By Matthew Barrett
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Instead, Ed Balls and his economic plans are under attack from all sides. From the left, the Shadow Cabinet and Labour insiders are trying to set the Labour Party on a different economic course. Economists and business groups continue to support the government and reject Balls' alternative economic plans. The public still blames Labour for the economic crisis.
Labour blogger Dan Hodges tweeted this morning: "Just spoke to a shadow cabinet member; "Ed Ball's strategy is hurting but it isn't working"." Shortly after that tweet, he added: "The shadow cabinet's concern about Labour's economic stance is about to become a story".
Earlier this afternoon, Hodges blogged the following:
"“The shadow cabinet is now basically split into two camps: those who believe all we need is one more heave on the economy, and those who think we have to fundamentally change our position,” said an insider. The number of senior Labour MPs who fall into the second camp is now growing steadily. “It’s noticeable over the past month how many senior back benchers are saying we can’t go on like this,” said one source."
In a further sign of party unrest, Labour insiders have started a campaign to get Ed Balls to face economic reality. A new report named "In the black Labour", written by Graeme Cook, Adam Lent, Anthony Painter and Hopi Sen, and published today, criticises Labour's plans as too vague. One passage of the report says:
"Taxpayers, voters and lenders to the British state feel they have a right to know what the main opposition party would do about high levels of borrowings and when they would do it by. Satisfying this demand is fundamental to being regarded as a credible alternative government. But this is not simply a matter of electoral calculation: certainty and stability are genuinely prized economic possessions which HM Opposition should uphold as much as the Government"
One might dismiss Balls' problems with his own party as a consequence of his divisive personality. Far less easy to refute is cricism from the neutral Institute for Fiscal Studies, who this week attacked the idea that borrowing would be lower under Labour. The IFS' Director, Paul Johnson said:
"With the worse economic outlook, their slower fiscal squeeze [as set out in the March 2010 Budget] – with smaller tax rises and less deep spending cuts – would, if it had been implemented, now of course have implied even higher debt levels over this parliament than those we will in fact see. That would have left an even bigger job to do in the next parliament"
Analysis by Conservative HQ – featured in their dossier on Labour's mortgage bombshell – shows Labour's plans would mean £326billion extra borrowing by 2015-16. This could mean adding £5,000 per year to a family's mortgage if our interest rates rose to Spanish levels.
Statements released by business groups following the Autumn Statement suggest solid backing for the government's plans. These groups, include the CBI, IoD (who said "there’s no credible alternative to the deficit reduction plan"), the British Chamber of Commerce and the Federation of Small Businesses. Additionally, the OECD maintains support for the government's plan, saying in their economic outlook for Britain last month that the "ambitious fiscal consolidation has bolstered credibility and helped maintain low bond yields, leaving room for automatic stabilisers to work fully".
The public continue to be scared of Ed Balls' economic plans.
YouGov polling (pdf) conducted earlier this week showed 37% of people think the economy would be worse if Labour had won the last election. This compares to 25% who think it would be better. Given that Labour regularly poll above 35%, this means a significant element of their current supporters do not think Ed Balls would be doing a better job than the government. This point is reiterated by the fact the same poll showed only 52% of people who voted Labour in the 2010 election think Ed Balls would be a better Chancellor than George Osborne.
Finally, people still blame Labour’s debts as the key reason behind the current state of the economy. A recent ICM poll (pdf) showed that the single most important reason for the latest slowdown was "Debts which the last Labour government racked up to finance unsustainable spending". 30%, a plurality of those polled, agreed with that option.
Ed Balls' economic plans certainly seem to be hurting, but not working.