As Caron Lindsay pointed out in her write-up of Nick Clegg’s interview with Andrew Marr yesterday morning, the question of Ed Balls’s record in government compared with Labour’s current policies is likely to become all the more pointed now that Balls is back in an economic role:
There’s no sign of timidity in the Coalition camp at the appointment of Ed Balls as Shadow Chancellor. It’s clear that no opportunity will be lost to remind people of his culpability in the current mess:
[Clegg said to Marr] Labour never owned up to their responsibility. Ed Balls as Minister for the City was lauding light touch regulation. We’re entitled to ask questions over Labour’s record. Who let the housing market become like a casino? Who let bankers gorge themselves on massive bonuses?
Perfectly reasonable questions in my view.
These sorts of points have been making the rounds for a few days, so I thought I’d take a look at Ed Balls’s own words, in this case a speech of his from September 2006 the full transcript of which is up on his website. Here’s a sample:
In my first speech as City Minister at Bloomberg in London, I argued that London’s success has been based on three great strengths – the skills, expertise and flexibility of the workforce; a clear commitment to global, open and competitive markets; and light-touch principle-based regulation…
Most recently in this decade we have been determined to respond to events and new challenges and enhance London’s global standing and light touch regulation…
Today our system of light-touch and risk-based regulation is regularly cited – alongside the City’s internationalism and the skills of those who work here – as one of our chief attractions. It has provided us with a huge competitive advantage and is regarded as the best in the world…
The Government’s interest in this area is specific and clear: to safeguard the light touch and proportionate regulatory regime that has made London a magnet for international business…
We must ensure that all new regulations are implemented in a sensitive and light touch manner…
And not to mention:
[The Labour government] will outlaw the imposition of any rules that might endanger the light touch, risk based regulatory regime that underpins London’s success.
This speech was not a rare exception but was part of a consistent pattern of rhetoric and (in)action. Somehow I don’t think Ed Balls will be talking up his own record too much in his new job…
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30 Comments
You can be sure the media won’t be referring back to these speeches as they become increasingly anti coalition.
Balls on Labour regulation: “Of course we did not get everything right. We should have ignored Tory and City claims that we were being too tough on financial regulation and been much tougher still.”
http://www.independent.co.uk/news/uk/politics/balls-under-fire-for-soft-touch-with-the-banks-2192448.html
So it was the Tories’ fault that Labour didn’t regulate the banks properly during their time in office. Got that?
The public and the media are going to lap up everything Balls sells them. Because Balls is an talented politician: he can tell people exactly what they want to hear, however remotely connected to reality that is.
This is OK to a point, but this sort of ‘negative’ campaign has very real limits.
‘Who let the housing market become like a casino?’
The Conservative government at the time of the Right to Buy and, significantly, the 1989 Rent Act. And the public who decided to sell their £50k flats for a quarter of a million. If the Coalition would like to take on those who oppose house-building, this complaint might have more credibility, as it stands the Big Society may well ensure that no houses are built ever again. I don’t remember any Lib Dem or Conservative opposition saying that they would actively seek to reduce house-prices.
‘Who let bankers gorge themselves on massive bonuses?’
The remuneration committees of private banks, and thier shareholders. And, of course, the Coalition has not altogether had much success in reigning in bonuses it would appear, despite inheriting favourable circumstances for reigning in pay, given the ownership of some banks.
This whole, ‘it’s all Labour’s fault,’ line has real limitations, not least that they make it look (rightly or wrongly) as if the Coalition has no positive record, it makes it look like the parties are more interested in opposing with hindsight, rather than governing.
I would agree with Jim Wright, a lot of people seem to me to be very seriously under-stating the threat posed by Ed Balls.
And all this by the way is before we get to questions about how far we abrogate individual banks for their responsibility – that the regulatory regime may or may not have been too light does not somehow justify some of the practices in banks does it?
But this does not need to be played as a Coalition against Balls approach. The way to highlight this is to show when the Lib Dems were calling for tighter regulation. The Tories were still in line with Labour at this point, to join them in pretending they knew better will not ring true and will be able to be easily rebutted.
I’m not sure what the position of Cable et al was in September 2006, but if there was clear water between the Lib Dems and the others this is what should be highlighted. This can then be followed up with details regarding wehat regulation was proposed and how it would have impacted the financial crisis.
I’ve said many times on here that the public are wising up to the falicy that Labour are responsible for all the economic woes. The stupid thing there is no need to spin and exagerate. They are responsible for a big enough amount of it, that can be proven would not have existed had Lib Dem advice been followed, to make a genuine case.
“So it was the Tories’ fault that Labour didn’t regulate the banks properly during their time in office. Got that?”
No but they, unlike the Lib Dems, were not warning of the risks early enough to be taken seriously.
This has got to be an issue where the Party can prove difference….
This may help re-establish Vince Cable’s tarnished image.
@Steve: I agree totally about holding Tories to account for failure of opposition with regard to regulation, and that our party has a better story here.
On the “fallacy that Labour are responsible for all the economic woes”: but this omits most of the story. They want us to believe not only that, but the whole charade:
a) the “good times” (the last decade, a credit bubble) were the result of good Labour policy
b) the “bad times” (credit crisis) was somebody else’s fault (bankers, Americans, capitalists, whatever)
c) the “good times” could continue even today under Labour policy (deferring cuts)
This is the picture that Balls will paint for us and we need to have a credible response to it.
@Jim Wright
“On the “fallacy that Labour are responsible for all the economic woes”: but this omits most of the story. They want us to believe not only that, but the whole charade:”
This is the problem I’m raising. They are responsible for a significant amount of our problems, but by attempting to blame them for everything they get away will most of it. Until a facts based approach is used to attack them they will be able to deny resposibility for the bits they are responsible for. The spin of election politics needs to move on to building a credible, evidence based decimation of Labour’s economic management. That is the level of argument that will stand the test of time and still be effective in 2015.
LibDems really do suffer from selective memory loss – have they forgotten Vince Cable and his support for light-touch banking regulation in the Commons in Labour’s Financial Services and Markets Bill which established the Financial Services Authority.
Cable stated: ‘“I want to express broad support for the bill, whose philosophy and whose architecture of financial regulation reflect a broad consensus.”
The New Statesman also carried Cable’s comment: ‘”No one is arguing for an increasingly severe, more onerous and dirigiste system of regulation.” Any regulation, he said, should be “done on a light-touch basis”.
Btw Osborne was doing the same – so hard to see how they can isolate Balls on this issue.
For more detail see: http://www.leftfootforward.org/2011/01/lib-dem-tory-labour-all-in-this-together-on-financial-regulation/ and it’s worth also reading the comments to the article.
Oh noticed another little gem on a LibDem website – see below. Why am I not surprised at the failure of LibDem ‘new politics’ because such a concept has to be based on honesty and truth and not continual twisting and spinning of words to suit a political position.
Dispelling any doubts about where he stood, Osborne said in March 2007 in a speech to British Venture Capitalists: “We need a change of direction from Government, tax reform to move towards simpler, lower taxes (and) reducing the burden of regulation.”
http://wantagelibdems.org.uk/en/article/2009/129836/the-labour-conservative-consensus-on-light-touch-regulation-has-failed-us
This may help re-establish Vince Cable’s tarnished image.
Yes, there is a big opportunity here for Vince if he takes it (and the media give him a fair ride).
@MBoy
Vince can’t be saved by the media – the only one who can do that is Cameron and two words come to mind on that possibility: Snowball – Hell. It suits Clegg anyway to get rid of him as he may just have formed a centre of resistance to the Tory right-wing policies now adopted by the LibDems. Sadly the nuke turned out to be no more than a damp squib.
But as I have shown in an earlier post – Vince was all for light-touch regulation so what hope of salvation there? Has he changed his mind?
Historically, the problem with Oracles is the volume of outpourings from them and also the fact that different people can take different meanings from the output which is often impenetrable in any case.
Vince has gone and there will be no like-for-like replacement. To be fair I think he was past his intellectual best but it would have been nice to see him go with a little dignity.
BTW – instead of looking back with the continual blame being heaped on Labour I would suggest that you all tune into the CBI chief’s blast at coalition economic policy.
So instead of looking backwards you should be looking at the damage that this Tory government is doing right now – and you are supporting this Tory ideology.
Don’t take my word for it but listen to the CBI boss – no doubt you’ll say he’s just a Labour Party stooge to try and cover-up the weaknesses in your economic policy.
If you have any concern for ordinary people in this country you have got to break-free from this economic stranglehold the Tories have got on you. I don’t mind if you keep blaming Labour because ordinary people ain’t listening to your excuses and it appears that top levels in industry aren’t impressed either.
There was a broad political consensus in favour of light touch regulation up until 2007 when we saw the consequences of that. That consensus was because all 3 party leaders believed in neoliberalism. John Gray writes about it in his review of Gordan Brown’s book; http://www.newstatesman.com/books/2010/12/brown-crisis-crash-world
Vince points out that his record compares favourably with Labour’s because he opposed the demutualisation of the building societies, and of course it is interesting to compare the record of Nationwide with that of Northern Rock.
However it is worth asking that if light touch regulation failed in the City of London in 2007, then should we be more cautious of the current penchant for deregulation in general? Recent reports in relation to the Gulf of Mexico oil spill describe similar failures of light touch regulation.
On top of all this we should be aware that it is those who are being regulated who actively lobby against it. It was the chairman of Ryan Air who was recently complaining against the “securacrats” who regulate safety from terrorism in the airline business. Prior to 911 there was no security checks for internal flights in the US because that is what the airline industry lobbied for.
We all need to be a lot more sceptical of lobbying from the private sector.
@Geoffrey Payne
“There was a broad political consensus in favour of light touch regulation up until 2007 when we saw the consequences of that.”
This means that to build a credible position against Labour the Lib Dems need to concentrate on the period after the consensus ended. Perhaps therefore Mark is wrong to quote Balls from 2006 but should look further ahead. If, and it appears EcoJon has found the “Smoking Gun”, Vince Cable was supportive of Government strategy at this time it becomes a plague on both (or in this case all three) houses.
My recollection (and I accept this may be proven wrong) is that the Lib Dems were the party to first warn regarding the financial problems and therefore it is here I believe the gain is to be made. I have said before this should not be about appearing whiter than white, more about demonstrating that the Country would have been in a better place had Cable’s plans been followed post 2007.
EcoJon… in practice “this Tory ideology” is little removed from what Darling would be doing if he were still chancellor. The big gamble the government has made is in presentation: presenting the cuts as savage yet claiming to shield as many special interests as possible; and I agree totally that the “blame it all on Labour” political strategy is both stupid and wrong. It makes it a choice between Balls saying “good times should go on” or the guy saying “bad times are here, but it’s not our fault”.
Reality is more subtle than this. There are no easy options, but a 11% real-terms spending cut over 5 years is not particularly savage. People talk about the government’s huge gamble in making cuts, as if it would not be a huge gamble to rely on the continued goodwill of the bond markets by attempting a slower fiscal retrenchment.
Steve, if you read further down I do point out the Vince Cable was opposed to the demutualisation of the building societies. In addition he was the first to propose that Northern Rock be nationalised whilst Labour was dithering.
So Vince comes out of this well compared to the others. However as the quotations above show, he was also caught out by the crises.
@Geoffrey Payne
“Steve, if you read further down I do point out the Vince Cable was opposed to the demutualisation of the building societies. In addition he was the first to propose that Northern Rock be nationalised whilst Labour was dithering.”
I’m not sure that demutualisation is really the big issue and with Northern Rock Labour saw nationalisation as an only when neccesary option where Vince saw it as a best option in the curcumstances. The real ditherers were the Tories at the time who refused to give an option at all. The way either argument could work would be if there was a demonstration as to how much following the advice would have reduced either the defecit or the debt by.
The danger is that if quoting Balls (in more ways than one!) in order to show he was wrong on regulation than there should be a quote from Cable from the same period disagreeing. Otherwise it doesn’t prove that the Lib Dems would have done any different. What’s needed is a provable narrative showing at what the difference would be. It’s too easy to just blame Labour for everything and people see through it.
That fact that EcoJon was able to provide links to Cable more or less agreeing on regulation within a few hours show how easily the arguments can be dismissed unless they are factually based.
@Jim Wright
There is no argument that Labour would have been making deep and unpopular cuts as well. But I don’t believe that the bond market is that naieve as to be taken in and have its computation of yields to be affected by ‘tough’ talking/presentation of the cuts but rather to be influenced by the actualite.
I honestly believe this does boil down to differing views of the National Interest held by Labour and the Tories. Labour may have lost its way in the economic policies it adopted under New Labour but I think the majority of the party membership actually retained its ‘soul’. In a way it’s quite interesting to compare what’s happening in the current LibDem party membership from what I can divine as an outsider.
Demutualisation of the building societies is another interesting one – I seem to remember voting on a couple and I thought that all of the proposals were put to a vote of members. So whether the move was good or bad in a broader economic/financial sense is a bit academic when the ‘owners’ have made a no doubt profit-driven majority decision to sell. We go back as well to the sell-off of the public utilities – once a government makes that decision there’s very few people who won’t take the opportunity to turn a quick buck.
I keep hearing what is said about the warnings that were issued by the LibDems about the economy – it really is now of little importance to anyone when this was done – really it isn’t. I remember my granny – long gone I’m afraid – when I got my first job drilling it into me the evils of debt and the virtue of saving and deferred consumption. It has stayed with me all of my life and I have always tried to live by it and the only time I got into trouble was when I strayed from the advice.
I refuse to believe that people didn’t know they were living in a fool’s paradise as the bubble overheated – as it always does – and then burst as it always does. But it’s a symptom of modern life – people want it all NOW – they don’t want to wait. I think these societal changes make any government’s position potentially very difficult as I am not sure how much the attitude can actually be reversed.
However back to what a Labour Government would have actually done if in power – I would like to think it would have protected the weaker and poorer sections of society better than the Tories and LibDems have done because of the way its perceives the National Interest.
I also do believe there is a real absence of a strong and robust growth strategy in the coalition economic policies.
Sadly, no matter the government, by the time the effects of policy errors become apparent and changes of direction are required then the economic situation has often moved on even further and sometimes in a different direction and the altered responses to the problem may no longer actually be applicable but the messages are often garbled by conflicting smoke-signals.
@ EcoJon
To have a Labour supporter lecture Lib Dems about selective memory loss is truly ironic, considering the outright state of denial you and other Labourites are in over its role on the deficit and lax banking rules.
“BTW – instead of looking back with the continual blame being heaped on Labour I would suggest that you all tune into the CBI chief’s blast at coalition economic policy”, you say.
OK, let’s quote from the CBI speech then:
“..the tax and spending policies of the last Government created a substantial structural deficit – a hole in the budget that had to be tackled irrespective of what happened to the economic cycle. That’s what made substantial spending cuts inevitable, irrespective of who won the last election.”
To summarise: IT IS LABOUR’S FAULT.
You don’t have a leg to stand on, so why should we listen to you?
@EcoJon – It’s not Labours fault
@Robert C – It’s not Labours fault
You’re both wrong although Robert C is probably closest. Labour bear responsibility for a substantial part of our economic problems but not all. If the Lib Dems keep following the line that it is all Labours fault then they will lose public opinion as it is clearly wrong. Instead show the specific problems Labour caused, show what should have been done differently and then the argument is won. It won’t show it is all Labour’s fault but it will force them to accept their responsibility.
So the Economy has contracted by 0.5% of GDP, Unemployment is up, Inflation is at 3.7 %
The head of the CBI warns the government lacks vision and it’s politically motivated initiatives were damaging, He also warned against the dangers of not having initiatives supporting private sector growth
Who are the coalition going to blame for this one?
@matt
Labour of course 🙂
Just how many times can George Osborne say bad weather, coldest December for 100 years what a load of old tosh.
Yes some parts of the country where hit by some pretty large Snow Falls for a couple of weeks, but that is not the reason for these figures.
Yes most of the cuts have not been introduced yet, However, Businesses had already started to make redundancies,
People knew that we where in for a rough times ahead, which effected consumer confidence, households are already making cut backs, preparing themselves, People are less willing to get into more debt, so where less inclined to hit their credit cards and over drafts over Christmas.
To blame this entirely on a couple of weeks of Snow, in some parts of the country, is ridiculous and a government that is totally in denial 😉 Ironic isn’t it.
The Guardian reports today that City experts had expected GDP to grow by anything from 0.1% and 0.7% – with last month’s weather making predictions harder. George Buckley of Deutsche Bank said today’s 0.5% decline was “quite shocking”, and questioned whether the snow could really be blamed for the drop in economic activity. Hetal Mehta said it was “an absolute disaster for the economy”. “It seems that the economy is incredibly vulnerable, and with the fiscal tightening yet to fully bite, we will have to brace ourselves for a bumpy ride,” Mehta said.
Still Labour’s fault??
What was it Vince Cable was saying about the Deficit reduction plan and the need for flexibility?
Oh yes, he always said, The speed and nature of the cuts, must always be flexible and able to react to changing conditions.
I wonder if he will stick to that opinion, now that the Economy has shrank again?
It certainly is not a view shared by Gideon Osborne.
When do we get the news on the those Bankers Bonuses 😉
The LibDems should start to prepare for a GE which will happen sooner than later instead of looking backwards and spouting the Tory mantras – it’s all Labour’s fault. The Tories will shaft you as soon as is politically expedient for them.
@Robert C
Calm down Robert and let’s be rational about this and reduce the ‘personal’ level of attack you have resorted to. I was pointing out that identifying Labour and in particular Ed Ball as being the chief architect of ‘light-touch’ banking regulation was quite simply wrong and I provided cited examples to back-up my contention. In any case this kind of decision was above Ed’s pay-grade although I fully accept he would have been involved in policy formulation and discussions.
I resigned from Labour when TB became leader not just on personal issues but because I deeply disagreed with the whole New Labour programme and its economic direction and always believed it would end in tears and damage to our own people – I don’t believe in light regulation for any sector stuffed-full of Tory spivs – I would have tightened regulatory control till their blue braces popped.
I would also advise Robert that you look at any speech or piece of analysis in its entirety and not just do a Forrest Gump and pick out the ‘sweet’ bits that you like.
But taking the bit you have quoted to bolster your position, I agree with that bit of the speech 100 per c ent. I think it must be remembered that there are reasons as to why the deficit shot-up because of the ‘social’ decisions that Labour took such as saving savers’ deposits, keeping people in work and in their homes.
It is also a fact that from Milliband down Labour has admitted making mistakes so no one is in denial in my camp.
People make their own mind up whether they wish to listen to me or not – I am entitled to express opinions here and it is up to others whether they agree or disagree and respond or ignore.
However let me remind you what I stated: ‘I also do believe there is a real absence of a strong and robust growth strategy in the coalition economic policies.’ CBI boss agreed with that as have today’s negative growth figure and shortly just about every non-Tory economist in the country will be agreeing with me – move over Vince there is a new oracle on the block. I should point out that CBI Boss said Vince’s department was a ‘talking-shop’ and sadly it seems an accurate description.
However, I will reiterate that I want to see the survival of a strong centre/centre left LibDem party as I personally believe it important to our broader Parliamentary Democracy and it’s also important that the LibDems provides a voice for reason and individual rights and liberties when it is so easy to lose them in the deep and dirty trenches of governing the UK. That’s not an excuse for any Labour faults that have been made because all governments make faults and that will never alter.
@Steve Way
I really think that you might consider re-reading my piece as I don’t actually say that it wasn’t Labour’s fault and indeed fully accept that the deficit would have to have been tackled by painful cuts. Milliband and other leading labour figures have accepted that errors were made, as have I, although I stress the caveat that some of the reasons – mentioned above – escalated the deficit because of the inherent social aims which I have no doubt a Tory government would not have emulated and thus produced a lower deficit with savers slaughtered, more home repossessions and higher unemployment – as I often argue National Interest can mean differnt things to different parties.
@Matt who asked ‘When do we get the news on the those Bankers Bonuses/
Relax matt they’re all going to get cocopops or so they would have us believe – of yea – let’s see what they transform the cocopops into if public scrutiny declines.
@Steve You’re both wrong although Robert C is probably closest. Labour bear responsibility for a substantial part of our economic problems but not all
The problem was caused by bankers greed which started in the states. True the labour party could have regulated the banks over here but I can’t recall the tories telling them to stop. The mess we are in is a direct result from that and may have been a lot worse if labour hadn’t have responded in the way they did. This is the fact of the matter. I think labour did a lot of wrong things – like the illegal war in Iraq and then going into Afghanistan but I am really getting sick and tired of a social construction which is based on turning us against labour rather than spreading the truth
I am a liberal democracy – The Tories are my real enemy because I care about people and don’t buy the lies peddled to support policy intended to make the rich richer.