Monday, 26 September 2011

Labour's vision

as seen by the Financial Times:

"If the job of any opposition minister is to criticise the government, to present alternatives to its policy and to persuade voters to support your ideas, then Ed Balls has a somewhat mixed record as shadow chancellor.

On the first count, he has certainly been a success. Since taking over in January, he has been unsparing and vocal in his criticism of the coalition’s austerity policy, warning tirelessly that it was cutting the deficit too hard and too fast. At a time when the economy overshadows every other part of British politics, he has raised Labour’s profile.

But on the second and third, Mr Balls has made less headway. In spite of an anaemic recovery – one that would appear to have borne out his warnings – he has failed to come up with a persuasive alternative. In part, that is because any message would struggle to get through. Public trust in the opposition’s economic competence is low. 

Trust must be rebuilt for Labour to be listened to. Mr Balls understands this. Hence his promise to subject Labour’s future economic plans to tough fiscal rules overseen by the Office of Budget Responsibility. But he will continue to struggle so long as the opposition is perceived not to offer a real alternative to the coalition’s plans. 

Mr Balls’ speech to the Labour conference illustrated the problem. While promising a “steadier and more balanced” plan to reduce the deficit, Mr Balls admitted that Labour would not reverse the cuts and tax rises the coalition had pushed through. Voters could perhaps be forgiven for not understanding just what Labour would do differently.

A recent YouGov poll underscores the problem. While a majority believes that the coalition is managing the economy poorly, the Tories still have a lead over Labour as the party most trusted to fix the UK’s economic problems. 

Mr Balls came up with several ideas of how to pep up growth. Some of these smacked of populism, such as the proposal to apply another bonus tax to the banks and use the proceeds in some unspecified way to guarantee work for 100,000 young people.

But the most eye-catching ideas involved bringing forward investment projects and temporarily cutting National Insurance for new hires to encourage companies to invest and take on workers. These are not bad ideas. They may also be ideas that the coalition is itself considering. If the government does ultimately adopt them, at least Mr Balls will have positioned himself to score a few points."

Financial Times