Ed Balls delivers his speech at the Labour conference in Manchester. Photograph: Getty Images.
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Balls binds Labour to austerity with promise of no extra borrowing

Shadow chancellor closes down Tory attack by ruling out option of borrowing for infrastructure projects. 

All the discussion in the press room ahead of Ed Balls's speech to Labour conference was over what surprises he would spring. Last year he memorably used his address to threaten to withdraw support from HS2. For a pre-election conference, the two announcements briefed last night - a 5 per cent cut in ministers' pay followed by a freeze, and a 1 per cent cap on child benefit increases for the first two years of a Labour government - seemed rather modest. 

But as Balls reached his Brown-esque peroration, it became clear that there was no rabbit lurking in the shadow chancellor's hat. The speech largely consisted of a series of previously announced crowd-pleasing promises - the repeal of the NHS act, no new free schools in areas with surplus places, the abolition of the bedroom tax, scrapping PCCs, and the restoration of the 50p tax rate - and a reaffirmation of Labour's commitment to fiscal discipline. 

There was, however, a significant new line on the latter. Balls announced for the first time that "in our manifesto there will be no proposals for any new spending paid for by additional borrowing." As I've previously reported, having pledged to eliminate the current account deficit, rather than the total deficit (in contrast to George Osborne), Balls had left himself with room to borrow for capital spending (such as housing, roads and other infrastructure projects).

But as a spokesman for the shadow chancellor confirmed to me after the speech, he has now ruled out this option. "We will not make proposals in the manifesto for extra capital spending paid for by borrowing," I was told. Policy commitments such as the pledge to build 200,000 houses a year by 2020 will be delivered by "prioritising housing investment within the existing capital settlement for the next parliament." Having rejected the option of extra borrowing, Labour will now need to meet all its promises through tax rises or spending cuts elsewhere. Austerity really is here to stay. 

That Balls felt it necessary to make this move is an acknowledgment of Labour's weakness in this area. With polls showing that the party is still blamed by many voters for the financial crisis, and that the Conservatives enjoy a double-digit lead on economic trust, he was not prepared to gift the Tories an attack line by promising to borrow more. "It's important to show all our pledges can be fully paid for," a spokesman told me. 

It is a decision that will dismay activists and economists on the left, who have urged Labour to pursue a Keynesian strategy of investment, but Balls will argue that it was a political necessity. Unless voters trust the party to manage the public finances, there may not be a Labour government at all. To be radical (freezing energy prices, capping rent increases, breaking up the banks, introducing a mansion tax), Labour also has to be credible. But some will question whether the right balance has been struck today. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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