“I urge Lib Dems to bite their lip and back us”

Ed Balls, Gordon Brown’s closest ally, talks to Mehdi Hasan about Labour values, being hated and whe

"I'm caricatured as a tribalist. That's garbage." Ed Balls, the Secretary of State for Children, Schools and Families, is in a combative mood. Talking to me at the local Labour Party headquarters of Morley and Outwood, his redrawn constituency in Yorkshire, he refuses to define himself as a pluralist or a tribalist. "It's not that I'm tribal," he tells me. "It's just that I'm not a Tory. I'm Labour. I believe in Labour values."

Balls is defending a notional majority of just under 10,000, but has been the target of a well-funded Tory "decapitation strategy" said to be aimed at producing a "Portillo moment" for Labour on 6 May. Every other street corner in the constituency is plastered with posters of David Cameron. But Balls is bullish. "There isn't going to be a Portillo moment," he says. "In 1997, Michael Portillo had no idea what would happen to him until it happened. We've known for more than a year that the Tories would be targeting us. We've been prepared."

Is he as optimistic about Labour's prospects at the national level? "It will be very tough for us to get a majority," he concedes. "But it will be very tough for the Tories to get a majority. Who turns out to be the largest party [in a hung parliament] remains to be seen."

I travel to Yorkshire on the day the Guardian has endorsed the Liberal Democrats and the Times the Conservatives. Are the media united against a Labour victory? "The BBC has fought valiantly to be fair and balanced, but Sky News and most of the newspapers are deeply partisan." He criticises the Murdoch-owned broadcaster and the right-wing press again later in the interview. "This election is much more open than the newspapers and Sky News suggest. The polls are very tight."

There remains a question mark over whether Labour has done enough to win over the Liberal Democrats in the event of a hung parliament. Balls may reject the tribal tag, but he has been one of the cabinet's long-standing opponents of electoral reform and, in particular, proportional representation - the "non-negotiable" price for Nick Clegg's support. Pluralists in the cabinet - Alan Johnson, John Denham, Ben Bradshaw - wanted the manifesto to go beyond a commitment to a referendum on the Alternative Vote and offer proportional representation.

Balls argues that "PR leads to a politics of behind-closed-doors deals after elections. It makes it harder to make long-term decisions and it gives more power to small parties . . . and I don't believe as a matter of principle that coalition governments are better. That doesn't make me hostile to the Lib Dems or unable to work with them. On education, I could work with the Lib Dems very easily. On most things, we agree . . . but I also recognise that the Lib Dem coalition with the Conservatives in Leeds, for example, has done a terrible job."

So, does Balls stand by his comment that coalitions are "not the British way of doing government"? He shrugs. "They aren't." And then, in an apparent dig at cabinet colleagues such as Johnson who have reached out to the Lib Dems, he adds: "Some people have said that it would be the fulfilment of New Labour to enter a coalition with the Liberals . . . actually the whole point of New Labour was to show we could govern for the whole country, in a one-nation way, as the Labour Party.

“In all this talk of pluralism," he says, expanding on the point, "there are some people who say it would be better to have deals with other parties. I disagree." So if, as some polls suggest, the nation awakes to a hung parliament on 7 May, would he be opposed to doing a deal and sitting around the cabinet table with Nick Clegg and other Lib Dems? "Of course not," he says, without hesitation. "You deal with the election result as it comes."

For Balls, defeating the Tories is the top priority. Given this, what is his advice to Lib Dem supporters in the 100 or so Tory-Labour marginals? "I urge Lib Dem voters to bite their lip and back us." But what about Labour supporters in Tory-Lib Dem marginals? "I always want the Labour candidate to win, but I recognise there's an issue in places like North Norfolk, where my family live, where Norman Lamb [the Lib Dem candidate and sitting MP] is fighting the Tories, who are in second place. And I want to keep the Tories out."

This coded response on the question of tac­tical voting suggests that the Children's Secretary may not be the dyed-in-the-wool Labour tribalist many assume him to be. He has often been described as the arch-Brownite, the nemesis of the Blairites. Ever loyal to the PM, Balls says, "You can't separate Brown or Blair since 1997. They've been such a partnership." So was he a Blairite as well as a Brownite? "Of course," he replies, laughing. "I was always New Labour . . . The idea that I would ever allow anyone to say I was Old Labour . . . it's nonsense."

State of play

It is often forgotten that Balls helped mastermind some of Labour's most innovative policies, such as independence for the Bank of England within days of taking office in 1997, something that he had publicly advocated since 1992. "New Labour was defined by its economic policy in its first term and I was at the centre of that," he says proudly.

These days he is castigated by his critics on the right of the party, and in the Tory-supporting press, for being an old-fashioned "statist" - a blind supporter of "big government". Does he consider the growth of the state under Labour to be a positive achievement? "Of course," he insists, pointing to the increases in numbers of state-funded teachers, doctors, nurses and police officers. The issue, he says, is that "the state isn't an end in itself. It's what liberates the potential of individuals. A state that is corrupt, kleptocratic and not transparent, and denies individuals choice or opportunity, is a bad state. A state that is open and transparent, and gives people opportunities where they didn't exist before, is a libertarian and egalitarian state, which is what I've always believed in."

Many on the left accuse New Labour of making a Faustian pact with the City, in which the state deferred too much to the financial markets, with catastrophic consequences. Refreshingly, Balls agrees. "The legitimate criticism is that there was too little state regulation of the financial services industry and I hold my hands up for my role in that when I was financial services minister." Does he regret New Labour's settlement with neoliberalism in the 1990s? "I was never a believer in a neoliberal settlement," he says. "I always thought that a dynamic, job-creating economy needed to be a market-based economy - but the state's role was essential in making sure that markets worked in a fair and flexible way. A stronger state was necessary so that the market worked in the public interest."

Balls recognises that some of his colleagues have not always shared his view, though he believes that events have vindicated it. "In 2002 and 2003, there were hostile briefings against me for saying there were limits to the role markets could play in the delivery of public services. The attacks were over limits to markets and tax credits, and I was accused of betraying New Lab­our. Nobody now doubts the limits to markets, while tax credits are all over our posters."

Balls then tells me he is fed up with "off-the-record briefings from people trying to pigeon-hole me for their own ends". But hasn't he been behind most of the briefings against cabinet ministers in the press? Isn't he Brown's fabled enforcer? Balls flatly rejects the charge. "If you were to do a Google search for how many times the papers say 'aides of' or 'friends of' Ed Balls, it would be none . . . It's a politics I've never been involved in before." He adds: "If you asked lobby journalists if my reputation is for anonymous briefings, they would say absolutely not."
He also denies claims that he has been behind recent briefings against Douglas Alexander, the party's election campaign co-ordinator, and Ed Miliband, the author of the party's manifesto, who is a potential rival for the Labour leadership. What about his friends Charlie Whelan, political director of the powerful Unite union, and Damian McBride, the former No 10 spin doctor who resigned in disgrace after a smear scandal last year? This time Balls's denial is carefully constructed: "Damian McBride and Charlie Whelan never ever spoke to journalists on my instructions. They both worked for the Treasury or No 10 - not for me."

Balls says it is he who has been the victim of off-the-record briefings. "I can't think of any columnist who has attacked me more in the past year than Rachel Sylvester [the Times columnist], always on the basis of anonymous briefings." He is scathing about his critics within Labour: "It is cowardly and pathetic for people who you might think would have more confidence and integrity to tell right-of-centre columnists things they wouldn't be able to say in public. It's a disgraceful way to behave."

Euro vision

Balls puts his unpopularity down to his loyalty to Brown over the years. He draws an analogy with the attacks Peter Mandelson endured in the late 1990s on behalf of Blair. I remind Balls that the Brown camp, which he headed, had encouraged the attacks on Mandelson. Rejecting this, he says, "If I've had differences [with colleagues], they've been over policy. Peter Mandelson and I get on these days, but we had a difficult time agreeing over the euro. That's a policy difference, that's legitimate."

Mandelson is not the only Labour "big beast" with whom Balls is alleged to have clashed. In February 2009, the NS reported rumours that Balls was trying to "trigger" a reshuffle in which he would become chancellor and inject "radicalism" into the "conservative" Treasury. Did he lobby for Alistair Darling's job? "At no point have I ever coveted or wanted or told anybody that I wanted his job," Balls tells me. "To be honest, Children's Secretary is a great job. And being chancellor to a prime minister for whom I worked in the Treasury for so many years would have been very, very difficult." So Brown did not ask Darling to stand aside in the wake of the European elections, as my colleague James Macintyre and I reported in June 2009? Again, Balls's answer is carefully phrased: "What I said was that at no point did I, ever, ask Gordon for that job."

Does he have his eye on the top job? Having amassed the support of influential trade unions such as Unite, Balls is widely considered to be the only obstacle to David Miliband becoming Labour leader if the party collapses into third place on 6 May. "If I said I didn't want it, you wouldn't believe me," he says, "but it's not what drives me. If the last job I did was this one, that'd be fine."

Instead, he focuses on the challenges ahead for Labour. As a younger member of the New Labour project, he admits his experience has "been shaped by government, not opposition". Having been accused in the past of putting his personal ambitions ahead of party unity, he goes out of his way to say that Labour's number one priority should be to remain united.

“You don't want to cede government to the Conservatives. Having seen how long the scars of disunity lasted . . . I have an aversion to factionalism. There will be many pressures externally to look for divisions within and I will not be part of that."