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Balls’s demise has been exaggerated

On a Labour front bench that’s hardly groaning with heavyweight talent, the shadow chancellor is as close as anyone to being indispensable.

Let’s not throw Ed Balls out with the bathwater. Yes, Labour’s shadow chancellor had a bad week. A poor response to the autumn statement was further undermined by a misguided attempt to blame the whole thing on his stutter, and an even more misguided attempt to brand the Tories as callous for revelling in his discomfort.

It wasn’t just the Tory party relishing the shadow chancellor’s misfortune. A Labour frontbencher told the Mail on Sunday: “The Balls brand was built on an aura of invincibility. But against George Osborne last week, he was as nimble as an arthritic elephant. He’s been holed below the waterline by one speech.”

No, he hasn’t. Ed Balls had a bad day at the office. OK, he poured coffee into his hard drive, smashed the photocopier and called his manager a moron. But his position is still secure.

Gross exaggeration

There are a number of reasons why Balls’s demise has been exaggerated. The first is that it would make sense for Ed Miliband to eject his shadow chancellor only if he wanted to signal a change in his stance on the economy. There’s more chance of Miliband turning up at PMQs in
a chicken costume than unveiling his own economic plan B.

Last year, I wrote that the Balls “Too far, too fast” mantra was helping the Tories: “The deficit is the defining issue in British politics. And Tory attempts to brand Labour as deficit deniers have succeeded beyond their wildest dreams.”

And so it’s proved. But deficit denial is now Labour’s strategy for 2015. By pointing to the callousness of the Tory cuts, contrasting them with the iniquitous axing of the 50p income-tax rate, and praying Osbornomics leads us into a triple- or quadruple-dip recession, Miliband is gambling on turning us into a nation of deficit deniers. And frankly, there is no one in the shadow cabinet with a better chance of pulling off that strategy than its architect.

Another reason why Miliband isn’t going to be dumping Balls is that he doesn’t trust him. He has no intention of letting him roam free on the back benches causing mischief, nor have him rattling around a second-tier brief with time – and a leader – to kill.

Tory big guns

But there is an even more compelling incentive for Miliband to retain the services of his temporarily misfiring shadow chancellor. The Tories – conscious that they have underestimated the threat posed by Miliband and his “new politics” – are bringing up the big guns. A ferocious barrage is about to be launched and Miliband will need every seasoned political veteran he can find.

There are few in Labour’s ranks who bear, or have administered, more battle scars than Balls. On a Labour front bench that’s hardly groaning with heavyweight talent, he is as close as anyone seems to being indispensable. Which doesn’t mean he has no lessons to learn.

The Balls-the-Bruiser routine has run its course. He needs to cut out the taunting and the flatlining hand gestures at PMQs and start acting like the next chancellor, not the next Nadine Dorries. If he is going to stick to his Keynesian economic model, it needs to be internally consistent; Labour can’t simultaneously advocate a freeze in public-sector pay but an inflation-busting rise in benefits, for example. And he’s got to shut up about that stutter.

Despite hostility towards the coalition, the electorate is not convinced by Labour’s strategy of deficit denial and many still believe the party is culpable for losing control of the nation’s finances while in power. But if anyone can help lead Labour to victory against all the odds, it is Ed Balls, with or without a stutter.

An earlier version of this article wrongly attributed a quote to John Mann MP. This has now been updated and we apologise to Mr Mann.

This article first appeared in the 17 December 2012 issue of the New Statesman, Will Europe ever go to war again?

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.