Coffee House

What Ed Balls told the bankers

22 June 2014

11:15 AM

22 June 2014

11:15 AM

Ed Balls knows how to talk to bankers. Having been Gordon Brown’s right hand man and City Minister under the last government, he is well known in the Square Mile—and far more popular than you might think.

Earlier this month, Balls was to be found having lunch at HSBC’s private bank in St James. He was there to address the chairmen of the UK banks. Those present left this private lunch with the distinct impression that Balls was presenting himself as a restraining influence on Ed Miliband, and someone who could protect them from some of the Labour leader’s more radical policies.

Balls made clear to the group that he was a ‘sceptic’ of regional banking. He also assured them that having helped introduce an independent Competition Commission, he didn’t want to see government telling the Competition and Markets Authority what to do.

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This assurance was particularly important to these bankers. They are very worried about Miliband’s plan to order the Competition and Markets Authority to report on how to carve two new challenger banks out of the existing banking market.

As I say in the Mail on Sunday, those close to Balls deny that there is a split with Ed Miliband. They stress that Balls is in favour of these two new challenger banks and the regional branches of the British Investment Bank that Labour is proposing.

But the private lunch did reveal a crucial difference between Balls and Miliband. Balls want to respect the independence of the Competition and Markets Authority while Miliband wants to instruct it on what to do.

This difference speaks to a wider split between the two men. Balls is a pragmatist, he wants to deal with the economy as it is. But Miliband wants to remake British capitalism.

Balls is known to have concerns about this agenda, to think that it is too abstract and too difficult to implement. He is also one of the shadow Cabinet members most concerned about Labour’s lack of support among business.

Over the next few months, Miliband will detail his vision for a new model for the British economy. But the challenge for Miliband is how can he persuade voters he can deliver it, if his own shadow Chancellor hasn’t fully signed up to it?

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  • you_kid

    When did we stop recording growth in M4 money supply?
    Q: Why did we do that?
    A: Because we INFLATED money M4 beyond recognition which was really good fun!

    When did we stop recording CPI/RPI inflation?
    Q: Why did we do that?
    A: Because we INFLATED house and land values which was really good fun!

    What next? Any guesses?

  • Mynydd

    As I read it Mr Forsyth did not have a seat lunch table.

    • Wessex Man

      I would have imagined that it would upset them for the same reason as me, that he was part of the problem along with his ex boss responsible for the near bankrupting of this country. Save the world couldn’t save five bob!

    • Inverted Meniscus

      So tell us all who set up the tripartite banking regulatory system which precipitated the first UK banking failures for nearly 150 years? I will give you a clue, he was an advisor to that incompetent oaf Gordon Brown who bequeathed a £168 billion structural deficit and destroyed private pension provision. Now see if you can conjure up some lies to suggest that it was actually Mrs Thatcher.

      • Joe Hawkins

        God help us if we’d had the Tories in charge in 2008.

        • Inverted Meniscus

          Well we might have had effective banking regulations and some accrued surpluses instead of a £168 billion structural deficit.

          • Mynydd

            As I have said John Redwood wanted to reduce banking regulations.
            Mr Cameron/Osborne policy in 2010 was to clear the deficit by 2015, they will fail, the years deficit is projected to be just under £100 billion.

            • Inverted Meniscus

              What Redwood wanted is irrelevant. It is what Labour did that matters and their regime produced the first banking failures in 150 years. I know you are dishonest but blaming the Tories for something Labour did is pathetic and witless

      • Mynydd

        So why was it Conservative party’s policy as laid down by Mr John Redwoods paper that the banks were over regulated and therefore should be reduced.

        • Inverted Meniscus

          He wanted effective regulation as opposed to No regulation which is what we got from Balls and Brown. Why am I bothering? You are just a lLabour stooge and impervious to the truth.

    • Holly

      It is possible that these two, who are after their old jobs, with one being promoted long before he’s ready, will end up doing their jobs exactly the same as they did before…Anti-business, yet avidly pro-bankers.
      Where else do these two fools know how to raise enough dosh to pay for all the duff stuff they are planning to do?
      I have said many times, the only safe way of predicting future behaviour is to look at past behaviour, and neither of these two are fit to rule us.

      • Mynydd

        How to raise enough dosh just ask Mr Cameron/Osborne, they are doing by the £bn each month.

    • Holly

      Most people probably couldn’t believe that they’d bankrupt their banks either, but hey bloody ho…
      Stupid is as stupid does……
      Plod on there Mynydd.

  • Greenslime

    Ask a mathematician what 2+2 equals and he will say 4. Ask an economist and he will say, “what do you want it to make?”

    Balls is a one of those – the Houses of Parliament are full of them – who feels that the world does not look upon him with quite the reverence they ought. He is also an exponent of two black arts, economics and politics, which are very much based on picking fluff out of the belly-button and shouting “Eureka!” from time to time. This is when they think up splendid wheezes which will enable people to lie on their sofa all day watching Jeremy Kyle whilst being fed grapes by Kim Kardashian – and still be paid by someone else who can’t! These are, of course, (largely) intellectual concepts. The ideas are carefully packaged and presented (spun) in a manner which highlights the upside and ignores the downside. Then you let the “if it is free, I’ll vote for it” British public vote you into power. The consequences of such policy making by people who have no practical experience of surviving outside their molly-coddled ivory towers is, usually, pain.

    Unfortunately, throughout history, most of these concepts have been plain wrong because these intellectual concepts do not take account of the natural chaos of things and the nature of the human condition. This means that both economics and politics is like predicting the weather. Until recently, weather forecasting was as pointless as having your palm read. With massive computers it is still a 50/50 call. Politics and economics are the same. This has meant much pain for the poor victims who participate in all these social experiments (Marx, Lenin, Stalin, Hitler, Mao, Pol Pot, et al) – often whilst those inflicting the pain sit in splendid opulence surveying all they have done.

    Investment banking is venal and recidivistic by nature. It is a place where psychopaths and autistics can thrive. Empathy does not live here. A blind pursuit of self and profit come together in a perfect storm with opportunity. The banks do nothing good unless they are forced to – and that in and of itself is a devil of a job. Their eye is on the fat bottom line at all times. Balls understands this. And he understands which buttons to press.

    Balls and the banks understand each other. Very well.

  • Peter Stroud

    It is pretty clear that Miliband is a highly principled Marxist, and will, if elected, take us back to the Old Labour ways. It is possible that Balls, the pragmatist, is less enamoured with this trend.

    • Joe Hawkins

      It’s pretty clear that he’s nothing of the sort.

  • Holly

    Mr James,
    Do you seriously believe that these two are ‘at odds’ with each other?
    IF so, and IF Miliband somehow gets his treacherous feet over the threshold of No10 do you reckon that the Chancellor, (if Ed Balls) will be allowed to ignore the wishes of the PM(IF Ed Miliband)?

    I would not trust either of these two in a well lit, crowded space, let alone in a cosy office planning how they would spend taxpayers money.
    You see I’d rather have a thief than a liar, because you know where you are with a thief.
    It seems you have learnt nothing about how Labour bods work, and THEY know it as well.
    They are LIARS.

    • pointlesswasteoftime

      Please provide examples of lies told by the two men.

      • Holly

        January 2011…
        Ed Balls, when asked if it was true that in the run-up to the financial crisis Britain was running the worst structural deficit than any of the G7 countries, replied, ‘he didn’t think we had a structural deficit at all in that period….
        October 2012…
        Re-2006-2007…Blah, blah, blah, ‘given the figures available’- ‘there was *not* a structural deficit on the current account’…
        In retrospect of course there was’- ‘I have *never* denied denied that’.
        Figures AVAILABLE in 2007 show…Oh dear…A structural deficit.

        Ed Balls, on camera, preaching to conference about a plan that leads to a double dip recession ( I presume Osborne’s). Yet denies this, on camera, ever doing so.

        Miliband is a different kettle of fish altogether, and not so much a liar as drastically underhand, and enjoys getting where he is by sh*tting on people as he tries to climb the pole….
        His brother, the 10p tax rate, offering a hand to other politicians during meetings to stop boundary changes, then ratting on them once he’s got what he wanted from them…Unions come to mind as another example of Miliband using people to further himself, then trying to dump them.
        Whichever way you look at it, whether as a plus or a minus, both appear to be completely untrustworthy, and if I had time to ‘probe’ for other instances there would be others I’m sure, but thanks for reminding me though. It has allowed me to remind others just how bad these two would be for Britain.

        • pointlesswasteoftime

          So one liar and one person you distrust. Fair enough.

          • Holly

            Told ya.
            One’s a lying gobshite, the other is an underhand gobshite.
            BOTH equally useless, AND untrustworthy.
            Unfit to govern.

            • Mynydd

              Being one you should know all about gobshites.

              • Holly

                Wondered where you’d got to.
                Nowt to say so insult,. Neat.
                But you see….
                I’m not the one who wants to be in government, so it really makes no difference whether I’m a gobshite or not, because housework, cooking, or picking up pet poo doesn’t have such a drastic effect on the rest of the population as these two gobshite will.

                NEXT!!!

  • Tony_E

    Of course the city loves Ed Balls – economists like Balls don’t see the potential hazard in pushing fresh credit into the system, increasing the money supply, and had totally bought into the model of the Greenspan era that pushed money into speculation rather than investment.

    He gave them a license to gamble, kept the cheap money flowing for them to gamble with, and arranged for the bailouts when they screwed up.

    He’s their best buddy alright.

    • Holly

      The bankers also know that they are, under his careful eye, in line for obscene amounts in bonuses AGAIN.
      Balls will need the tax grab to fund all Miliband’s handouts/schemes…
      Sorry…Investments.

    • telemachus

      Excuse me
      All you are complaining in respect of Ed Balls about is what Osborne is currently doing in spades

      • Inverted Meniscus

        Presiding over the fastest growing western economy last time I looked.

        • telemachus

          By QE

          • Inverted Meniscus

            Economically illiterate. In any event QE started under Labour. You will have to dig up yet another lie.

            • telemachus

              But maximised by Osborne

              • Inverted Meniscus

                You have no idea what you are talking about. You are an economically illiterate moron.

                • you_kid

                  You stupid, stupid, d u m b apologist of economic illteracy on a scale that no one has ever seen in post-war Britain. Will you please go to Holland and get a brain implant, they grow them in greenhouses there I am reliably informed.
                  Oh hang on, that’s tomatoes – never mind, won’t make any difference with you.
                  Gawd almighty! Where did your carers find an ejjitt like you?

                • Inverted Meniscus

                  Fuck off.

                • Holly

                  Well said.

                • telemachus

                  Please desist
                  However much you disagree there is no call for that

                • Jimmy R

                  Isn’t that the accepted definition of a Socialist?

                • Inverted Meniscus

                  Not quite. You have to add the words ‘totally dishonest and dedicated to mediocrity and failure’ for the full definition.

            • you_kid

              for fork’s sake. QE1 that was.
              then what happened was
              YOU did QE2, did it work, lad?
              YOU did QE3, did it work lad?
              YOU did funding for lending (who to, not SME, lad)
              YOU did Help to Buy and claimed it raised house prices – bollaux, lad
              YOU sweetly and without notice raised LONDON ONLY house and land values by 20% since 2013

              What next lad?
              Give us another story … can’t wait!

      • Tony_E

        Exactly that Tele. Balls and Brown opened the taps wide in the post 2008 crash, but they have proven very difficult to close. IN the USA, where their asset purchase scheme (QE as we call it) was about to be curtailed, the markets took shock and pulled the rug out of the taper.

        It should also be noted that asset price rises, seen through rising share and increased trading raised taxes, and were therefore very popular with the treasury on the noughties.

        Osborne has slowed QE more effectively here, but has used other money supply methods to keep pushing fresh liquidity in to specific parts of the market. In the end, the economy has to stand or fall on a sensible and long term money supply policy, one that keeps asset prices much more stable as there isn’t loose cash always chasing value. Until we get there, the economy certainly isn’t fixed.

        But I would maintain that while the USA pushes dollar creation, it’s difficult for other large economies to do anything but shadow that, because the effects on currency can be so damaging. However, you can see in the rising pound against the dollar that Osborne and Carney have been effectively tapering much more than Yellen.

  • Hello

    He’s also too late. Maybe at the start of the crisis, if you have a radical plan to reinvent accounting, you could dupe the public. They might think “Yeh, things are really bad, let’s take a punt with this slightly weird chap and his odd ideas”, but when things are getting better I don’t think they’ll be so keen to have Miliband take a wrecking ball to their securities.

    • telemachus

      City opinion is irrelevant to the election result
      Miliband is the spearhead to ensure victory
      What this tells us is that the Charismatic One, the one who will drive the economy forward before taking the reins from Miliband, is sensible and sound
      *
      He will be trusted on this but also on foreign policy and the EU
      I would trust Balls to see down Juncker more than Cameron

      • saffrin

        You are insane.

        • In2minds

          But actually rather funny?

          • Wessex Man

            no not at all when you’ve read some of his more disgusting lying comments, he is ver sad.

            • telemachus

              I will not take that from an apologist for racists

              • Holly

                Why is it only you lefty lot who prattle on about race and Hitler?
                I am a non white Conservative voter, and I get sick of hearing the left calling everyone who disagrees with them racist.
                I grew up here in the ’60’s & ’70’s and you have no idea what really being a racist consists of.
                Like thousands of other people of ALL colours, we will never forget which political party threw open the door to anyone and everyone, including those who mean us ALL harm.
                Time to grow up telemachus and stop thinking everyone who comments on here is white-male-middle class, and middle aged.

                • telemachus

                  You know well I refer to the reprehensible decision of Farage to put the anti immigrant billboards adjacent to areas with significant Asian populations
                  This may not have threatened you but certainly a number of Asian friends of mine felt very uncomfortable

                • Inverted Meniscus

                  And yet another lie.

                • Colonel Mustard

                  Well said Holly. It is part of their “creed” to demonise political opponents any way they can. telemachus himself has asserted several times that truth doesn’t matter but only winning power.

                • Alexsandr

                  he goes further. He reckons that to get the lefties in power is more important than democracy. He craves a DRR like police state

                • telemachus

                  What is the point of democracy that lets an elected elite milk resources away from the poor
                  *
                  Nouri Al-Maliki is a good advert as to the folly of putting all one’s belief in democracy

                • Alexsandr

                  sorry, but anti-democratic comment like this just shows what utter filth you are.

                • telemachus

                  Democracy as practiced in Iraq and leads to mass slaughter is worse than the Saddam dictatorship
                  Democracy as practised in the US is no democracy at all to the disadvantaged in the projects
                  *
                  Better a benign despotism that is fair to the population at large

                • Alexsandr

                  is that official labour policy?

                • Colonel Mustard

                  Yeah, every tyranny in history began with that idea and the vast majority were socialist in motivation.

                  Better that dangerously deranged people like you never get their hands on the levers of power.

                • telemachus

                  Franco? Pinochet?
                  You see you thesis is the motivation of the right in rounding Socialists up into Football Stadia prior to applying the vanishing cream

                • Colonel Mustard

                  Which part of ‘vast majority’ don’t you understand? And not my ‘thesis’. You are the one who spurns democracy and pluralism in politics and who thinks despotism is a good idea. The ‘benign’ bit always comes down to an elite thinking they know what is good for the ordinary people (q.v. Son of Communitht).

                  The Terror, Hitler (the national socialist), Stalin, Mao, Castro, Pol Pot, Honecker, Cousesceau, the North Korean Kims, etc.

                  http://gopcapitalist.tripod.com/socialistmyth.html

                  http://www.scottmanning.com/content/communist-body-count/

                  https://www.hawaii.edu/powerkills/COM.ART.HTM

                  http://en.wikipedia.org/wiki/The_Black_Book_of_Communism

                  The best part of the latter link is the really paltry attempts by various red nutjobs to defend the indefensible, just like you.

                • telemachus

                  Why am I surprised to see you quoting Stephane Courtois
                  Not quite a Makhnovist but describes himself as an anarcho-Maoist
                  *
                  That is until he was thrown out

                • Colonel Mustard

                  I’m not quoting him but only providing a link to an article about a book edited by him. So yet another attempted deflection by you to dodge the main point, more silly ad hominem labelling and totally irrelevant to the big picture.

                  Since you have mentioned Courtois, however, he also argues that communism and national socialism are only slightly different totalitarian systems, and that the National Socialists in Germany adopted their repressive methods from Soviet methods. With his background within the communist collective he is well placed to judge.

                  Your relish for Soviet/NSDAP type totalitarianism is well attested from many comments you have made here and I would argue that most tribal socialists have such latent tendencies. Within all strident socialist control freaks are hard line communists wanting to exert absolute power. They are only constrained by limits within the current political system and societal acceptability rather than any moral qualms. A classic example of this is your dismissal of Stalin’s victims as a “necessary” outcome of his power.

                  Even were I to be a “Makhnovist” (an anachronistic and silly term to try to apply to a 21st Century English conservative) that would pale by comparison to the extremist aspirations you represent. For all your sanctimonious boasts about “caring” they are frankly repulsive and you should be thoroughly ashamed of them.

                • Inverted Meniscus

                  You mean like socialism which cost what, a mere 100 million lives in the 20th century in its various disgusting forms.

                • Inverted Meniscus

                  Holz, it is what leftists do. They have lost all of the arguments so they are left with smearing their opponents.

                • telemachus

                  But the argument is in the process of being won
                  Next May it will be won

                • Inverted Meniscus

                  No Labour will simply tell a lot of lies in the he of being elected.

              • saffrin

                Happy with proven liars, fraudsters, traitors and war criminals though.
                No wonder you support Labour.

                • telemachus

                  No I was not happy with those who ordered the sinking of the Belgrano when sailing away
                  A bit like Longinus keeping on stabbing as he walked away

                • Colonel Mustard

                  Another lie. You should read what the Belgrano’s Captain had to say about the matter in his ‘1093 Tripulantes del Crucero ARA General Belgrano’. He refutes that the attack was wrong and confirmed that his ship was only temporarily sailing to the west and he was still under orders to attack any British ship that came within range of his guns.

                • telemachus

                  I am so often witness to the spin of the victors
                  And the tendency of the vanquished to curry favour with the victors

                • Colonel Mustard

                  You mean you prefer the Queen’s enemies. A tradition within your party.

                • saffrin

                  The Falklands war was the only legitimate war we’ve been involved in since WW2 and the Belgrano was a legitimate target whatever direction it was sailing in.
                  Your Lot, traitors to their traditional voters, liars about everything, more elected labour politicians in prison than any other and for a party that came to power in 1997 on a ticket of An End To Sleaze, turned out to be the most corrupt in living memory.

                • Inverted Meniscus

                  Well it is the party of lies, lying and filthy unprincipled liars.

              • john p reid

                Can you define an apologist, someone who defends their right to free speech, someone who highlights they’re not a racist for giving concerns about immigration, or lies are being told, or someone who points out Islam isnt a race but a religion,

                • telemachus

                  Your post speaks to the impoverishment of the soul
                  Free speech is not justified if that free speech directly or indirectly makes others suffer
                  Social responsibility in addition means ensuring fairness to one’s brother
                  Too many are truly not their brother’s keeper

                • Colonel Mustard

                  “Free speech is not justified if that free speech directly or indirectly makes others suffer”

                  And who decides that? Socialist nutjobs no doubt.

                • Inverted Meniscus

                  As long as what can or cannot be said is decided by the Fascist Labour Party.

            • In2minds

              Wessex Man, there you have me, I don’t seriously read them, just skim!

        • Wessex Man

          you’ve only just realised that?

      • Alexsandr

        how will ed b0llocks do anything without a commons seat? He is in a very marginal constituency so hopefully he will be gone this time next year.

        • Holly

          Hasn’t this liar just been issued with a summons over his appalling driving?
          Maybe he should resign for bringing politics into disrepute?
          (I know I howled with laughter at that one as well).

          • telemachus

            So what human being has not had a traffic summons
            *
            This emphasises his charismatic appeal

            • Inverted Meniscus

              That comment suggests that you are clinically insane.

              • telemachus

                By suggesting a Politician should be one of us?

                • Inverted Meniscus

                  That piece of amoral filth is not ‘one of us’.

                • telemachus

                  Certainly not one of the racialist bunch that inhabit the right of politics these days

                • Inverted Meniscus

                  He is a piece of amoral filth and incompetent. A stain on British public life.

                • telemachus

                  I think you already made that point
                  Ed is the kind of politician that makes voters smile and feel good
                  The opposing parties view him with concern

                • Inverted Meniscus

                  He is viewed with contempt as the arrogant, preposterous, dissembling piece of sh*t that he is.

                • telemachus

                  That is what the right who fear him say to smear him

                • Inverted Meniscus

                  I think you will find that most people perceive him to be thoroughly dishonest and incompetent.

            • Holly

              Bet you daren’t tell the bod who he hit that. You might get punched in the face.

              Balls has too high opinion of himself, like the rest of the arrogant, yet utterly useless opposition front bench.
              Unable to encourage the electorate with workable policies, so simply groan about the current lot, while promising to be exactly the same, only different.

              I have NEVER EVER had a traffic summons.
              Neither has any of my sisters, or my mum….But none of us are sitting in Parliament.
              Wasn’t there a big fake row about some bod never allowing themselves to be in a position where he would end up punching another bod in the throat? The offended bod reckons that the offending bod should be dealt with by their boss.
              What do you reckon Balls boss’s opinion on Balls actually hitting someone,(all be it a vehicle) and what if any action is the great new hope going to do about it?
              Zilch…The quicker it is silenced the better eh?

              • telemachus

                No one wants to be led by Goody Two Shoes

              • Joe Hawkins

                Yes but wait until you’re old enough to drive.

        • Joe Hawkins

          It probably won’t be a marginal after 2015, though. Labour is certain to improve on 2010. The only question is if it’ll improve enough to become the governing party.

          • Alexsandr

            Unless UKIP target the seat to make it a 3 way marginal. They are doing quite well with the white working class voters, I hear. Decapitating b0110cks would be quite a coup for them.

            • Inverted Meniscus

              And a joy for the rest of us.

          • Inverted Meniscus

            Well let’s hope they don’t. A coterie of economically illiterate preposterous morons is the last thing Britain needs and the Labour front bench has those in abundance. I think one structural deficit of circa £168 billion is enough.

      • john king

        What an absolute pillo*k you are. an absolute laughing stock.

    • HookesLaw

      One question Balls needs to answer is this…
      ‘If returned to power will you reinstate the tripartite banking regulation system you had instigated before the crash?’

      If this t ripatite system was so good surely he will want to return to it?

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