Balls would "retire to the back benches" if Miliband tried to move him

Allies of the shadow chancellor tell Kevin Maguire that he won't accept another job in the shadow cabinet.

Commentators have recently taken to suggesting that Ed Balls could be replaced as shadow chancellor before the next election, with David Miliband and Alistair Darling touted as possible replacements. The latest round of speculation began after Balls revealed that Miliband hadn't guaranteed his position. He told the Times (£): "I’ve never asked him. It’s a bit arrogant thinking about what sort of job you do."

In tomorrow's issue of the NS, Kevin Maguire offers a spirited defence of the shadow chancellor and reveals that Balls would "retire to the back benches rather than swallow demotion to another portfolio". He also reports that Miliband would "face a revolt by MPs if he offered the post a third time to his big brother, David". Here's the story in full.

The political “advice” to Ed Miliband to reshuffle the bruiser Ed Balls out of the shadow chancellorship is naked special pleading by the Tory camp and Labour’s Blairite rump. Balls repeatedly hurts the Conservatives. He predicted that austerity would create a double-dip recession and is smart at opposition guerrilla tactics, proposing that money saved on the Olympics should be siphoned off to cancel a petrol-tax rise. His biggest rave reviews are from David Cameron, who has abused Balls as a “muttering idiot” and “the most annoying person in modern politics”: backhanded compliments from Flashman.

Both Eds insist that there’s no deal to keep Balls in the Treasury brief, yet Miliband would face a revolt by MPs if he offered the post a third time to his big brother, David. Allies of the shadow chancellor whisper that he’d take his bat and balls away and retire to the back benches rather than swallow demotion to another portfolio.

Shadow chancellor Ed Balls speaks at the Labour conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.