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14 January 2010

Edward the contender

Amid renewed speculation over Gordon Brown’s leadership, Ed Balls is portrayed by many as the villai

By Steve Richards

In politics everyone needs a pantomime villain, the baddie on the wrong side of the arguments, a bully making moves for reasons of personal ambition. At the moment, the Schools Secretary, Ed Balls, is cast in the role. From left and right, he is booed loudly for being variously an Old Labour statist, a free marketeer, a Brown loyalist, a Brown traitor, ruthlessly ambitious and wilfully unpopular. The boos were replaced by cheers when it was widely reported after the latest outbreak of restiveness in the cabinet that the Prime Minister had agreed to keep Balls at a distance. Oh, yes, he did! Oh, no, he didn’t! Oh, yes, he did!

The popular narrative, as conveyed by a significant section of the cabinet, some left-of-centre pressure groups and virtually every ­political columnist, goes along these lines. Politically, Balls has argued for a doomed core vote strategy at the next election. Economically, he has persuaded Brown recklessly to spend more on education and to put the case that Labour has different priorities from the Conservatives, outrageously seeking to establish dividing lines at the next election between Labour’s values and those of its opponents. As a minister, he
is “anti-reform” and “Old Labour”. Personally, he is acting in this way because he wants to be the next leader of the Labour Party. Brown was stupid to listen to him, and a significant consequence of the attempted coup is that the beleaguered Prime Minister will now consult more politically astute figures such as Alistair Darling, Jack Straw and Harriet Harman.

I am instinctively suspicious of orthodox narratives. And this one does not add up even on its own terms. Balls has never argued for a core vote strategy, and thinks it is possible for Labour to win the election or at least emerge as the largest party. A core vote strategy is one where the advocates seek to minimise the scale of the defeat. How revealing that a few cabinet ministers and most of the media assume anyone who supports investment in education and tax rises for higher earners must be so wildly left-wing that they are seeking to appeal to a few core voters alone.

Less hysterical analyses of the deficit crisis, support for sustained investment in education and higher rates of tax for the wealthy are commonplace across the political spectrum in most of the European Union. In Britain, however, these are seen as so eccentric there must be another explanation. The same applies to the hysteria around “class warfare”, for which Balls is also blamed. Brown made a single, quite good joke in the Commons about Tory polices being formed on the playing fields of Eton and all hell broke loose – a reaction that suggests class in Britain is as emotive as ever, remaining a legitimate issue for reforming politicians to raise.

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Balls does believe that government can be a benevolent instrument and that public spending is one way in which lives can be enhanced. This does not make him anti-reform. Balls has been involved in more reforms than most of the managerial politicians who attack him.

Active reformer

From independence for the Bank of England to revolutionising the role of the Treasury into a department concerned with spending outcomes and on to providing training for all youngsters, Balls has been an active reformer. His critics may disagree with the sweeping changes, but to condemn him for being “anti-reform” when he has been one of the most substantial reformers since 1997 is absurd.

Given the degree of hostility Balls has generated, it is hard to believe that he was acting purely because of his leadership ambitions. I am afraid his critics might have to accept that, although he does want to be the next Labour leader, he believes in what he says and does.

I remember him telling me in 1997, when Brown was sticking rigidly to Tory spending limits, that their objective over time was to rehabilitate the case for “tax and spend”. I know it is fashionable to condemn what followed, but, against the odds, Brown and Balls did it, managing to win elections and increase investment in a country where the assumption is that the level of spending makes no difference to the quality of services delivered.

Historians will recognise the rehabilitation as a substantial achievement. They will also note the wildly contradictory attacks on Balls. As he devised the economic framework that gave Brown the space to increase spending, cabinet ministers fumed for slightly different reasons. David Blunkett, a normally perceptive observer of the political situation, told me during the first term that the biggest problem for the government was that Balls was “a monetarist”. Balls was as misunderstood then as he is now when ministers, and the columnists they brief, attack him for being a reckless spender.

Finally, if Balls was acting solely for reasons of leadership ambition he would have established a more overt distance from the unpopular Brown. He has not done so, out of loyalty and also out of a belief that the two of them, and a few others, have a clearer route towards the next election than those attacking them. Similarly, whatever his epic flaws, Brown is not stupid. He turns to Balls because so often in the past his advice has been astute, whether it was on the dangers of Britain entering the euro or on the need to put up taxes to pay for the NHS.

Dynamic duo

This gets to the crux of the matter. Only Brown and Balls have given sustained thought to economic policy. This is partly because the duo would not allow anyone else to do so when they were at the Treasury. But intimidation and possessiveness have been an excuse for lazy thinking from their colleagues, who have had the luxury of popping up every now and again with a tax-and-spend policy, without having to worry about making the sums add up. To some extent, even Tony Blair fell into this trap when he was prime minister. Brown would often report after their exchanges that Blair wanted him to cut taxes and increase spending. Stephen Byers and Alan Milburn occasionally wrote articles saying taxes must be cut and then, a few months later, made speeches in favour of choice in the NHS, even though the short-term costs would have been so great that taxes would have had to rise to pay for them.

This is one of the oddities about the current “Alice in Wonderland” political situation. There is much curiosity as to why the latest attempted coup was so inept, and why dissenting cabinet minsters did not act with greater deftness. Part of the answer is staring us in the face. Brown and Balls have been at the top of British politics for more than a decade, performing the hardest act of all: matching values and expediency to economic policy. Yet they are widely perceived as useless. Some of the rebels were ministers fleetingly, and made little impact or were incompetent. Yet the dissenters are treated with great deference in the media.

Perhaps the reverse is true. The insurrectionists have always been hopeless at politics and Balls might have more to him than his army of critics would dare to contemplate.

The media hostility against Balls reflects the overwhelming dominance of the Cameronista and ultra-Blairite perspective in the serious newspapers. The clearest echo of this collective voice is the gripping columns in the Times by Rachel Sylvester. Often she reports scathing remarks made at Balls’s expense by other ministers and then comes down, out of genuine conviction, on the side of those who provide the quotations. The hostility of others is more complicated. In a recent column in the Guardian, Polly Toynbee dismissed Balls as Brown’s “creation”, but went on to argue that Labour’s best hope was its approach to tax on high earners and investment, echoing almost exactly Balls’s views. Meanwhile, John Harris, a leading figure from the left-of-centre Compass pressure group, described those views in the Guardian as “the most conservative and unpromising strand of Labour thinking”.

Uncharacteristically, Harris is following the herd. If Compass takes out Balls, it will not have many senior players with whom to dance after the election. Compass rates Ed Miliband and Douglas Alexander, the other two social democrats in the cabinet. It is being inconsistent in dismissing Balls. Some of the hostility in the cabinet is more easily explained. Anyone with close access to a leader is a target for petty jealousies and hostility, as Peter Mandelson can testify. In addition, some of Blair’s more devoted supporters will never forgive Balls for conspiring against their hero.

Alistair Darling’s wariness is both more personal and substantial. He will never get over the realisation last summer that Brown wanted to make Balls his chancellor, and is convinced Balls has briefed against him. With the strong support of Blairites in the media, he has disagreed with Balls over the need to emphasise policies that address the deficit. Darling’s sense of personal betrayal is understandable, but I am not sure that his acceptance of Treasury orthodoxy is correct, either politically or economically. If Labour enters the election making almost the same economic case as the Conservatives, and accepting Cameron and Osborne’s interpretation of the current economic situation, why should anyone vote for the incumbent? A trained economist, Balls was willing to stand up to the Treasury when he worked there. He was unpopular among some senior officials as a result, but he was able to deliver “change”, supposedly the most popular word in British politics – until the change is defined.

Quite often, the Treasury gets these pivotal economic assessments wrong. In his memoirs, Denis Healey wrote that the Treasury proved to be too pessimistic in the 1970s when he was chancellor. Healey acknowledged that ministers who argued there was no need for such drastic spending cuts were right. Like Balls now, the dissenting ministers were savaged.

Balls is partly to blame for the onslaughts against him. Pantomime villains are always culpable. He was trained by Brown to regard politics as a never-ending battle. Inevitably, therefore, he makes unnecessary enemies as he fights. He is not a relaxed media performer. A few years ago I bumped into Michael Gove, about to appear on a Budget Day TV panel with Balls. Gove nervously told me he was facing the equivalent of discussing War and Peace with Tolstoy. In the end, the Tory was much better than Balls.

Politically, Balls is too dependent for support from certain trade unions. So-called Blairites, such as David Miliband and James Purnell, are more aware of the need to move on from the stifling culture of arid labourism.

But the Schools Secretary is one of the most substantial figures in the government, and has been since 1997, even though he was not an MP then. More than any other potential leader, and more than any of his critics, he has had experience of policymaking and high politics. As an economist with strong, thought-through, left-of-centre principles, he is a key figure, both now and in the future. I do not write as a Brownite journalist or a Blairite one, and have no idea whether he will be the next leader of the Labour Party. I write the unorthodox narrative because it happens to be true.

His critics are not as clever as they think. Ed Balls has already achieved much more than his tormentors ever will.

Steve Richards is chief political commentator for the Independent and a contributing editor of the New Statesman

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