Miliband moves to close down Balls speculation

The Labour leader has enough tricky policy questions coming his way. He doesn't want to be quizzed about personnel too.

Ed Miliband, on the Andrew Marr programme today, when asked about speculation that his brother David might be brought back to Labour’s front line to serve as shadow chancellor, said “there is no vacancy” – which, of course, there isn’t. That is a stock formula for equivocation disguised as certainty. It sounds like a definitive backing of the incumbent without closing down any longer term options. There is no vacancy now. That doesn’t mean there won’t ever be one. But Miliband also said that Ed Balls would "absolutely" be Shadow Chancellor going into the election campaign – a level of support that has hitherto been lacking.

The will-he-won’t-he sack Balls debate is a Westminster parlour game that falls in and out of fashion every few months. There has been a particularly intense bout of speculation recently (about which I blogged more extensively here). Miliband’s dilemma is that he wants to keep options open in case it becomes apparent that Labour’s lack of an effective economic message – or, rather, lack of a popular message-giver – is in danger of costing the election, but if he allows speculation to rumble on it overshadows the rest of his political project. Soap opera and pop psychology easily squeeze policy development and nuanced positioning out of the news. That is especially true when policy development is slow and positioning is cautious.

Miliband will have been particularly keen to kill off the Balls-related speculation as he is about to undertake a risky political manoeuvre that is not universally supported in the shadow cabinet and the party. He confirmed today that he has no intention of matching David Cameron’s pledge to hold a referendum on Britain’s European Union membership – a gambit the Prime Minister is universally expected to make in a speech on 22nd January. As I reported in my column last week, Miliband intends to take what he and his allies see as the statesmanlike moral high ground, attacking Cameron for gambling with Britain’s vital alliances and destabilising the economy in the process purely to salvage his position in a frustrated and rebellious Tory party.

But there are those in the Labour party who worry that Miliband will not be able to sustain that position through an election campaign. He will constantly be asked why the Tories feel confident asking the people for their view on Europe while Labour appears to be running scared. Even those in the shadow cabinet who support Miliband’s current position recognise that the going will be tough. (Much depends on whether the Liberal Democrats acquiesce to the referendum pledge or back the Miliband line – Nick Clegg has the power to leave one of the Labour or Tory leaders looking painfully isolated on an issue of  national significance, a rare bit of leverage the Lib Dem leader will no doubt be keen to prolong and exploit.)

Either way, Miliband does not want to spend the next few weeks, when he will have to answer plenty of difficult questions about his holding-pattern policies on everything from welfare to the economy to Europe, also answering questions about whether his shadow chancellor is a temporary feature or a permanent fixture.

Ed Miliband and Ed Balls. Source: Getty

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty Images
Show Hide image

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.