Ed balls

Ed Balls has had plenty of warning about how politically dangerous this month's spending review will be for him. James reported in April that George Osborne planned to use the settlement (when he eventually gets it) to prod the Labour party. But perhaps it's also the party's inability to make polling hay from the Tories in crisis over the past month that has provoked not one but two big policy speeches from the Labour leadership this week. The concession that Balls will give in today's speech about universal benefits no longer being automatically justifiable has attracted the most attention.

Anyone reading Sam Coates' interview with Ed Balls in today's Times might be forgiven for chucking their newspaper on the floor with a chuckle, muttering about the hypocrisy of a Labour shadow Chancellor lecturing George Osborne on borrowing. Balls warns that the government's plans to offer Royal Bank of Scotland shares to the public will add billions to the deficit. He tells the newspaper: 'A giveaway or loss-making firesale at the current share price would and billions to the national debt at a time when poor economic growth already means borrowing isn't coming down.' But this is an attempt by Balls to appear fiscally responsible while making the case for 'good borrowing' elsewhere.

There is always something quietly devastating about a pronouncement from Lord Mandelson. Today more polls reveal the Labour party is failing to make headway when the Tories are in an almighty flap, and the New Labour peer gave his tight-lipped, politely-delivered prescription on the Marr Show for how Ed Miliband can salvage things: 'I think that Ed Miliband has two tasks. He has one, to continue building up his economic credibility and confidence people have in Labour's ability to manage the public finances and people's own money. He has made a very good start at doing that.

Peter Hain is pessimistic about Ed Miliband's chances, in spite of what the bookies say*. 'If a general election was held tomorrow, Labour wouldn't win a majority,' he writes in Progress Online. 'The truth is if we want a majority in 2015, we need to be performing better than we are now.' He also zeroes in on the problem: Ed Balls, and how few of his Shadow Cabinet colleagues will support him: 'We cannot afford to be equivocal about our economic policy. We need to be more upfront with the public about our intentions. Yes, we will borrow more in the short-term, in order to generate growth that will reduce borrowing in the medium-term. It makes sense to do so with interest rates so low.

It's not a case of will they, won't they when it comes to whether Labour would borrow more, but will they admit it and try to sell this plan to voters? In the past few days, we've seen the party trying to work this out in public. Ed Miliband, in his awkward World at One interview, knew that saying 'yes, we'd borrow more to fund the VAT cut' would provoke triumphant howls from his opponents, and so ended up nervously jabbering away as Martha Kearney asked the same question over and over again. But yesterday he told Daybreak that 'I am clear about this: a temporary cut in VAT, as we are proposing, would lead to a temporary rise in borrowing'. He added that 'I suppose I felt it was rather a commonplace' to make that clear the first time around.

The political mood has shifted these past few weeks. There’s now, as the Sunday papers demonstrate, far more focus on Labour than there was a couple of months back, something which pleases Number 10 which is confident that Labour is ill-equipped to deal with much scrutiny. Ed Miliband is coming under pressure to be far more specific about what he would do in government. Much of this is being driven by the coalition’s spending review for 2015/16, the results of which will be announced on June 26th. If Labour wins the next election, it’ll be in office when these cuts are being implemented. This leads to the question of whether or not Labour will accept these spending plans.

Ed Miliband’s speech to the Scottish Labour conference is another illustration that he intends to depict ‘One Nation Labour’ as the answer to so-called Tory divisiveness. Miliband told the conference: ‘As leader of the Labour Party [I] will never seek to divide our country and say to young person in Inverness or the older worker laid off in Ipswich desperately looking for work, that they are scroungers, skivers or somehow cheating the system.’ But in the context of today’s Independent story about Labour planning to go into the next election committed to higher spending than the Tories, a story which Ed Balls crossly contested on the radio this morning, what struck me about the speech was the way Miliband talked about Labour’s policies.

Ed Balls is a good street fighter, but not a very loveable one. The polls suggest he is perhaps the least popular figure in frontline politics. His manner too abrasive and his political bloodlust too obvious. As James Forsyth says in this week's View from 22 Spectator podcast (below), Balls is — at best — Miliband's 3rd choice for the position of Shadow Chancellor. His first was Alan Johnson and Yvette Cooper (aka Mrs Balls) was asked before it fell to Balls. A triumphant Alistair Darling, fresh from a 2014 Scottish referendum victory, may well be more palatable to the public. It's unlikely that Balls would move over for Darling - although he may not have the choice. We know that Darling loathes Balls (which admittedly, in the Shadow Cabinet, is not saying much).

Ed Balls has just given his post-Budget briefing in parliament. The striking thing about Balls, no matter how much you might disagree with him, is how much he relishes these occasions. His whole face lights up, like a large Cheshire cat that has spied a snoozing mouse, as he goes in for the kill. He even went through a list circulated by CCHQ of 'questions for Labour'. No wonder some Tory MPs wish they had someone on their side who loves the political game as much as the Shadow Chancellor. Now, Balls had plenty of soundbites: he has calculated that you'd have to drink 50,000 pints of beer a year to make up for the impact on personal income of other tax rises and cuts.

Further to Isabel’s post this morning, I understand from a senior coalition source that the two parties have now reached an agreement on how to handle Tuesday’s vote on Labour’s mansion tax motion. The Liberal Democrat leadership has assured their coalition partners that they’ll back a government amendment to it. This amendment will concede that the coalition parties have different views on the issue. The only question now is whether the speaker John Bercow will call it. I suspect that this agreement has been helped by a desire to limit coalition tensions post-Eastleigh and pre-Budget. There is also reluctance on the part of the Liberal Democrats to get dragged into playing Labour’s game.

No matter how bad the economic news, government ministers can always take heart that an attack from Labour will always be blunted by the simple line that 'Labour would borrow more'. It's why David Cameron managed to sail through Prime Minister's Questions last week relatively unscathed even though Ed Miliband chose to make his attack on the loss of the credit rating. It's a problem for the Labour leadership that Edward Carlsson Browne raises today on LabourList, but his argument is that Labour should be honest that it would borrow more as a government. He writes: We are different from the Tories. We would run the economy better. But if we want to convince people of that, they need to trust us. And if we want their trust, we need to tell them what we’d do. Yes, we’d borrow more.

George Osborne was playing historian today as he responded to Ed Balls' urgent question on the credit rating downgrade, charting Labour's role in the UK's loss of the AAA rating; particularly the deficit it bequeathed the Coalition. But he was in revisionist mood when it came to his own stance. As Ed Balls repeatedly leant across the despatch box and tried to hand the Chancellor a copy of the Tory 2010 manifesto in which the party lists 'we will safeguard Britain's credit rating' as the first of its eight benchmarks, George Osborne told MPs that what he had always said was important was the confidence of the markets. MPs were largely in a tribal mood.

The battle-lines over the Welfare Benefits Up-rating Bill — which faces its second reading in the Commons this afternoon — have been drawn. Labour has tied its opposition to the Resolution Foundation's analysis showing that the bulk of the policy will hit working families. As Ed Balls put it last week, 'Two-thirds of people who will be hit by David Cameron and George Osborne’s real terms cuts to tax credits and benefits are in work.' They've labelled the move a 'strivers' tax', a continuation of the divisive rhetoric from both them and the Conservatives that seeks to pit 'hardworking families' against 'people who won't work' (as a recent Tory ad put it).

Ed Balls gave the clearest indication yet today that his party would vote against the government's plans to cap benefit rises to 1 per cent rather than in line with inflation. Speaking at Treasury Questions, the Shadow Chancellor said: 'It's important for members on both sides of the House know the answers to the questions I asked the Chancellor. First of all, 60 per cent of families hit by his tax and benefit changes are in work. And according to the IFS, as a result of the Autumn Statement measures, a working family, the average one earner couple will be £534 a year worse off by 2015, a working family worse off.

Messrs Miliband and Balls performed their pre-autumn statement double act today. If for some inexplicable reason you missed it, the Labour chiefs launched their Q&A with an attack on the government for its decision to cut 50p income tax rate to 45p: 'The Government is about to give an average of £107,500 each to 8,000 people earning over a million a year. Not £40,000, but £107,500. To 8,000 millionaires. David Cameron and George Osborne are giving them this money. But it’s coming from you. 'You are paying the price of their failure and them standing up for the wrong people. David Cameron and George Osborne believe the only way to persuade millionaires to make work harder is to give them more money.