Andrew Bridgen is Conservative MP for North West Leicestershire.
As we enter recess and in the spirit of helpfulness, I am prepared to offer myself in the role of travel agent for the Shadow Chancellor Ed Balls where he may soak up the culture and perhaps find time to speak to some of George Osborne’s opposite numbers.
A good start perhaps would be Greece. As Mr Balls travels from Athens airport, he could soak up the sight of half-completed buildings and reflect on the 16% unemployment rate, 16%+ interest rate on 10 year Government bonds and riots in the street as banks and investors remain unconfident about the country’s outlook.
Perhaps Ireland and Portugal, where Ed Balls would meet a similar outlook with 15% and 13% unemployment rates, and double digit government bond interest rates. Perhaps he would like to visit Italy or Spain and talk about the yield on their 10-year debt, a key indicator of market confidence hovering around the 6% mark as markets become more concerned about their deficits and economies.
Perhaps Mr Balls would like to visit America, where Congress must raise the $14.3 trillion borrowing limit by August 2 so the government can meet its financial obligations.
Wherever Mr Balls goes on holiday, he can be assured that few Finance Ministers will be taking his economic advice.
Why is this? Because whilst Mr Balls plays a tactical short term game at home, those charged with dealing with financial crises recognise that the UK is taking the right action to put its house in order.
As the crisis in the Eurozone shows no sign of being resolved, George Osborne’s plan to eliminate the structural deficit continues to be vindicated. The issues in the Eurozone arise from sovereign debt and whilst the countries involved continue to prop up the flawed concept that is the Euro, there is no end in sight to the problem.
Had we not acted, pressure would be mounting on the pound and interest rates would be forced up as the markets fail to see a credible plan to pay back the debt.
However in Ed Balls-land, none of this is true. Instead, he childishly mimics that the economy is flat-lining whilst denying a structural deficit, the need for cuts and the need for tax increases.
Perhaps he should listen to Ernst and Young who say while world trade and UK exports have recovered to pre-recession levels, global financial uncertainty is holding back the business investment in the UK. Based on that observation, would a Government which has no plan for cutting the deficit be encouraging business investment in the UK?
Ed Balls' plans, or rather tactics, would have added around £20 billion to the deficit last year as he opposed the £6 billion cut in spending and the rise in VAT. He and his party are continuing to oppose the spending reductions that are on their way, the implications of which would be the loading up of yet more debt and interest payments. All of this with no plan or ideas for growth beyond keeping the taps open on government spending.
We entered the last financial crisis with the largest deficit in the developed world. As America nears default levels of debt, the Eurozone teeters on the edge of collapse, the markets would be looking very dimly on the UK in the next few months without George Osborne’s deficit reduction plan.
He can quote all he likes about cutting too deep, too fast. He has no plans for spending reductions, no plans for growth, and no plans for satisfying the markets. Such is his lack of credibility, he on one hand calls for David Cameron and George Osborne to take a lead in sorting out the Euzozone, a currency we are not part of, and then votes against renewing the UK subscription of the IMF. All he has is short term tactics and mirages.
Perhaps Mr Balls should go to Canada to see the result of a deficit reduction plan when in 1993, they turned a 9% budget deficit into a surplus within 3 years. Since then the Canadian economy has improved markedly and has become a model of fiscal stability, as the government has posted surpluses every fiscal year since 1996. He might want to reflect on what might have been if he and Gordon Brown had fixed the roof whilst the sun was shining.
There are many countries around the world that Ed Balls could visit this Summer which are now suffering because their Governments have not gone far enough, fast enough in setting out a credible plan for deficit reduction, but Britain thankfully is not one of them.