Andrew Marr Show interview transcript

ANDREW MARR:

With so much happening on the world stage in the past couple of weeks, this year’s Budget on Wednesday seems to have crept up without much fanfare, but it is big potatoes, huge decisions affecting us all. The Chancellor says that his Budget is going to be about growth, but the Shadow Chancellor, Ed Balls, says the government’s imperilling the recovery and jeopardising growth. He’s been labelled a ‘deficit denier’ by some people, but he’s with me now. Hello, welcome.

ED BALLS:

Good morning, Andrew.

ANDREW MARR:

We’ve seen some downgrading of the likely growth figures from organisations like the OECD and the IMF, but the Chancellor is getting support from the international organisations for the scale and the timing of these cuts.

ED BALLS:

Well the last two winners of the Nobel Prize for Economics disagree. In the end, it’s about what actually happens to jobs and growth. That is the foundation. And what we’ve seen since last summer – we now have unemployment at a 17 year high, the economy ground to a halt, and the biggest fall in consumer confidence for almost 20 years – that says to me George Osborne’s plan is not working. We’re not getting the jobs and growth we need to get the deficit down and deal with the competitive challenges. And the question for the Budget for George Osborne is what will he actually do to get jobs and growth into our economy? So far we’ve seen precious little.

ANDREW MARR:

On the original Alistair Darling plan for Labour cuts, if you were Chancellor you’d be making cuts of about 14 billion or thereabouts. I’m slightly unclear as to whether that plan still pertains.

ED BALLS:

Our plan was to halve the deficit in four years. George Osborne’s is to eliminate it in four years. That is a massive difference.

ANDREW MARR:

But you would be making 14 billion of cuts?

ED BALLS:

On our halve the deficit plan, we had unemployment falling and borrowing came in 20 billion lower. We could have decided at that point how to use that extra £20 billion. There was nothing preordained about the spending cuts. Yes there would have been cuts to spending, but the most important thing would have been to …

ANDREW MARR:

(over) So you mightn’t be making those spending cuts at all at this stage?

ED BALLS:

Well, look, we would have made cuts – to policing, to schools, to the DLA Gateway. But the issue is would we have had jobs and growth and the economy, which is the foundation? There was nothing preordained about the particular spending path. Halving the deficit was the key issue. George Osborne has accelerated that. Unemployment is going up. Things are getting worse.

ANDREW MARR:

(over) You do sound a little bit like a deficit denier. I mean that’s the phrase that’s used.

ED BALLS:

Well, Andrew, it’s the phrase used by the Conservative Party all the time. It is complete and utter nonsense. We need to get the deficit down. We need some tough decisions. But, as I’ve said to you many times before, if you have not got a plan for jobs and growth and you can’t get the deficit down, you make things worse. A year ago George Osborne came along and said blame the past. The crisis means I’ve got to cut spending now. He said I’ll use the Liberal Democrats as the political shield. The fact is what’s happening in our economy now is because of his decisions to accelerate things, to go too deep and too fast. Unemployment going up, confidence down, things getting worse. Unless you’ve got growth and jobs in the economy – as we’re proposing, an alternative plan – you can’t get the deficit down. It’s not denial. It’s growth denial. That is George Osborne’s position and we must challenge him. That’s my job.

ANDREW MARR:

Your close friend Hazel Blears says on our sister show, The Politics Show, today that you need to be much clearer about where you’d make the cuts. Isn’t she right?

ED BALLS:

Well I agree with Hazel that we have to be clear about our plans – halving the deficit, some difficult decisions on national insurance, on spending here and there. Where I disagree with her is that the biggest clarity needs to be on spending cuts. The biggest clarity needs to be on growth and jobs. That is the foundation. The reason why George Osborne is going to be downgrading his forecast for growth next week, as we expect, is because there isn’t a plan for growth and jobs. More than that, his recklessness, his lack of understanding of what’s actually happening in the economy is imperilling the recovery – unemployment, a lost generation of young people, a 17 year high for unemployment. And getting the deficit down, getting the deficit down is not an economic strategy. Slamming on the brakes won’t work. What we need is a plan to rebuild this economy and deal with the competitive challenges of the future. What do we get from George Osborne? Taking away maternity and paternity rights. That is not an economic policy.

ANDREW MARR:

One of the things that you’ve discussed is the idea of reversing the VAT rise on fuel. But the more one looks at this, the more it does seem that this would actually be illegal under EU law.

ED BALLS:

Well the irony of a Conservative Party saying the reason why they can’t reverse a mistake on VAT is because the European Union won’t stop them on tax policy is almost too much to cope with, Andrew.

ANDREW MARR:

It may be ironic, but it may also be true.

ED BALLS:

In Europe, if you make the argument and you ask, then you can deliver. And what we should have seen on duty and also on VAT is the Treasury should have gone to the European Union and said we got this wrong. We want to reverse it. The VAT going up is compounding the problem of world oil prices. Of course George Osborne should freeze the duty, but he should do more. He should reverse this VAT rise on petrol, which I’ve called for. We didn’t ask for a derogation a couple of years ago because it had never occurred to us anybody would raise VAT on petrol. He’s done it and it was a mistake, and he should ask his finance minister colleagues to reverse this. Stop using these old excuses that Europe won’t let us. What a load of nonsense.

ANDREW MARR:

You haven’t won the public argument on the economy and I think you’ve acknowledged this yourself at the moment. And people do seem still highly sceptical of a policy that doesn’t have a clearer cuts aspect to it, and you seem to be pulling away even from the parts of the cuts programme that were there before.

ED BALLS:

Well, look, of course people are sceptical after the global financial crisis. And it’s your job to be sceptical of me and George Osborne as well, and it will take time for us to rebuild our credibility. But George Osborne cannot hide behind the excuse it was somebody else’s fault. These were his decisions to accelerate deficit reduction. And my credibility will come from making arguments which make sense. We should get the deficit down, but in a steady way, not in a reckless way. We should get the borrowing down, but not try and do it in four years. We should get young people into jobs, we should use the bank bonus tax to boost our economy. And I’ve been saying, as you know, for many months, George Osborne’s plan is bad economics, it won’t work. And it’s looking like I was right and George was wrong and that is where credibility comes from.

ANDREW MARR:

You keep saying that you have a growth plan. But apart from building some more houses, what is it?

ED BALLS:

Well, look, our growth plan first of all is not to halve [sic: eliminate] the deficit in one parliament. That is a massive 40 billion difference. And George Osborne … Look, I understand his politics – he wants to get spending down, cut the state, do it quickly. That may be good politics. It is terrible economics. The biggest difference is on the pace of deficit reduction. There’s also things he could do now even if he doesn’t want to admit economic logic. He could use the bank bonus tax, build some houses, get some construction workers back to work, create some small business jobs, get some young people. We said £600 million to get young people into work immediately. What did George do? He abolished the Future Jobs Fund, he abolished the EMA, he’s cut spending now. It’s so reckless and it is so damaging. And we’ve been here before in the 1980s and the 1930s. It may sound like good short-term politics for a Tory Chancellor, but for the country, the nation, the public interest and our long-term future, this is reckless, dangerous, and I hope on Wednesday he’ll show some humility and say look, it’s not working, I’m getting it wrong, I’m going to change course, I’ll have a plan B for jobs and growth. But I’m not holding my breath, Andrew, and I bet you aren’t either.

ANDREW MARR:

Humility seems to be the word of the day.

ED BALLS:

Humility’s important. If you’re a Chancellor and you get it wrong, you should admit it. And he’s getting it wrong.

ANDREW MARR:

Well we’ll see.

INTERVIEW ENDS

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Posted March 20th, 2011 by Ed's team

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