To the chagrin of CoffeeHousers, I have long rated Ed Balls and his abilities. He has a degree of brilliance, albeit tragically deployed in the services of a destructive economic agenda. But as we welcome him back, it’s worth reminding ourselves that his abilities are of a specific type. He understands economics (even though he did PPE) but his speciality is in creative accounting. His only tactic is to spend, borrow and cover both up by cooking the books. He is a trickster, not an economist. More Arthur Daley than Arthur Laffer. In my News of the World column today (£) I say he is dangerous to Labour as well as the Tories, perhaps more so. But it’s worth recapping what we’re dealing with. Until Balls came along, Brown was struggling on economics. Balls was the brains and introduced a brazen certainty, ferocious energy and guerrilla tactics. His language was so technical and baffling that no one challenged it. A businessman like Michael Heseltine saw through it and memorably declared “It’s not Brown’s. It’s Balls!” . And this is the way to treat it. A joke. A con. A ruse. But as the Tories lost their intellectual self-confidence (and heavyweights like Tarzan), they stopped challenging the message that Brown and Balls were belting out. The two worked so well together because they have the same high opinion of themselves and disdain for everyone else. This is summed up by a vignette in yesterday’s FT. 'By the time he arrived at the FT, Balls was brimming with self-confidence, leading the line in the newspapers’ football team with bruising aggression. After one woeful first-half performance, Balls told his team mates “You’re all fucking useless.”' This sentiment probably reflects what he thinks of most of his Shadow Cabinet colleagues (including Ed Miliband). Same with Brown. To understand Balls, one must understand his self-regard. He’s convinced he is right; this is a huge weakness, given that he has been proven to be 110 per cent wrong. He genuinely can’t see this - and probably never will. Yet in opposition, Osborne caved. He signed up to the ruinous Brown/Balls spending plan. At the time, the Tory argument was that one needs ‘permission’ to make an argument: ergo, some causes (like cuts) are simply out of bounds. Over the last decade, British spending - as a share of GDP - rose by more than any other country over any other post-war decade. The Brownites acted like sheep dogs, herding their Tory flock into accepting a high-spending consensus. Balls, when he comes back, will want to try this trick again. He has his tricks, such as saying ‘reducing tax’ when he means ‘increasing tax’ (we caught him out for this on Coffee House). He speaks about ‘supporting the economy’ while ignoring the other side of the debt coin: the effects of debt interest. Osborne can, and should, talk incessantly about the burden of debt we are leaving for other generations. He can humanise it. Because debt is not an abstract concept: it can only be paid by people. You have to put a face on it: the face of a voter’s child, grandchild and great-grandchild. These are the people whose money Balls wishes to spend. I can argue, with room-emptying conviction, about the importance of metrics in British political debate. He who sets the yardsticks wins the debate. Balls will argue that Osborne’s mild cuts are too harsh by keeping it all verbal. Osborne can quash this by giving a crucial figure: his spending cuts average just over 1 percent a year. Which household, or business, has escaped so lightly? Osborne might also care to publish his cuts in the international context. The only place that either metrics have been published is in The Spectator (all the more reason to subscribe, from just £1 an issue). From his journalist days, Balls worked out that the media will use whatever metrics are fed to them. It is a flaw in British reporting, which Balls and Brown exploited to the full. Until a few years ago, the British public meant “inflation” as being the Retail Price Index. Brown told the media to switch to the far-lower Eurozone-compliant Consumer Price Index (CPI) and they did. Why? Because journalists repeat metrics. When the IFS talks about “child poverty,” its definition is reprinted in the press uncritically. He who sets the yardsticks wins the debate. Balls concealed debt with PFI (and, on a global scale, with the so-called International Finance Facility). When the crash came, Brown even produced a fake national debt measurement that excludes the cost of the bailouts - something the Irish didn’t do, in spite of having much greater cause. It worked. Choose the right metrics, and you get away with murder. But by setting the metrics, Osborne can set the terms of debate; and he’d best do so, before Balls does. The first battle will be crucial. Inflation is booming; this will be Balls’ first target: inflation is hurting households, he’ll say. The CPI index is 3.7 percent now, heading to 5 percent soon. He can make much mischief from this, as it can be used to present a narrative of government failure. Osborne must prove that this is another Balls con, which will be no easy task. Osborne has had much success in his opening months. He has established a cuts agenda which has broad popular support - look at the protests in Greece and Ireland to see what an achievement that is. But we’re still waiting for his ‘growth’ agenda - which, frankly, we could have done with before the election. So far Osborne has had the huge benefit of an innumerate Labour opposition. That has just changed. Balls is, fundamentally, a con-man. He should be easy to expose. But only if he meets a response which is more robust, thought-through and forcefully advocated than those which the Conservatives used against him in the past. Balls' fatal weakness is that, to him, the fight is everything. In government, he didn't think about the economy or the taxpaying public; he just thought about screwing the Tories - hence the "scorched earth" policy after the crash. Then, he damaged the country; now, he just stands to damage the Labour Party. To fight Osborne, he'll drag Labour further to the left. It will look untenable, and unelectable. Stephen Williams of the Lib Dems put it the best: Balls is not just a deficit denier, he's a deficit enthusiast. The Sunday Times today reports how donors are abandoning Labour as it moves further to the left. Balls' bloodlust will, in the end, prove his undoing - just as it did in the leadership contest. The question is how much damage the Tories allow him to inflict on the government in the process. Filed under: Coalition (899 more articles) , Conservatives (1467 more articles) , Cuts battle (56 more articles) , Economy (401 more articles) , Ed Balls (187 more articles) ,George Osborne (362 more articles) , Gordon Brown (826 more articles) , Inflation (31 more articles) , Labour (1477 more articles) , UK politics (3056 more articles)Re-introducing Ed
MATTHEW HANCOCK MP 6:02pm
We already knew Ed Balls was behind Gordon Brown’s economic policy. He devised the policy on spending that left Britain with the worst deficit heading into the crisis, and wrote the bank regulations that his colleague Douglas Alexander attacked earlier today.
What we have discovered today, from Balls’ first foray into economic policy as Shadow Chancellor, is that he was also behind the old Brown ploy of twisted facts and absurd assertions.
First, he claimed the public finances are better than the Treasury forecast. Yet the independent Office for Budget Responsibility found...Exposing the con man
FRASER NELSON 3:24pm
Posts
