When Ed Balls lists the greatest accomplishments of his career, he does so with a wonderful lack of modesty. He may have been a mere Treasury adviser when Labour came to power, but even then he was — we now learn — pulling the strings of Tony Blair’s government. Bank of England independence was his idea. Ditto Labour’s decision to stick to the Tories’ eye-wateringly tight spending plans for the first few years of its rule. But Balls’s proudest boast, and one repeated with striking regularity, is that he stopped Britain joining the euro.
Not so long ago, the shadow chancellor would have kept this as quiet as his friendship with Damian McBride. When Balls drew up his ‘five tests’ for joining the euro, he was subverting the will of a staunchly pro-European Labour party. But British politics has since changed. No one, not even Nick Clegg, admits to being in favour of the euro. Public opinion is shifting, too: only a third of the country regards Britain’s EU membership as a good idea. The old left-right divide over Europe, which governed British politics for two decades, has disintegrated.
None the less, as Balls well knows, Europe remains a painful subject for the coalition. It leaves the Conservative leadership flitting awkwardly between its own Eurosceptic MPs and a pro-European alliance of civil servants and Liberal Democrats. Cameron and George Osborne have spoken vaguely about renegotiating’ Britain’s EU membership. But civil servants simply ignore the idea.
Labour can sense the government’s weakness here. Last month, when the phone-hacking scandal was at its peak, Chris Leslie led other Labour MPs in opposition to the raising of Britain’s exposure to European bank defaults. Alistair Darling and Gordon Brown had been strong advocates of strengthening the IMF guarantees, so this represented a significant U-turn. As rebel Conservatives joined in, the government’s majority was reduced to 28 — its smallest on any vote so far.