Ed Balls will lay out the path to the failure of the next Labour government today. According to the FT:
Ed Balls, shadow chancellor, will try to boost Labour’s poor ratings on the economy on Monday with a promise to show “iron discipline” with the public finances and a warning to his party that big spending cuts lie ahead.
In a pivotal speech, Mr Balls will start sketching out for the first time what Labour would do in power, including a warning to shadow ministers: “We will have to govern with much less money around.”
This is deeply disappointing.
I've said it before, and I'll say it again: there are only 4 ways to get an economy to full employment (which I consider to be the only goal Labour should have). They are to increase consumer spending, net exports, business investment or government spending. That is it. Nothing else can work.
The first three are not going to increase. Consumers lack confidence; our export markets are in crisis; business is sitting on its cash because consumers aren't spending and nor is government. That means government must spend to restore balance in the economy - and it can. If only QE was spent into the real economy instead of being splashed on the City as at present we could restore balance to the UK - especially is we were selective and careful about how it was spent. We do not need a consumer boom: we need investment.
But Balls is not promising that. He's promising cuts. And that's a recipe for disaster, for the country, to all who live here, for Labour and for democratic choice.