Did Balls cause the recession?

We take a close interest in Ed Balls and his use of figures here at Coffee House, and it seems that this interest is reciprocated. The Shadow Chancellor has just been on Daily Politics where he revealed himself as a regular reader. He was confronted with some of the facts about spending and the deficit — and whether there have been ‘deep, harsh cuts,’ as he has falsely claimed. When Andrew Neil presented him with the numbers from our earlier blog, he replied that this was cash terms. He’s right, but adjust for inflation and core government spending (that is, stripping out debt and dole) is down just 0.8 per cent. Is that really what caused the crash, asked Neil. Really?

Balls then changed tack. He downplayed his ‘too far, too fast’ line and switched to another excuse: that it was fear of coming cuts, rather than the effect of actual cuts, that really caused the recession. Everyone is so terrified of the coming axe that they desisted from their economic activity and bunkered down. He cited George Osborne ‘boasting’ about an extra £40 billion of cuts on top of Labour’s figure. But, if this is the case, we should also ask: who coined the phrase ‘deep, harsh cuts’ in the first place? It was Balls himself. Using his own logic, Balls was also responsible.

I don’t believe that for a split second, of course. Balls actually had a point, later in the interview, when he blamed tax rises for slowing growth. Indeed, he would have a plausible case if he kept his critique to what was true. But, as I remarked to his excellent special adviser, Alex Belardinelli, Balls just can’t resist throwing in his own untruths. He just has to stretch the truth until the elastic snaps.

So is this the last we’ll hear of his blunt claim that cuts caused the recession? I very much doubt it. Balls will trot out that line the next time he’s talking to an interviewer whom he can be sure will not pull out an economic graph to challenge his fictional economic history. But it’s nice to know that he reads the Coffee House posts — and, I’m sure, the comments.