Many CoffeeHousers will have heard Ed Balls’ preposterous performance on the Today
programme this morning. We have transcribed it below, to put it on the record. Three things jump out at me.
The way that Balls is the last purveyor of Brownies, still talking about new jobs when all of the new jobs can be accounted for by immigration.
Next, the way he airbrushes his record to strip out all the disasters. It was the Balls-Brown economic model which rigged the Bank of England so it would keep rates artificially low, flooding the economy with dangerously underpriced debt and putting not just the government but the whole economy on a debt binge, as John Humphrys rightly points out.
And, most absurdly, he denies that he borrowed too much by pointing to levels of net debt – not the deficit. The Brownites inherited a country with low net debt, and vastly increased it. The scandal is that the UK deficit was 3 percent of GDP in the boom years – if you enter a recession with such a deficit, then you end up with the worst deficit in the EU. Danny Alexander, who put in a good performance today at the dispatch box, rightly pointed out that UK net debt is set to rise faster than any G7 nation.
This is the Balls legacy, but by conflating debt with deficit (his favourite tactic) he hoped to wriggle out of a tough interview. The result is below:
John Humphrys: There are two big questions in British politics, the 1st is whether the coalition can hold together; the second is whether the Labour party can hold together. It’s not quite that simple for the obvious reason that the coalition is two parties, and the Labour party isn’t, not officially anyway. But for years it was divided between those who supported Blair, and those who supported Brown. And the question now as the party struggles to decide who to choose for its new leader is whether it can heal that division. It hasn’t been helped by Peter Mandelson, Lord Mandelson’s, book about to be published, and he’s got a lot to say about it. Ed Balls is one of the leadership contenders and he was about as close to Gordon Brown as it’s possible to be and he’s with me. Good morning to you. Ed Balls: Good morning John. JH: Do you regret those years of division? EB: I don’t regret at all the national minimum wage, three-and-a-half thousand Sure Start children’s centres… JH: No, that’s not what I asked you, I asked you about the division. EB: But, John, what we had in the last 13 years is a Labour government which achieved more for jobs and social justice, did more redistribution than any government since 1945. I think put our health service on a sound footing, transformed education, so we had the best generation of teachers ever. I think it was a profoundly successful government. And the fact is there were times when Gordon Brown and Tony Blair had disagreements and arguments, but out of that creative tension came some huge achievements and I think the Labour party is very proud of what was achieved in the last 30 years, 13 years and deeply fearful about what this new Conservative/Liberal coalition is going to do. JH: All right, I’m not going to talk to you about that the Conservatives are going to do because we’ll come to that in a minute. But my question to you was whether you regard, whether you regretted the divisions of those years and you appear not to have done. EB: Well, look, there were times… JH: I mean we’re in a new period of politics now aren’t we? New policies, coalition policies, everyone loves each other, yet you were at it hammer and tongs and you don’t regret it. EB: Well, there were times where we had to make big decisions and I’ll give you one example: the issue of joining the single currency. Tony Blair wanted to join the single currency, so did many in the cabinet; I personally thought that would have been a profound mistake for Britain, for our country, I made that argument very hard, as did Gordon Brown; I think we look back now and say we were right not to join the single currency and so… JH: Yes, but you know that isn’t what I was talking about, I’m talking about the division, if you prefer the word insurgency I’ll use that, between you and number 10; between no. 11 and no. 10. EB: But I’ve just said to you John… JH: That fact is there were endless attempts by number 11, by Gordon Brown, to bring down Tony Blair so that he could take over. That’s what I’m asking you whether you regret. EB: But that’s um, complete nonsense. The fact… JH: Really? So Mandelson’s got it wrong, Peter Mandelson’s got it completely wrong has he? EB: Well, er, I’ve not read Peter’s book, I’ve only read the… I’ve only read the… JH: But you’ve read what has been said about it…You’ve read… EB: Well I’ve read the extracts JH: And you’ve read the interviews that he’s given EB: And the extracts are all about what happened, um, in the last four or five years as far as I can see… but, but… JH: Well can I help refresh your memory a little bit then? Because what he says is that he was very, Tony Blair that is, was very badly served, and I’m quoting “the unbridled contempt that some people around Gordon had for Tony and those who worked for him was very destructive.” Now nobody, nobody was closer to Gordon Brown than you. EB: I was asked on Newsnight, three weeks ago, ‘Who was the most successful Labour leader of the last hundred years?’ and I said Tony Blair, which was the truth. JH: And I’m now asking you about the way you served Gordon Brown and therefore caused damage to Tony Blair. EB: I, I…well…ok… JH: This is what, this is what Peter Mandelson is suggesting… EB: I entirely, I entirely… JH: And this is what I am asking you about. EB: I entirely refute that allegation… if the allegation is being made JH: So Mandelson’s wrong… EB: Yes JH: Well it’s not ‘if’, here it is. You read the interview, I’m sure you’ve read the interview… EB: To be honest John, to be honest John, I didn’t. JH: All right, well that’s a bit surprising given… EB: I was thinking about the future of our country and the huge… JH: Not about the past, not about the past government at all? EB: No! Look… JH: Not about the way you behaved in government? EB: Look, I’m very proud of the way I acted in government. I think Bank of England independence, the windfall tax, not joining the euro, but also, securing the national minimum wage and Sure Start were huge achievements of which I’m very proud. But look, we had our disagreements; in 199… JH: No no, they’re not just disagreements, you’ve said this a number of times, we’re not just talking about disagreements… EB: I haven’t finished this sentence yet John, so when I do… JH: Well, no, but you did, you said that earlier. You talked about your achievements, and yes a lot of people will say you achieved a great deal in government in lots of areas, many people will agree with you about that. Many people will also say you did some very bad things; I’ll come onto that in a moment as well. But the point at the moment is the extent to which this insurgency, and I’m using Peter Mandelson’s phrase here, caused damage to the government and I’m asking you whether you regret that. EB: I was the chief economic advisor to the Treasury JH: His closest ally EB: I was never involved in an insurgency. I was very close to Gordon Brown but I also saw Tony Blair very regularly. But we had our disagreements; in 1996 he wanted to go into the election ruling out a tax rise, I said to him I thought that would be a profound mistake for which we would pay a very heavy price. JH: You helped stage a coup against him in 2006 EB: That’s absolute total nonsense John JH: Andrew Rawnsley says so in his book EB: Well, ha ha ha… JH: And he’s got quotes there “It’s too late… EB: I have to say… JH: He quotes you “It’s too late. It’s all in pl…” EB: I have to say John, I have to say John if you are relying on the Andrew Rawnsley book for your facts, no wonder this interview is so flawed. JH: No I’m relying mostly on Peter Mandelson, but I’m quoting from the book, your quote “It’s too late. It’s all in place. It’s going to happen.” Not true is it? EB: On the day, on the day Gordon mistakenly didn’t call the election, according to Andrew Rawnsley’s book I’m walking in the rose garden with Gordon Brown. In fact I was in my constituency two hundred miles away. There are mistakes galore, and the idea that you’re going to go back and reinvent a fiction based upon Andrew Rawnsley’s briefings anonymously… JH: No, all I’m asking is whether you regret any of it… EB: I am hugely proud of what the government achieved, Tony Blair and Gordon Brown, we achieved a huge amount for economic strength and social justice and that is going to be destroyed, if we’re not careful in the next few of years, in the biggest economic mistake and catastrophe for a generation JH: But you were responsible for a massive economic mistake, a catastrophe, you, in very simple terms you borrowed more, spent more of our money, of taxpayers’ money, than this country could afford and left us with colossal debts. EB: I presume you have been reading Andrew Rawnsley’s version of that as well, because that is a million miles away form the truth John. The fact is we went into this downturn with the lowest level of national debt compared to France, Germany, America, Japan, but… JH: I’ve been reading McKinsey, will that do for you? Will you settle for McKinsey? EB: But, but, John will you please let me finish at least one sentence before you move on to your next briefing. The reality was, we had the biggest financial crisis round the world since 1929, it affected banks and investment banks all round the world, deficits went up all round the world. The idea that this was my mistake – it was a colossal global mistake. And the issue we should be talking about, if you want to talk about the Labour leadership is who’s got the insight and the understanding to put that right, and I, as I said, and I know you don’t want me to say this, because you want this to be entirely retrospective, the fact is the Conservatives and Liberals are making a catastrophic mistake on the scale of the 1930s, surely that’s what we should talk about? JH: Yes it is, but your record is vitally important because you want to be leader of the Labour party and therefore you want to become Prime Minister of this country. And you’ve dismissed entirely the question of how much we are now in debt and you say that I got it from a book, I didn’t, I got it from a McKinsey study, a McKinsey study – an outfit you respect usually – of debts of the world’s major economies, on that basis, and I’ll give you a quick figure here, the UK’s debt to GDP ratio was 469%- the highest in the world, and that is because, I’m quoting… EB: Our debt to GDP is 469% John? JH: “In 2008 the UK’s debt to GDP ratio was 469%- the highest in the world, 459%.” EB: What debts are you including in that? JH: I’m quoting from a McKinsey study. All of them, the whole lot: your debts, public debts, family debts, mortgage debts, the whole bid. Added all together. You encouraged a huge amount of spending… EB: Ha ha ha, oh my gosh, you’re making me rather more powerful than I thought, I didn’t realise I could be responsible for the debts not just of the government but of every company, every household, every JH: The government encouraged massive borrowing and never said ‘hold on a moment.’ EB: Absolute nonsense John. The fact is we had low interest rates; the fact is we had low inflation, and people were borrowing. We had a million more homeowners and that was a good thing. What happened was a huge financial crisis, which put deficits and debt up around the world, it was on a scale of 1929; but the question is, do we learn from the lessons of history, and the fact is the last person to say we got to cut spending and deficits now, immediately, before Margaret Thatcher, was Ramsey MacDonald in 1931. And in my view, David Cameron and Nick Clegg are repeating the MacDonald mistake of 1931. I fear that we’re going to go into a period of profoundly lower growth and higher unemployment; this is a very, very dangerous time. What you need from a Labour is a leadership candidate who actually understands the economy and can take the argument to the Conservatives. JH: Ed Balls, thank you very much indeed.
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