Thursday, 20th January, 2011. I remember the day well. I was at Dorneywood, as the Chancellor of the Exchequer’s Parliamentary Private Secretary (or PPS) for the boss’s very belated Christmas lunch. The team lunch had been postponed from its proper time, due to heavy snowfall in December. David Gauke’s team had just won the Chancellor’s Christmas quiz, and everyone was settling down for some more gentle entertainment, when one of the Chancellor’s Special Advisers rushed in to announce that Alan Johnson had just resigned as Labour’s Shadow Chancellor.
This was quite a shock, as there had been no indication of such a move. There had been a little disquiet about his performance from some Labour MPs in the Autumn of 2010, but it was more shocking that he had resigned for personal reasons.
The Chancellor decided that we should all return to London at once. Whilst expressing sympathy for Johnson, it seemed like a developing situation, and it might require one or more of the Chancellor’s team to be on the media. In the car on the way to London, the news came through on the radio that Ed Balls had been appointed as Johnson’s successor. I was sat next to the Chancellor, and his first words were something like “Now Labour are getting serious”. The Chancellor liked and respected Alan Johnson, but the feeling that day was that Ed Balls had the potential to be a more formidable opponent, particularly in the Commons chamber. Gordon Brown used to taunt his Conservative opposite numbers with the number of Shadow Chancellors he had seen off, but George Osborne was already facing his third, and had only himself been in the job eight months.
Almost three weeks later, came the first Commons Chamber showdown between the two men. It was my job as PPS to ensure that all preparations were made. But the most important part, the Chancellor’s own response to Balls, was the work of the Chancellor alone. It is worth re-reading those first exchanges on 8th February 2011, as they show that, from day one, Balls was unable to escape his past and was exposed for having no credibility. After the customary polite welcome to his new role, Balls was quickly exposed as being Miliband’s “second choice” in the job, that he was “a man with a past,” that he was a “deficit denier,” “the City Minister who knighted Fred Goodwin” and that when it came to the deficit, the central question in British politics then and now, “he had no plan at all”. It was a very sharp critique, all shoehorned into 35 highly charged seconds at the dispatch box.
The problem for Balls is that three years on, the Chancellor’s critique of his opponent is the same today as it was then. Not only that: the great majority of the public shares it too. Balls is known to exasperate his own leader. He still denies that the deficit is the central problem in UK politics, and barely acknowledges it as a problem at all. He has made no apology for his past mistakes. Most importantly of all, he still has no long-term plan for the economy. The Chancellor’s dispatch box critique of Ed Balls in 2012 and 2013 was the same as it was in 2011, because Balls hasn’t used the opportunity of time in Opposition to move the debate forwards at all.
In fact, it is hard to see anything that Balls has achieved in those three years at all. Major policy announcements and changes to Labour’s approach have all been made by others, even by the likes of newcomers like Rachel Reeves. Balls seems unable to change his policies, as any change would be an implicit admission that he was wrong in the past. Last week’s announcement by Miliband to reduce the size of the banks was an awkward one for Ed Balls, who was the Treasury adviser and City Minister who presided over the over-consolidation in the first place. Balls had said in 2011 that “there is no need to break up institutions”, which might have explained his almost complete absence last week from his boss’s new policy launch.
Seemingly, Balls hasn’t felt the need to launch any Labour policy commissions or reviews. The Conservatives in Opposition 2005-2010 held many, and Labour now are reviewing policy in some areas, but none of them seem to be Ed Balls’s. To Balls, it would seem that any policy review would be an admission that the existing policy might be wrong.
Everywhere, Balls is trapped by his past. I understand that Miliband is, for example, relaxed about Gordon Brown returning to front line politics. Balls, however, has overruled him. “Balls has him under virtual house arrest,” one Labour MP, close to both Brown and Balls, told me last year.
Balls’s most prominent announcement in his three years as Shadow Chancellor was that all Labour spending commitments needed to be approved by him. Unfortunately, this has been an announcement which has been made now many times, but has been largely ignored by his front bench colleagues, and as a result, nobody in Labour has come any closer to explaining how they will pay for £27 billion of unfunded policy commitments.
Balls’s biggest problem is that his central thesis has been shown to be wrong; that public spending cuts would inevitably lead to a shrinking economy. His problem is that Plan A is working, that Plan B is now holed below the water (and being abandoned even in France), and Balls doesn’t seem interested in finding any kind of Plan C.
Balls said as recently as June, that he didn’t think Labour had overspent, and therefore Labour had nothing to learn. As recently as March, Balls said: “I’ve said consistently…unless there is a Government led plan for confidence, for growth and jobs, the economy will get worse but also the deficit won’t come down, it’ll go up”.
And Miliband has agreed with every word of it, too weak to stand up to Balls. Of course, Balls is both a symptom and a cause of Labour’s problem. Labour has no long-term economic plan, and just offers more spending, more borrowing and more taxes. It’s the same old Labour.
Yesterday, Miliband confirmed that Balls will remain in situ at least until the election. Judging by his first three years in the job, there seems little prospect of Labour developing a new economic policy in the next 16 months. Miliband leaving Balls in his position is good news for Conservatives and shows that neither is serious about doing what they need to do to try to gain economic credibility.