Further evidence that Ed Balls wants the economy to fail, so he can succeed

By Mark Wallace
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Further evidence of Ed Balls' miserabilist tendencies in today's Mail on Sunday:

Defence spokesman Jim Murphy threw down the gauntlet by insisting that the party had to revise its message now that the economy was clearly recovering.

He clashed with Shadow Chancellor Ed Balls by insisting Labour could no longer argue the economy was ‘flat-lining’ – a taunt made famous by Mr Balls. 

Sources say the Shadow Chancellor retorted that there was no guarantee the economic upturn would last.

That's right, the man setting Labour's economic policies sees the UK's failure as key to his own success. Stick to the same old line and hope for the worst.

No wonder he seemed overjoyed when times were bad - and he seems so frustrated now that the economy is ticking up.

Ed Balls so badly wants the Government to fail, he can't even celebrate Britain's successes

By Mark Wallace
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The other day I picked out an example of Labour's miserablism:

"Ed Balls' apparent enthusiasm when the economic data is poor, and his deflation when the figures improve"

It's a sad fact that Balls can barely contain his desire for things to go wrong in the economy so that he can promote himself on the back of a crisis.

Given the howls that suggestion generates from some quarters, I now owe a debt of gratitude to the Shadow Chancellor himself for proving the point.

Picking up the slack: Labour's economic doomsayers are proved wrong, again

By Mark Wallace
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There's always been something of the religious mantra about the Left's refusal to believe that the British private sector was capable of picking up the slack by creating jobs to replace those lost in the public sector.

Perhaps it's a lack of imagination which leaves them unable to conceive of jobs being created through mechanisms which they don't understand. Perhaps it's egotism, driving a belief that their actions in government will always be more effective than anything the private sector could do. Perhaps it's simply a desperate hope that economic suffering will help them to prosper politically.

Consider the following six quotes, from senior figures in the Labour Party, prominent commentators and Ed Miliband:

Ed Balls, Hansard, 12 October 2011:

"We were also told that public sector job cuts would be more than outweighed by the rise in private sector jobs, but I am afraid that employment is falling because the private sector has been unable to deliver the recovery we were promised. It has been a complete fantasy."

Ed Miliband's "predistribution" speech, 6 September 2012:

"I'm afraid the Government believed its own propaganda – that they could cut as far and as fast as they liked and the private sector would pick up the slack."

Alan Johnson's first speech as Shadow Chancellor, 18 October 2010:

"...in the current climate there's nothing inevitable about the private sector picking up the slack, when the public sector starts laying people off." 

 SImon Jenkins, The Guardian, 27 October 2010:

"David Cameron and business leaders claimed in unison that the private sector would "take up the slack" of some half a million workers ejected from the public sector. They cheered, but nobody could illustrate how that would happen."

Westminster Digested, The Guardian's "satirical" take on politics, 1 December 2011:

 "Cameron:...Only a moron would have imagined the private sector would suddenly pick up the slack in the worst depression since the 30s!"

David Blanchflower, in the New Statesman, 16 March 2012:

"The private sector isn't picking up the slack"

Then consider the new figures released today by the ONS, which show that:

"Private sector employment has jumped by 1.3million to a record high of 24.1million under the Coalition Government – while public sector employment has fallen by 423,000. But last year the increase in private sector jobs was almost five times the fall in public sector work."

So despite Ed Balls' fervent hopes, it turns out the private sector could and did take up the slack - and then some.

To paraphrase a great Norwegian: Karl Marx, John Maynard Keynes, Keir Hardie, Gordon Brown, Eddie Izzard, Len McCluskey...can you hear me, Polly Toynbee? Your boys took one hell of a beating.

The main economic problem for Miliband isn't content - it's credibility

By Paul Goodman
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I've written before that the instinct of Ed Miliband and Ed Balls, as the next election approaches, will be to close down the gap between Labour and the Government on spending.  If they do, they will be assailed by the unions and their left, and asked the question which John Rentoul raises this morning: what's the point of voting Labour, then?  But if they don't, they will open themselves to a 1992 "double whammy"-style assault from David Cameron (who helped to plan John Major's triumphant assault on Neil Kinnock that year). This would be spearheaded by another question, asked not so much by Labour's base as by floating voters, namely: which taxes will you raise, then?

CCHQ is gleefully pointing out the weaknesses and contradictions of the two Eds' position - over borrowing for capital spending, for example.  But my instinct is that Rentoul is right, and that the closer the election comes, the more tightly the two men will try to screw the lid down on Labour spending pledges.  (He has also noted correctly that the conventional wisdom is wrong, and that the worse shape the economy is in, the more difficult is will be for Labour to pledge to borrow more.) Balls has form in closing down Labour weaknesses over spending: after all, he was at Gordon Brown's right hand when New Labour swept the electoral board in 1997, promising as they did so to keep to Conservative spending plans.

No, the main political problem for Labour - which Grant Shapps has duly latched on to - isn't so much the content what Miliband and Balls say as their credibility.  Balls is inextricably linked to Gordon Brown's debt and deficits.  And Miliband is trying to toughen Labour's position up three years into this Parliament.  Very simply, voters form impressions of new leaders early, a lesson that Tony Blair and David Cameron both grasped from the start.  Miliband is thus moving late and slowly - as he has done on both immigration and welfare.  He cannot take a position both as a left-wing equivalent of Margaret Thatcher, challenging a centrist consensus, and at the same time establish himself as Mr Fiscal Responsibility.

Which Left-wing economist predicted that unemployment would be four or five million by now?

By Tim Montgomerie
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Q. Which stimulus-supporting economist predicted that unemployment might reach four or even five million under the Conservatives?

A. David Blanchflower, the Twittering economist who can't see a Keynesian expansionary deficit without wishing it was even larger.

Professor Blanchflower made his wildly inaccurate prediction nearly four years ago. My emphasis:

"If large numbers of public sector workers, perhaps as many as a million, are made redundant," Blanchflower said, "and there are substantial cuts in public spending in 2010, as proposed by some in the Conservative Party, five million unemployed or more is not inconceivable."

Treasury minister Sajid Javid MP reminded Professor Blachflower of his faulty crystal ball in remarks made to The Australian newspaper:

"In fact we've trimmed the public sector by 450,000 people, but far from collapsing, the private sector has created 1.25m jobs in the past three years and total employment, at 29.3m people, is at a record high."

This is not the first time that Javid and Blanchflower have clashed.

The Australian's essay by Adam Creighton - "Inside the Osborne supremacy" - is well worth a read. It gives a bird's eye view of the Coalition's economic measures and record.

CCHQ goes on the attack over energy prices – you’d pay £61 more under Labour, they warn

By Peter Hoskin
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Energy Bill today will save £158 with Conservatives or you'll pay £61 extra under Labour >>> twitter.com/grantshapps/st…

— Grant Shapps MP (@grantshapps) June 3, 2013

The Energy Bill will be debated in Parliament today, but the scrap is already underway on the streets of Westminster. CCHQ has today released a graphic – contained within Grant Shapps' tweet, above – pointing to a stark choice: an immediate £61 rise in your energy bills under Labour’s current plans versus a “potential saving” of £158 under the Conservatives’. That graphic is also pasted at the bottom of this post.

Where do the numbers come from? The £158 is from an Ofgem report which suggests that people can save up to that much by switching to the cheapest tariff deal on the market, as the Tories’ policies allow. The other figure is based on Ed Miliband’s opposition to solar subsidy reforms which have, apparently, already saved an average £61 for each household.

Balls's winter fuel gambit: Strategically flawed, tactically risky - and, in policy terms, absolutely right

By Paul Goodman
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Ed Balls was trained by Gordon Brown in the rhetoric of "investment versus cuts" - in other words, issuing spending pledges to be paid for by borrowed money, which the evil Tories would then be challenged to meet.  David Cameron's election campaign outburst about "smears" and "lies" - in response to Labour leaflets that the Conservatives would scrap such universal payments as Brown's Winter Fuel Allowance - was evidence of how much pressure the tactic was capable of generating.  The gambit was also a useful reminder to the lobby and interest groups which support universalism of Labour's support for the principle.

The Shadow Chancellor's announcement this morning that Labour would not pay the allowance to pensioners aged over 75 if their income is higher than £32,000 a year is therefore strategically puzzling - since it lets Cameron off the hook over means-testing the payment (and going on to extend the principle to free bus passes and TV licences).  All three main parties now look to enter the next election with broadly the same policy on the allowance.  Balls will also be pressed now on whether Labour would definitely implement the plan in 2015 - and, if so, why he won't promise to implement other Labour plans then, such as its proposed VAT cut (and extend the means-testing principle, too).

Europe, public spending, union power grabs...Labour have plenty of splits of their own

By Mark Wallace
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The media is intent on a "Tory splits" narrative. Given the obsessive focus on any hint of disagreement on the blue side of the House, it is surprising that there has been so little reporting of Labour's splits.

They do have them - three in the last four days, in fact. Here they are:

The EU

Yesterday, various figures from the left and right of the Labour Party launched Labour for a Referendum - only days after Ed Miliband publicly rejected the idea of giving the people a say on Britain's EU membership. The rebels aren't just eurosceptic "usual suspects" like Kate Hoey, they include Brussels fans like former Europe Minister Keith Vaz.

Ed Miliband’s fiscal flap is as nothing compared to Ed Balls’s fiscal falsehoods

By Peter Hoskin
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Thanks to the assiduity of Martha Kearney, Ed Miliband and his deficit enlargement plan are in the news. Would he borrow more to fund his proposed VAT cut? Um, ah, well, he wouldn’t admit it on Radio 4’s The World at One yesterday. But he did on ITV’s Daybreak this morning. “A temporary cut in VAT, as we are proposing,” he deadpanned, “would lead to a temporary rise in borrowing.” Now all he needs to do is admit that Labour’s overall fiscal plans would probably mean a rise in borrowing, too.

But forget Mr Miliband for a moment. In the past week, the most significant fiscal claim from a Labour figure has come from Ed Balls – although it has been reported far less extensively. It was issued during his response to last week’s growth figures, and not just once but again and again. First, speaking to the Beeb:

“The government inherited an economy which was recovering, started to grow strongly. Unemployment was falling, the deficit was coming down.”

And in the same interview:

“In 2010, they inherited an economy which was growing more strongly, unemployment was falling and the deficit was coming down.”

And then on the Daily Politics:

“[The deficit] is down by a third because what happened in the first year of this Government inherited from Labour when the economy was growing, unemployment was falling and the deficit was going down.”

A-wha?! The Coalition inherited a declining deficit? This claim requires more than a sceptical, raised eyebrow. It requires some charts.

Poster wars, battle of the growth and borrowing figures

By Peter Hoskin
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Unsurprisingly, Labour aren’t letting the absence of a triple-dip hold them back. They’ve released an online poster highlighting the sad truth that this is the slowest economic recovery in 100 years.

But CCHQ aren’t holding back either. They’ve done their own insta-version of the Labour poster, using that ol’ favourite from the Institute for Fiscal Studies: that Ed Miliband’s Labour (had they followed Alastair Darling’s budgetary plans) would have borrowed £200 billion more over the course of this Parliament. We’ve pasted the poster below.

A bit of web-based rough and tumble? Certainly. But it’s indicative of current weaknesses for each party: the Tories, growth; and Labour, the public finances. Ed Miliband’s party may have thought that their howlongwillittakegeorgeosbornetobalancethebooksatthisrate.com website, in response to Tuesday’s borrowing figures, was very clever. But it just prompted another question: how long would it take Ed Balls?

Anyway, here’s the poster: