No turning back: Balls stays firm on cuts, pay, and the deficit

Ed Balls defended Labour’s new direction last night, insisting he would not make promises he couldn’t keep and could be trusted to make the big decisions.


Ed Balls defended Labour’s new direction on the deficit last night, saying he would not make promises he couldn’t keep, stressing the need for pay restraint and insisting Labour could be trusted to make the big decisions.

The shadow chancellor reiterated the line from his Fabian speech on Saturday and Ed Miliband’s comments in a series of interviews yesterday, and also attacked George Osborne’s failure to deal with the deficit and the lack of jobs and growth.

Watch the interview in full:

Balls said:

“We can’t now make commitments on spending, on tax rises, to reverse what the Conservatives are doing, but nor can we say with any credibility, in the next two years, we think that higher pay for public sector workers should come before jobs, we can’t make that argument… I’m afraid there is now no choice, if we’re gonna keep unemployment down in the future, that jobs should come over pay…

“Labour cannot from opposition change that till we’re in government, and to be in government we’ve got to set out an alternative, but it’s got to be a credible alternative… what we’ve got to do is say there is a better way, a fairer way, to get the deficit down, to get the economy moving, to get growth and jobs back, our five-point plan for jobs and growth, tough decisions on pay, but also doing it in a fair way…

“We can’t make our policy on the basis of now, we’ve got to make our policy on what will be the best way forward for the country, and what could show Labour, in a credible way, can make the difficult decisions when we will be faced with clearing up a very difficult Tory economic mess, which we see all around Britain at the moment…

“I am saying today, as I said a year ago and two years ago, the deficit must come down, there have to be hard choices on tax and spend, but if you go too far and too fast, as I warned consistently over the last year-and-a-half, the danger was it wouldn’t work, the economy would flatline, unemployment would go up, and in the autumn statement George Osborne had to admit, not only all that, that he’s borrowing £158bn more.

“The problem I’ve got is that I can’t wave a magic wand, and sort of just blow away that inheritance, our task as Labour will be to clear up George Osborne’s economic mess…”

He was then asked:

“You’re adopting the view that there is no alternative to these cuts?


“That is 100 per cent, emphatically, wrong. I think George Osborne should change course now, his cuts are too far and too fast, he’s crushing growth. The reason our interest rates are so low is cos he’s getting it wrong. Unemployment is going up. He should have now as we’ve advocated, a temporary cut in VAT, increased public investment, repeat the bank bonus tax…

“Len McCluskey is plain wrong. I argued for action now to boost growth and jobs, and I argued for long term reform to make our economy stronger and fairer…

“What I can’t do is make a commitment now that I will know how much money we have, when there will be less money in three years’ time…

“George Osborne is doggedly sticking with a plan that is failing, he should have changed course six months ago, he still can today, he still can in the run-up to the budget and I will say to him, day-by-day, week-by-week, the approach he is taking, too far and too fast, is unfair and is not working. The longer he persists, the bigger the pain, the bigger the damage and the greater the damage in inheritance we will face because of his mistakes…

“The VAT rise last year to 20 per cent was an unfair tax rise which choked off the recovery and has flatlined the recovery, will probably lead to, has led to more borrowing in the economy. It was the wrong thing to do, they shouldn’t have done it, we’re calling for a temporary VAT cut now, but can I say to you today and to your viewers, “I promise as shadow chancellor, in three years’ time, we can definitely reverse that”?

“I will not make uncosted commitments I can’t afford until I know the state of the economy…

“As the shadow chancellor, I’ve got to know that our manifesto is being properly costed in the context of the times and can be paid for…

“I think what they’re doing on disability allowance is a big mistake and it’s unfair, the benefits cap will lead to more homelessness the way it’s been designed, I think the abolition of the Future Jobs Fund will make youth unemployment higher, the taking tax credits away from families on £25,000, hitting women harder, is unfair, wrong and damaging, but the question you’re asking me is can I, to your viewers, make promises now, about three years’ time.

“Nick Clegg made promises, remember that promises not to raise VAT, he broke his promises straight after the election. I’m not going to make that mistake cos that is wrong, and not the right way to do politics, I won’t make that mistake.”

Meanwhile, in today’s Guardian, Balls’s predecessor Alan Johnson hits back against the trade union leaders who have criticised the new direction, saying the union movement is at risk of plunging back to the “fantasy utopias” of the 1970s, and calling the likes of Unite general secretary Len McCluskey and GMB boss Paul Kenny the “delusional left”.

He writes:

“McCluskey’s article in the Guardian reminded me of the ‘culture of betrayal’ that I thought the movement had escaped. According to Len, by trying to position Labour as a credible alternative to the coalition, Ed Miliband has set it on a path to ‘destruction’.

“Stuck in a familiar groove, Len goes on to suggest that all the ills that he claims are befalling Labour are because of actions of so called ‘Blairites’ – those terrible people who introduced the minimum wage and increased the number, the stature and indeed the pay of public sector workers across the country.”


“Ed has stated a simple fact; that a Labour government will not be able to reverse as many of the cuts the current government is making unless it can show where the money is to come from.

“The difference between Len’s position and Ed’s is that Len believes a political party can win an election on a platform of promising no cuts, no job losses and continued levels of public expenditure. That is the policy of the delusional left who will never again win the public’s trust.”

“The trade union movement lost its way in the late 1970s when it opposed the minimum wage and supported the closed shop. It needs to recognise that Ed Miliband’s vision of a better future requires a change of mindset throughout the party if we’re to spend one term in opposition rather than a decade.”

Miliband is expected to face further scrutiny of his position today from David Cameron and his Tory backbenchers at Prime Minister’s Questions.

See also:

Memo to Osborne: Jobs and growth will cut the deficit. Please listenCormac Hollingsworth, January 17th 2012

Balls throws down the gauntlet: “We are going to have to keep all these cuts”Shamik Das, January 14th 2012

Economic update, December 2011 – UK teeters on brink of recessionTony Dolphin, December 5th 2011

Commons to vote today on Labour’s five-point plan for jobsShamik Das, October 12th 2011

Vindicated Balls gives absent Osborne an economics lessonShamik Das, September 15th 2011

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