors.

Of course, I hear you cry, the man wielding the knife never gets to lead - Balls wouldn't be so obvious. Except of course, in the Balls household, it's not Ed's turn to go for the leadership - and Yvette is untouched by all this. Isn't it better when you sort out these potential family disputes about whose turn it is to be leader in a mature fashion behind closed doors? If only everyone took the same approach.

So all in all, the latest front in the battle for the economic high ground opens up all sorts of interesting possibilities for the Balls camp.

He's not stupid, is he....

Richard Morris blogs at A View From Ham Common which was named Best New Blog at the 2011 Lib Dem Conference

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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Germany's political stability could be threatened by automation

The country's resistance to populism may be tested by changes to its manufacturing industry.

Germans head to the polls this Sunday 24 September. With Merkel set to win a fourth term as Chancellor, it has been dubbed a "sleepy" election – particularly compared to the Dutch and French campaigns a few months ago. Populism, while present, has not taken off to the same extent as in Germany’s neighbouring countries.

In a new Legatum Institute report co-authored with Matthew Elliott, we explore in detail why this is the case, evaluating the historical and economic circumstances as well as social, cultural and political attitudes. In short, support for both the populist Left Party (Die Linke/DL) and for the populist right Alternative for Germany (AfD) has so far been concentrated in former East Germany. At the national level, it has therefore been hard for either party to win more than around 10 per cent of the vote.

However, a longer term trend that might disrupt German politics in future election cycles is automation. With manufacturing making up a large proportion of the German economy, a significant amount of jobs are set to shift between occupational groups. According to the OECD, the portion of jobs at high risk of automation in Germany – 12 per cent – is one of the highest among countries measured.

While the elimination of some jobs and occupations does not necessarily mean net job losses – on the contrary, BCG estimates a net increase of 350,000 jobs by 2025 – it does mean upheaval, both in the job market and in the political sphere.

On the job market front, Germany has a shrinking pool of skilled labour. The Association of German Chambers of Commerce and Industry (DIHK) consider this poses the biggest risk to their businesses. The government is acutely aware of the issue – its August 2017 progress report projects 700,000 fewer skilled workers in 2030 than in 2014. Moreover, with an ageing population, the demographics are currently not in Germany’s favour.

Resolving this issue will require big and difficult political changes. On the one hand, it means that more immigration, particularly of young skilled workers, will likely be necessary. Given the backlash to Merkel’s "welcome" policy at the height of the refugee crisis, an anti-immigration sentiment was stirred which was dormant before.

On the other hand, while new jobs will be available, this does not necessarily mean that from one day to another that those working, for example, in manufacturing, will be keen to move into the service industry or another occupation altogether. Nor does it mean they will want to, or even perhaps be capable of, reskilling to carry out new digital roles.

In the UK and the US, we recently witnessed how these labour market changes were one of the big factors associated with support for the protectionist and anti-immigration rhetoric of the Leave campaign for Brexit and Donald Trump for president.

In Germany, the regions most exposed to the effects of automation are in the industrial south and west – parts of the country so far spared from the worst of populism. The potential for populist support to expand at the national level should therefore worry observers. To its credit, the current government has already been thinking about it, as evidenced in the Work 4.0 White Paper.

However, policy choices in the next few years will be crucial for mitigating the future labour market and political shockwaves of automation. If politicians choose to merkeln (do nothing) on the issue, the populist backlash might hit Germany, too.

Claudia Chwalisz is a consultant at Populus and a fellow at the Crick Centre, University of Sheffield. She is the author of The People’s Verdict: Adding Informed Citizen Voices to Public Decision-making (2017) and The Populist Signal: Why Politics and Democracy Need to Change (2015). Her guide to the German election authored with Matthew Elliott can be downloaded here