Balls secures his prize in Shadow Cabinet revamp


Sean O'Grady@_seanogrady
Friday 21 January 2011 01:00
Ed Balls will replace Alan Johnson as Shadow Chancellor
Ed Balls will replace Alan Johnson as Shadow Chancellor

The good news for the Labour Party is that they've got themselves a new, combative, economically literate shadow Chancellor, a man who was put on God's good green earth to make George Osborne's life intolerable. "Attack Dog" is a terrible cliché, but it fits Balls's bull mastiff-like demeanour. He will pursue his mission with all the monomaniacal zeal that his mentor, Gordon Brown, brought to the task of harrying the confidence out of successive Tory chancellors in the 1990s.

Mr Balls, 43, is a man of detail, the man who infamously inserted the phrase "neo-classical endogenous growth theory" into the speeches of the then-shadow Chancellor Brown, and, in turn, exposed them both to the mockery lavished on them by Michael Heseltine – "So there you have it. The final proof. Labour's brand-new, shining, modernist economic dream. But it wasn't Brown's. It was Balls."

As a former economics writer on the Financial Times with a grounding in the dismal science gained at Oxford and Harvard, there aren't many people around Westminster who know their economics better than Mr Balls. He is famous for inventing – in the back of a taxi – the five economic tests that determined whether the UK should join the euro, and much of his political career has been concerned with economic affairs – adviser to Brown, chief economic adviser at the Treasury, minister for the City.

His personal life has also been politically driven: he married Yvette Cooper in 1998, who also studied economics at Oxford and Harvard, was an economics correspondent for The Independent, and went on to serve as a Treasury minister. She is almost a female clone of the new shadow Chancellor, Balls without balls, you might say, and was an outside choice for shadow Chancellor. One wonders, with slight trepidation, whether any of their three offspring have displayed any precocious interest in economics.

In terms of economic background and depth, Mr Balls is probably better prepared than anyone in a Treasury brief on either front bench since Nigel Lawson. (That's a compliment.)

The bad news is that his policies are problematic. They are more "Keynesian" than those of Alan Johnson or Alistair Darling.

Balls, in his "Bloomberg Speech", delivered during his Labour leadership campaign, put the case strongly for cutting the deficit more slowly than even Mr Darling's last published plans. So Mr Osborne and the Treasury Secretary Danny Alexander will continually ask of Mr Balls: "Well, what would you cut?" They will also ask precisely how much bigger a deficit he would like to run, and what the effects on sterling and the UK's credit rating might be. Mr Balls will argue that the cuts take risks with the recovery and the UK is nothing like Greece or Ireland.

"Economic policy is unchanged," claimed Mr Miliband yesterday. Maybe not for much longer. Old hands may wonder whether the same tensions that disfigured the relationship between Neil Kinnock as leader and John Smith as shadow Chancellor before the 1992 election will be visited upon Labour again.

Or worse. After all, Ed Miliband had the chance to give Mr Balls the economics brief months ago. There were reasons for not doing so, not least that Mr Balls will want to run economic policy as a fiefdom – uncomfortably reminiscent of the Blair-Brown rivalry.

Mr Balls's other problem is that he is so identified with the ancient regime, the one that got 29 per cent of the vote at the last election. If Labour feels the need to move away from the last government's record and admit "mistakes" then the man at the heart of policy making from May 1997 to May 2010 may not be in the best position to renounce the decisions he helped frame. Unlike Mr Johnson, Mr Balls has form.

Mr Balls's speaking style is also quite flat, adding to the nerdiness of Labour's top team.

So then: not quite a year in office, and not quite 40 years of age, George Osborne has seen off two Labour shadow Chancellors – Alistair Darling and Alan Johnson – plus, arguably, a Lib Dem one too, Vince Cable.

How long will Ed Balls last? Rather longer is the suspicion. He will be on George's case 24/7 and the Chancellor will be lucky to get another weekend off for as long as their "partnership" lasts. It should be entertaining, these two leaders-in-waiting, head-to-head. One might look forward to Treasury questions – not something you could always say.

Shadow Home Secretary: Premium job for a womanof firsts

Yvette Cooper might have hoped it would be her, rather than her husband, asked to take on the shadow chancellorship. Instead, she gets his Home Office brief. The role is less prestigious than her previous, shadow Foreign Secretary, but politically it is more important as Labour tries to exploit Coalition weaknesses over police numbers, control orders and illegal immigration.

Cooper is a woman of firsts: first-class degree, first minister to take maternity leave, first female chief secretary to the Treasury, and with this appointment, the first woman to shadow another woman, Theresa May.

Oliver Wright

Shadow Foreign Secretary: New mission for a son of the manse

A son of the manse, like his mentor Gordon Brown, "Wee" Douglas Alexander grew up delivering Christian Aid leaflets to his Scottish neighbours before graduating to Labour tracts. International Development Secretary until the last election, he has also served as Europe minister, so knows his new brief as shadow Foreign Secretary.

Although he did not support Ed Miliband for the leadership, the two, along with Ed Balls, made up the triumvirate around Brown before Labour lost power. He hopes that he and Brown's two other "musketeers" do enough to become the three most important people in government in 2015.

Oliver Wright

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