Ed Balls: 'If Ed and I have a problem, we sort it out between us'
The Shadow Chancellor tells Steve Richards and Andrew Grice that everything is rosy with his boss – and puts out feelers to Vince Cable
Established as one of the most influential political commentators in the country, Steve Richards became The Independent’s chief political commentator in 2000 having been political editor of the New Statesman. He presents Radio 4’s Week in Westminster.
Thursday 06 September 2012
Looking tanned and refreshed, Ed Balls strides into his Commons office and expresses an uncharacteristic degree of bewilderment. The sofa in his spacious room seems to have disappeared to be replaced by two armchairs. Then he wonders fleetingly whether there was a sofa in the first place. Leaving the mystery hanging in the air Balls focuses with greater precision on the issue that surfaced during the summer break and has not gone away: his relationship with Ed Miliband.
He also uses his first interview of the new political season to signal that a Labour government would not impose the temporary wealth tax floated by Nick Clegg but might well bring in a permanent tax on high-value properties to safeguard the NHS. There have been reports of seething tensions between the "two Eds" over policy and Balls' apparent rudeness towards Miliband in Shadow Cabinet meetings. His version is expansive and unequivocal.
"I came back from holiday and discovered while Ed was also on holiday we are having this big dispute. It was more laughable than concerning. I got back on Sunday and we spent an hour and a half together three days running, talking about what we are doing and where we are going and we spent very little time talking about these stories because they are complete and utter, total garbage."
The Shadow Chancellor dismisses the stories by placing their complex relationship in a much wider context –the now openly-admitted running battle between the two Eds' former bosses Gordon Brown and Tony Blair. "We are two of the people who in the last Government were trying to fix problems with Alastair Campbell and others. We have learnt from all those problems. The reality with me and Ed is that if there's a problem we sort it out between us because we have the sort of relationship where we can sit down in a room and resolve it and that's how it will be. If there's anyone – whether its Conservatives… or any other noises offs who think their briefings can become a self-fulfilling prophecy by inventing this kind of stuff – we will prove them totally and utterly wrong."
One allegation, that presumably came from within the Shadow Cabinet, is that Balls ostentatiously consults his BlackBerry while Miliband speaks at length to his frontbench team. Balls jokes about the habit and suggests he is by no means the most addicted to the device. "I was the first person who informed the Leader of Opposition during a Shadow Cabinet meeting a year or so ago about the forthcoming Royal Wedding. All of us are a bit guilty of using our BlackBerry but Yvette [Cooper, Balls' wife] said to me: 'Me and Douglas [Alexander, Shadow Foreign Secretary] are far worse than you!' "
In terms of substance the summer reports suggested there was disagreement between the two Eds over whether to propose a unilateral or EU-wide financial transaction tax, the so -called Tobin tax. "There is zero disagreement. We want a transaction tax and we think that Cameron and Osborne have been useless in pursuing this but if it were implemented only at the level of the EU it would not work without the US involved. It would only shift business to the US and elsewhere".
Similarly on support for proposals outlined by the Vickers commission on separating the retail and investment division of banks, Balls is adamant that the two men think along the same lines. "There is no argument or row…neither Ed nor I are being soft on bank regulation… the changes are necessary, vital and are tough but they must be delivered."
It tends to be a bumpy journey for Labour Shadow Chancellors, who are under huge pressure to devise economic policies that are credible, fair and deliver the cash for improved public services. Although he has been vindicated in his early unfashionable claim that George Osborne's austerity agenda would stifle growth, he is being rigidly strict with his Shadow Cabinet colleagues over what they can say about future spending.
"My job is to make absolutely clear with the Shadow Cabinet, the party and the country that we are not going to make promises that we can't meet. We don't know what the situation will be in 2015". This is a constant theme. Policy detail must wait given the unpredictability of the next three years.
So is his message that Labour cannot make additional spending commitments in the current climate? "That is 100 per cent right. The idea we would enhance our credibility by making a promise and say we don't know how we will pay for it. People will say: Where is the money coming from?"
But Balls hints at one way in which he might raise some additional cash. He speaks positively about the mansion tax on homes worth more than £2m being pushed by Vince Cable, the Lib Dem Business Secretary.
"I have thought a lot about it... I'm open to new ways of making our economy strong which requires investment in skills and universities and for the NHS," he says. He rejects wholly the notion contemplated by the Coalition that a mansion tax could be introduced as a trade-off for cuts in the top rate of income tax, but regards the left-leaning Cable as a potential ally.
"The person thinking seriously about this was not Nick Clegg but Vince Cable. I feel for Vince and the extent of his frustration [with the Coalition]…but if he wants to channel those frustrations into discussions about how we can achieve growth and jobs in the future I'll start discussions with him tomorrow".
Today Miliband and Balls speak at a special conference on economic policy. Balls describes it as one of several "stepping stones" towards the next election, in which they seek to frame and win the "intellectual" as well as the political debate. More Labour policy detail will come next year, as Labour combines Miliband's "responsible capitalism" agenda with the party's traditional goal of redistributing wealth. "We need to look at the rules that govern competition, corporate governance. They need work in a long- term way. But for a route to a fairer society the minimum wage and tax credits are essential."
Whether the "two Eds" succeed in navigating the "stepping stones" together is one of the biggest questions in British politics. For sure, they are fully aware of the fatal consequences if they fail to do so.
Taxing the rich: Proposals so far
Mansion tax Liberal Democrats are still pushing their idea of an annual levy on £2m+ properties. George Osborne has not ruled it out, but David Cameron is hostile. Next Labour manifesto could include a variation.
Assets tax Lib Dems have floated idea of 0.5 per cent levy on assets including pension funds and investments for limited period. Tories and Labour are opposed.
Inheritance tax Some Lib Dems favour shifting death duties from the deceased's estate to the people inheriting. Seen as politically difficult by Tories and Labour.
Land value tax One option is a "location value tax" based on a higher council tax band on £1m+ homes. Tories wary. Labour may be interested.
Pensions Lib Dems favour restricting the 40 per cent tax relief on pension contributions enjoyed by higher rate taxpayers to the 20 per cent basic rate. Tories oppose. Labour wary as it could be a vote-loser.
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