The most worrying thing about the Balls-Miliband story for Labour

The key point about the email by a Miliband adviser describing Balls as "a nightmare" is that it was leaked in the first place.

Update: I've now learned how the email was really leaked.

The Tories have leapt gleefully on today's Mail on Sunday story revealing that Miliband staffer Torsten Bell, Labour's director of policy and rebuttal, referred to Ed Balls as a "nightmare" in a private email. After Balls's special adviser Alex Belardinelli wrote in a group email on the shadow chancellor's planned response to the Bank of England's upgraded growth forecasts, "Could we get this out pls? cleared at this end and essentially the same script as we had on GDP day the other week", Bell (a former special adviser to Alistair Darling during his time as Chancellor) wrote to fellow Miliband adviser Greg Beales: "As an example of why we're having problems on EB messaging-this is his current three part argument: cost of living, recovery built to last, economy works for working people. Nightmare." Beales replied: "When did built to last become a part of our thing?"

That there are tensions between Miliband and Balls has long been an open secret in Westminster. The Labour leader's team have privately accused the shadow chancellor, who was not Miliband's first choice for the job, of being insufficiently committed to his responsible capitalism agenda and too focused on defending the record of the last Labour government. There also differences between the pair over HS2 and the proposed third runway at Heathrow, with Balls openly favouring the latter over the former, the reverse of Miliband's position.

What is peculiar about the disagreement revealed by the emails is that it is so minor. Miliband himself has regularly used the phrase "built to last" (a key part of Barack Obama's 2012 campaign) and even the most dedicated Labour Kremlinologist would struggle to spot any difference between Balls's three-part argument and Miliband's. Indeed, I'm told the pair met before the publication of the recent GDP figures to discuss and agree on Labour's response, which last Wednesday's quote from Balls (on the BoE's growth forecasts) was almost identical to.

A Miliband spokesman has responded by effectively stating that Bell was wrong: "Ed Balls was entirely right. After three damaging years of flatlining, there is no recovery for millions of families. Prices are rising faster than wages, and figures this week showed that people are on average £1,600 a year worse off since David Cameron came to office."

That this apparently trivial disagreement (what Freud called "the narcissism of small differences") led Bell to refer to Balls as a "nightmare" is evidence of how great the mistrust is. The mutual suspicion will be compounded by the key point of the story: that the emails were leaked in the first place. Assuming that the leak was intentional (and not the result of a lost phone or misplaced documents), this is a red-on-red attack, delivered via a hostile newspaper. If history is not to repeat itself, both sides would be wise to ensure it is the last.

And as Balls comes under increasing attack, largely prompted by the false belief that he has been proved wrong by the return of economic growth, it's worth remembering that there is no one better qualified to perform the job of Chancellor.

Ed Miliband and Ed Balls at the Labour conference in Brighton in September. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

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