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Where Ed Balls went wrong

30 June 2013

8:27 PM

30 June 2013

8:27 PM

In today’s Observer, Andrew Rawnsley says that Ed Balls has become a victim of his own success. The Shadow Chancellor predicted the George Osborne ‘would smother growth by cutting too far, too fast…The coalition jeered that Mr Balls was a deficit-denier and an unreconstructed old Keynesian,’ says Rawnsley — as if this has been subsequently disproven. But rather than take a bow, poor Mr Balls has to adjust to the consequences of  Osborne’s failure by admitting even he’d have to administer austerity. So it looks like a concession! Unkind souls like Dan Hodges conclude that ‘Ed Balls is now sleeping with the fishes.’

In fact, Balls is in trouble because his first analysis was fake. The cuts were not too deep and too harsh, but he pretended otherwise because he thought it would hurt Osborne more. Even before the election, this was his plan: ramp up spending, jeer the Tories as they cleaned up the mess, promise to spend more then actually do so if the budget was balanced by 2015. He’d portray his opposite number as a crazed Tory, cutting from the blackness of his heart. The BBC, whose budget was being cut, would need no persuading that the sky was falling in. Even Osborne was exaggerating the nature of the total cuts, as it gave the coalition a sense of mission: get rid of the deficit. Yet below, we see the limit of Osborne’s cuts: a total 2.6 per cent spread over eight years. And for comparison, on the left, what Labour did last time it had to cut.


The Balls narrative – that growth was choked by the cuts – dissolves on contact with the facts. But he chose this line of attack, because he reckoned (correctly) that no one would ever catch him out. As Peter Oborne says in this week’s Telegraph podcast Balls became Osborne’s useful idiot: distracting attention from his failure to trim the size of the state.

But Balls miscalculated. Where Osborne did cut, there was no great damage (just as, in the Labour years, the money did not help things greatly). Police spending is down, as is crime. Arts spending has crashed, and Britain’s cultural life is stronger than ever. Scores of new free schools open every year.

Osborne did, however, fail to tackle a Cuts what Cuts covergovernment machine that has grown out of all proportion to its usefulness. Instead of abolishing the deficit by 2015, we’ll have the worst deficit in the Western world by 2015. It gets worse. Over the next five years Osborne plans to trim back total state spending by a total – a total – of 0.3 per cent. (That’s in real terms: in cash terms it will rise). But it’s hard for Balls to nail Osborne for his squeamishness on cuts, as it’s the very opposite vice to the one he’s spent the last three years accusing him of.

Balls went for the fake ‘cut’ attack line because, I suspect, his bloodlust got the better of him. Now, he will manage to persuade only a handful of his dupes that the recovery was killed by vicious cuts. Anyone capable of consulting the OBR data tables will see that this is untrue. Even Paul Krugman has stopped using Britain as an example of austerity.

So Balls now has to pivot. He is having to switch from saying ‘Osborne cut too deep and fast!’ to saying ‘Osborne has failed to cut enough and balance the budget!’. He looks ridiculous in so doing. As Rawnsley concludes, Balls has lost credibility. Like a guard dog deterred by being thrown a piece of steak, Balls got stuck into what he thought was easy meat while his real target slipped away. Lucky old Osborne.

I’ll leave CoffeeHousers with the opening line from this week’s leading article:

‘The Labour party used to joke that the Tories would act as their cleaners: win, take the political pain, abolish the deficit by 2015 and then hand over a balanced budget when they lost the election. George Osborne has, at the very least, put paid to that. Whoever wins the next election could close every school, open every prison, cede Northern Ireland, close every embassy and sack every soldier, sailor and airman — and it would still not be enough to put the government back in the black.’

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