Balls’ Message Lost in the Noise

Let’s be clear, Ed Balls’ speech to the Fabians on Saturday was categorically not an acceptance of austerity as the solution to the economic mess we are in. So why to so many people, from the horrified Owen Jones to the gleeful Blairites think it was?

Balls’ analysis was classically Keynesian. It was a continuation of the themes he set out at Bloomberg in summer 2010. He knows austerity is wrong and events are proving him correct. I spoke to a technical market analyst on Thursday who assesses trends in the markets and openly admits he has no interest in geopolitical or macroeconomic reasoning for why things happen. He just looks at the facts. And the world is heading for a new, deeper crisis because everyone and everything is “deleveraging”, ie trying to pay off debt, at the same time. Banks, companies, individuals and governments are all sucking money out of the system at once. I suggested therefore that this was a terrible time for governments to be embarking on austerity. He shrugged and said “of course”. The world is grinding to a halt and government austerity, the one thing which could oil the wheels, is in fact making the slowdown much, much worse.

Ed Balls knows this, and what’s more, he said it. He made it very clear in his speech that withdrawing demand now was suicidal. He is in no way suggesting that the Tory approach is right, or that he thinks cuts will boost the economy or cut the deficit.

What he did say, however, is that Labour cannot promise now to reverse the cuts. And he’s saying this from an economic perspective. Come 2015, the damage from austerity will be done. Reversing cuts then won’t help the economy because it would be applying the economic medicine once the patient is dead.

Labour will look for ways to help those hardest hit, but reversing specific spending cuts is basically irrelevant. The new approach will need to be crafted out of whatever mess we are left with in 2015. I agree strongly with many party members that Labour must start now to explain how this new, post-Blair approach to building a fairer country will work. Balls cites a national investment bank and a reevaluation of pay and rewards. It’s a start, but only a start. People are going to be reeling in 2015 and will need a major new vision to rebuild the country. However, this can’t come from taxing the proceeds of growth in the way Blairites seem to think it should.

So while there were gaps in the speech, the basic analysis is not what either camp paint it to be. It’s not a capitulation to ridiculous Tory economic policy and it’s not a return to some mythical Blairite fiscal responsibility (which is both something to copy and apologise for, according to the increasingly incoherent reasoning of some on the right of the party).

How on earth did we get to this point over a practical speech which was tight in its analysis and undramatic in its proposals? Simple. A catastrophic failure of communications. I don’t know anyone who works in the Labour comms team, but I’m sure they are dedicated and hard working. However, somewhere the system is failing so badly it’s come close to splitting the party in two.

Ed Balls was interviewed by the Guardian ahead of the speech and it’s this that caused much of the consternation. This piece does indeed imply that Labour is accepting Tory cuts as the right approach now. It also suggests that we can’t do anything to help people stuck on poor wages suffering from high inflation. Read the speech and the position is much more nuanced. However it doesn’t matter. “Read the speech” I implored people all day on Twitter. “The public won’t” I was told. And those responses are right. The message was already out there and the anger or jubilation was out of the bottle.

So, a sensible and serious speech has managed to create a storm in two ways, neither of which can have been remotely intended. It’s staggering that Labour can fail so badly to manage this message. It doesn’t require “dark arts” or anything so nefarious. It requires clarity, simplicity and a basic grasp of how the media works. You cannot allow there to be the slightest doubt in your message. If you don’t back the current approach, you hammer this home repeatedly. If you are talking about accepting the consequences of cuts (not the cuts themselves), you bloody well say it. Again and again.

People are making huge play of this and it’s turning into a disaster for Labour. And it’s a disaster entirely of our own making. The core message is positive and realistic – austerity is failing and we will need to deal with the consequences. We don’t know how bad the Tories will make it so we don’t know whether we can directly undo the mess.

Labour is hiring executive directors of policy and communications this month. We can only hope that together they will bring some direction, purpose and professionalism to the operation. Ed Balls should be furious that his important analysis has been turned into either a treacherous betrayal of Labour principles or a timely embrace of austerity. And the only people to blame are his own.

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3 Comments

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3 responses to “Balls’ Message Lost in the Noise

  1. Thanks for your thoughts, Greg. I’ll take your word for it about Ed Balls’ core message, but to most of those who don’t engage with politics, or to those who support other parties, the core message will be one of “Labour will keep Tory cuts” which leads to the conclusion “the Tories were right on Labour’s spending.”

    The weekend’s pronouncements from Ed Balls are nothing short of a comms catastrophe for the Labour Party. They confuse Labour’s message about Coalition cuts, and I don’t see how even deploying your eloquent analysis on the doorstep will repair the damage and convince undecided voters between now and the upcoming local elections.

    Would it really be too bad of the Labour leadership to now promise to reverse the most cruel cuts to welfare provision, or to privatisation reforms in health, even if it meant cutting government expenditure elsewhere? I think it would be a start…

  2. Sean O'Hare

    Oh dear Greg you still don’t get it do you? The coalition haven’t made any cuts! It’s all an illusion! The most they have done is reduce the annual rate of increase in government spending and shuffle departmental budgets around a bit, mostly to the detriment of the nation’s defence.

    In theory Keynesian economics could work, i.e. spend now to stimulate the economy and save when you’re in surplus. Only problem is that after two years of following tory spending plans (sort of!) when the balance of payments was looking fairly healthy, Brown suffered a massive brain fart and decided to splurge rather than save for a rainy day. His grandiose splurge could only be paid for by increasing taxes (including hitting my pension scheme!), selling gold, borrowing and printing moneyu. That bastard, egged on by Balls. Not content with that Brown/Balls invented PFI so they could spend our childrens future debts as well.

    Come 2015, the damage from austerity will be done

    The damage has already been done by the last Labour government over 13 long and disasterous years. If you were my age maybe you would appreciate that socialist policies always have the same result, ie. of almost bankrupting us. The last one was particulary bad, and as the coalition are not making the spending cuts that they should be, and are continuing to print money, I fear that we are indeed now bust.

    I do not regard the last Labour Cabinet as evil. Most of them genuinely believed, as you do, in what they did. I make an exception of Blair, Brown and Balls as I think what they did was malevolent. They were eductated well enough to know their policies would ruin the country and they carried on regardless. How could one expect cabinet members like Ed Miliband or postman Pat to appreciate the affect their policies would have? They are both intellectual lightweights in it for the money. I am unsure about Jack Straw, beyond being a career politician, he did occasionally stick his neck out, as did John Reid. I don’t expect many right-wingers to agree with me on that last point.

    However, this can’t come from taxing the proceeds of growth in the way Blairites seem to think it should.

    Absolutely! But if it doesn’t come from taxing the proceeds of growth, where do you suggest it does come from once we have reached our credit limit and the IMF won’t let us have anymore?

    We don’t know how bad the Tories will make it so we don’t know whether we can directly undo the mess

    No we don’t know how bad the Tories will make it, but the suggestion that Labour could improve the situation truely laughable.

    Would it really be too bad of the Labour leadership to now promise to reverse the most cruel cuts to welfare provision, or to privatisation reforms in health, even if it meant cutting government expenditure elsewhere?

    By “cruel cuts in welfare” I guess you mean reducing benefits to a level where it makes getting off one’s arse and going to work more worthwhile? If you reverse them then even more taxpayers money will stolen by the state to fund benefits. There is a limit to how much you can do that. Eventually the wealth makers take flight. á la Atlas Shrugged.

    I think it is far to early to assume that “austerity” is failing. If it does, by the time Labour get back we will not be in a position to spend our way out of it as no one, but no one, will be prepared to lend us any more.

  3. ST

    Greg,

    I think the crux of your piece is correct, but I think the entire Balls interview showed a naivete on the part of the Labour leadership that is concerning for their chances in 2015.

    It is clear for anybody who follows Ed Ball’s pronouncements that he does not accept the government’s rationale for these austerity cuts. That begs the question as to why he said in the Guardian interview that “My starting point is,I am afraid, we are going to have keep all these cuts”. Any fool should have been able to anticipate that the media would interpret that as acceptance of the cuts. He could just as easily have said “as a result of the currrent government’s dangerous, damaging and counterproductive economic policies, it is impossible for me to predict the fiscal position a winning Labour party would inherit in 2015. For that reason it would be irresponsible of me to promise now to reverse this or that specific cut, but I re-emphasise my opposition to the government’s austerity policies and we will continue to fight such policies because we believe they are actually making the problem worse”. This conveys exactly the same sentiment that he was trying to get across, but without antagonising the party’s supporters.

    It seems that the opposition panicked because of the polls and the negativity surrounding Ed Miliband, so decided they had to appear to look tough on fiscal matters, and the entirely predictable backlash has occurred. Whilst I agree that the communications people bear some responsibility, I think Miliband and Balls need to accept that they made a strategic error here.

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