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Wannabe shadow chancellor Ed Balls forecasts economic "hurricane"

By Jonathan Isaby

Ed Balls - whose odds of becoming Labour leader are now 50-1 according to Ladbrokes - this morning gave what many (such as Peter Hoskin) are concluding was a pitch for the shadow chancellorship under whichever Miliband wins the day (Paul Goodman has already advised them against this course of action here).

Speaking at Bloomberg, he insisted that the Government's deficit reduction plan is "economically unsafe" and accompanied his forecast with vivid imagery:

"George Osborne was fond of saying - wrongly - that the Labour government had failed to fix the roof while the sun was shining. What he is now doing is the equivalent of ripping out the foundations of the house just as the hurricane is about to hit."

He certainly seems in denial about the scale of the problem he and his beloved Prime Minister left the nation. Yet he specifically tried to claim that he is not:

"The fundamental questions we face now – is it right to be cutting billions of pounds from public services and taking billions of pounds out of family budgets this financial year and next? What will that do to jobs and growth? And ultimately, what will that mean for the deficit? – are almost ignored.

"So strong and broad is this consensus that a special name has been given to those who take a different view – 'deficit-deniers' – and some in the Labour party believe our very credibility as a party depends on hitching ourselves to the consensus view. I am not one of them."

He went on to say that halving the deficit over four years (as had been proposed by Alistair Darling) was "too severe to be credible or sustainable". However, he still concluded:

"Labour does need a credible and medium-term plan to reduce the deficit and to reduce our level of national debt, but only once growth is fully secured and over a markedly longer period than George Osborne is currently planning."

"I think to do a slower and steadier pace [of cutting the deficit] going forward is actually more likely to support jobs and growth, more likely to boost financial market confidence and likely to be fairer as well."

You can read the whole speech here; meanwhile below is a video extract.