Balls vows to put “jobs and growth first”

New Shadow Chancellor Ed Balls tonight pledged to put employment and growth at the heart of Labour's alternative plan for the economy, reports Shamik Das.

New Shadow Chancellor Ed Balls tonight pledged to put employment and growth at the heart of Labour’s alternative plan for the economy. Writing on his blog, Balls says the coalition have taken a “reckless gamble” and made a “historic mistake”. He says the government have “staked the whole future of the economy on one card – the fastest, deepest deficit reduction plan in Britain’s peacetime history”, resulting in “unemployment now rising, economic growth forecast to slow, mortgage lending at a 20-year low and tax revenues falling”.

He writes:

“They inherited an economy which was beginning to recover strongly, with unemployment falling, interest rates at historic lows, and the public finances better than the Treasury’s forecasts.

“Britain had weathered the first economic storm and was on track for jobs, growth and – with tough choices on spending, tax and supporting growth – we were on a credible and sustainable path to deficit reduction.

“The Tory-led government has deliberately and needlessly taken Britain down a different path with cuts that go too far and too fast, and tax rises which directly hit family budgets. They have cut jobs programmes, withdrawn government investment from the economy, raised VAT, and cut government support to millions of families.”

Balls warns that, “as the impact of the VAT rise, deep spending cuts and rising inflation starts to hit home”, if the government’s “gamble” fails to work and growth is slow in 2011, it will be the “millions of ordinary workers, families and homeowners who will pay the price”.

He also says Labour will “apply the bank bonus tax again”, which brought in £3.5 billion in 2010 and “could be used this year to help create the jobs and growth we need”, adding:

“The lesson of history is that good economics is good politics. But when Chancellors put political ideology or expediency before economic logic, the country pays a heavy price.

“This Tory Chancellor and this Tory-led government are repeating the mistakes of the 1930s and 1980s, but they just keep ploughing on. They had a choice about which path to go down, and it is already becoming clear they have made the wrong choice.”

Yesterday on Left Foot Forward, Tony Dolphin wrote that the economic recovery “looks to have lost some momentum in the last few months”, while Howard Reed pointed out that, as well as the government’s cuts failing to maintain the pace of recovery, “those must vulnerable are being hit hardest”, explaining how:

“… across a whole range of measures, the coalition’s spending cuts fail the fairness test and give the lie to Cameron and Osborne’s claim that ‘those with the broadest shoulders are bearing the heaviest burden’.”

And on Wednesday, Nicola Smith analysed the latest labour market statistics, which said were “simply bad news”, the deterioration in the labour market becoming “a cause for real concern”:

“On the quarter, unemployment rose by 49,000, employment fell by 69,000 (the fastest fall since August 2009) and economic inactivity rose by a significant 89,000.

“The monthly unemployment data are slightly more promising (a small fall of 4,000 – although this is within the statistical margin of error) but monthly employment levels fell by 36,000 (meaning that over the last two months levels have fallen by 100,000 in total) and inactivity rose by 83,000.

“Claimant unemployment fell slightly, but at 1,456,600 levels remain high and there is no sign of a sustained or significant reduction in new claims. The claimant unemployment rate remains unchanged at 4.5 per cent.”

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today. 

28 Responses to “Balls vows to put “jobs and growth first””

  1. Deborah Dyer

    RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  2. Ma

    RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  3. UNISON East Midlands

    Balls vows to put “jobs and growth first” http://is.gd/VBXk1v

  4. Kevin Richards

    RT @leftfootfwd: Balls vows to put "jobs and growth first" http://bit.ly/gR5WDH

  5. Shamik Das

    RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas http://myloc.me/gSrJQ

  6. Kevin Richards

    leftfootfwd: Balls vows to put "jobs and growth first" http://bit.ly/gR5WDH

  7. Pete Drake

    Balls vows to put “jobs and growth first”: “Britain had weathered the first economic storm and was on track for … http://bit.ly/empqAl

  8. John Gillibrand

    RT @shamikdas: RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas http://myloc.m

  9. Job Search Pages

    Balls vows to put "jobs and growth first" | Left Foot Forward: New Shadow Chancellor Ed Balls tonight pledged to… http://bit.ly/ekrOpt

  10. Robert

    This Tory Chancellor and this Tory-led government are repeating the mistakes of the 1930s and 1980s, but they just keep ploughing on. They had a choice about which path to go down, and it is already becoming clear they have made the wrong choice.”

    And new labour did not, I wonder where we would be now if Brown had stayed in power. My guess running around asking the Tories for help, as Brown did a few times when in power. New labour are were a Thatcherite government, and will be if they ever get back in.

  11. Rocky Hamster

    RT @leftfootfwd: Balls vows to put "jobs and growth first" http://bit.ly/gR5WDH

  12. Richard

    “My guess running around asking the Tories for help, as Brown did a few times when in power.”

    What are you on tonight, mind-warping brew?

  13. David Gould

    There are 2 competing risks:

    1. Double-dip recession. Arbitrary and largely psychological but causes massive reduction in investment and spending.
    2. Bond yields/rates rocketing. China doesn’t really want to loan us money at stupidly low rates any more, the markets are still shaky and if there’s even a sniff of a debt spiral, yields will rocket meaning we have to pay a fortune in interest borrowing an extra £25bn or so a month (half the yearly education budget). This of course fuels the debt spiral, which is why it’s called a spiral.

    I don’t know why no-one talks about the second. It’s like having half a debate.

  14. M Rees

    Balls vows to put “jobs and growth first”: Balls warns that, “as the impact of the VAT rise, deep spending cuts … http://bit.ly/fSsoNc

  15. Wendy Cheuvront

    Balls vows to put “jobs and growth first” http://bit.ly/i2EOF7

  16. Trakgalvis

    RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  17. Ceehaitch

    RT @trakgalvis: RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  18. UNISON West Midlands

    RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  19. Jan Bennett

    RT @trakgalvis: RT @leftfootfwd: . @EdBallsMP vows to put "jobs and growth first": http://bit.ly/hxnyxV reports @ShamikDas

  20. Robert

    Well Dick mate see you have a lot to say

  21. Éoin Clarke

    Balls is an absolutely fantastic appointment, but Will’s artcile during the week overides much of what Balls had to say on hi sblog. Labour need policies, meat on the bone.. the £3.5bn on banks is welcome, of ocurse, but Ed B needs to go a) a little further b) be a little clearer on what it is he would do differently.

  22. william

    Lliam Byrne said,rather aptly, ‘Sorry, the money has run out’.If Balls is against more VAT,and not in favour of a reduction in planned government expenditure which will STILL rises under this administration,how does he square this with his Damascene conversion to the Darling/E. Miliband position which he opposed?Is Balls still thinking that China will finance US or UK borrowing requirements regardless of size, at current interest rates?Is Balls going to keep on telling Labour voters, and the world,that what took place on GB’s watch was solely the responsibility of external events?Does Balls think the electorate stupid, and handed us defeat by mistake?

  23. Mike Thomas

    You don’t get growth by hiking up taxes even further.

    You don’t get growth by cutting government spending slower. Incidentally Balls can’t make his mind up on whether to cut spending, increase ‘investment’ or half the deficit by 2015.

    This government are cutting spending by an equivalent of 1% per year up to 2015. Considering most people have suffered 2, 5, 10% pay cuts, why should government keep hoovering up more and more of people’s money?

    This is the economic genius that cut VAT by 2.5% and there was no discernible change in the economic picture whatsoever, what convinces him that putting it up 2.5% is going to be economic Armageddon?

    Balls is a shyster and a liar, principal architect of the mess we are in. The very fact Labour have no-one else to turn to shows they have nothing in the tank, it reads ‘E’ for Empty headed and Empty policies.

  24. matthew fox

    Looks like people on here don’t understand that taxes are increasing, and I am not just talking vat.

    700,000 extra taxpayers are going to pay the higher rate of tax, and if they have kids, will lose their child benefit, if they are the only one.

    When we are cutting spending, we are cutting police, care assistants, cooks, and teaching assistants.

    Also the private sector is losing out on contracts that are being cancelled by the state sector.

    If Conservatives want to be honest, they would tell you growth includes government spending.

    The economy powered out of recession in the first half of 2010, down to increased spending, the cut in vat and raising taxes.

    With increased unemployment on the way, which means less taxpayers and less revenue for the government, taxes will be increase again, and again, and again.

  25. Éoin Clarke

    Good post Mathew. It is certainly all intyerlinked. A lot of the growth in 2010 vcame from housing. Housebuilding in the public sector was actually at a 16 year high. It goes back to Ed Balls cooments in the Summer… a £6bn housebuilding programme would help tackle unemployment..

  26. Mr. Sensible

    William I’m afraid we’ve been there before.

    The best way to cut a deficit is economic growth.

    Other than that, the banks should be making more of a contribution.

    And Mike, when you take in to account that the government doesn’t really have a growth strategy to speek of (the Business department even seem to have accepted that)…

    And I think the VAT cut did increase footfall, and in the last few weeks I think 3 highstreet retailers have issued profit warnings.

    And Matthew I think sometimes we need reminding of that.

  27. Billy Blofeld

    Ed Balls………… so Labour intend to return to their “Politics Of Hate” – where policy is designed not with what is in the best interests of the country, but which is designed to wrong foot hated Tories.

Leave a Reply