Andrew Marr Show interview transcript

Andrew Marr: Before we turn directly to the Autumn Statement, let’s just talk about Wednesday’s strike. Is this something that you would urge the unions to call off even at this last hour?

Ed Balls: I would urge the government to get round the table, give some ground and sort this out. It is terrible that we are going to have a strike on Wednesday. I don’t think anybody wants it. It will be hugely disruptive for families, for businesses. But I also have sympathy for those low-paid public sector workers who are seeing their contributions go up and their pensions cut. We are talking here about dinner ladies, teaching assistants, paid under £15,000 who are being hit really, really hard. The government has got to give some ground. So have the unions. There has to be a deal. It takes both sides to sort this out.

AM: It’s probably fair to say that you have more influence on the union side than on the government. They are more likely to listen to you. So would you urge the union to give enough ground and perhaps delay this or call it off?

EB: I would urge the union leaders to say we’ll give ground and we’ll talk. I think Ed Miliband was right in June to say that it was the wrong thing to do to be striking in June when the government was still talking. But they [the government] made clear two weeks ago that they were going to give no more ground. Even John Hutton has said this is very risky, the three per cent rise in contributions. It is also deeply unfair and in these circumstances there are loads of very low paid workers, three quarters of a million paid under £15,000 predominantly women who are going to be retiring on pensions of £3,000 or £4,000 a year – not a month, a year – who are going to be hit really, really hard and I think people don’t think that’s fair. The government should give some ground. I have to say, I think David Cameron and George Osborne have always been clear in their mind that they wanted this confrontation.

AM: Both sides are quite close to agreement in different areas. There are unions and employers in different government departments not so far apart and coming together. A lot of people would say it’s inevitable, any government, a Labour government, would end up having to deal with the cost of public sector pensions. It was always going to be painful but there has to be a compromise and having a strike like this doesn’t help.

EB: A Labour prime minister would have had to sit down and negotiate. The trade unions would have had to have given some ground. But David Cameron said a few weeks ago to the Daily Telegraph he was privately delighted the trade unions had walked into his trap. No Labour prime minister in the last 13 years ever sat around saying ‘I’m privately delighted at strikes and confrontation’. I think that is deeply, deeply irresponsible and the disruption on Wednesday to many families and businesses with whom I have got great sympathy could be avoided if David Cameron decided he wants to act and he hasn’t. His intransigence and his opposition to progress are causing the problem here.

AM: Let me put a proposition to you about the Autumn Statement and the argument around it. If you look at a lot of the things that the government has recently announced and looks likely to announce, they are not so different to the kind of things that Labour would be doing, when it comes to youth unemployment, when it comes to struggling small and medium-sized firms, when it comes to helping commuters. When people look at the exchanges in the House of Commons with all this finger-stabbing and shouting and so on, actually things are now too serious for that and it would be welcome to have the opposition saying, ‘do you know what? On all of these measures, we are with them, we agree and we are going to help them get them through the House of Commons quickly’.

EB:                  I would love a consensus on the way forward with George Osborne, David Cameron and the Liberal Democrats. I would love it and I think it would be better for Britain. And you are completely right: Nick Clegg now is announcing the reintroduction of the Future Jobs Fund in a rather smaller form, which should never have been abolished in the first place by the government. They are now saying let’s put back 10 per cent of the housing spending they cut. They are now saying let’s put back some infrastructure, let’s do more for small firms lending, building on something Labour did which they should have done earlier. But fundamentally, Andrew, there is a bigger issue here which is that George Osborne and David Cameron said a year and a half ago, and we disagreed, they said if we go faster on deficit reduction – £40 billion more cuts, fastest cuts of any country – they said it would lead to private sector jobs, to growth, to confidence, to falling unemployment but it hasn’t worked.

AM: Clearly, we are in economic troubles at the moment.

EB: Of the government’s own making.

AM: If their deficit reduction system hasn’t worked, why is it that the British government is able to borrow money at four and a half per cent or five per cent below what it is costing the Spanish and the Italians and others? Britain has a triple A rating and gilts are going at a very good price. Our international reputation seems to be pretty strong and the government would say that is down to our deficit reduction plan and it is sticking to it.

EB: Well it would and that has been the fantasy they have peddled for the last year. Let’s take these points in turn. First of all, they say we have low interest rates because of deficit reduction even though fundamentally it’s because we are not in the euro and because we have very low growth. America in August had its credit rating downgraded and its interest rates didn’t go up, they went down too because America is not growing. Secondly, they say that we have got credibility with the financial markets because they have got a deficit reduction plan. But George Osborne is going to borrow billions and billions of pounds more than he planned. Why? Because unemployment is going up because his plan has failed.

AM: And the truth is the difference between you is now infinitesimally small. It’s a third of one per cent. You would be doing much the same, if you are still sticking to Alistair Darling’s original plan. You still are?

EB: Yes of course.

AM: If you are sticking to that plan then the difference between what you are doing and what the government is doing is really not enormous. It’s not the difference between slump and prosperity.

EB: I am sticking to the plan in the sense that we would have done Alistair’s plan in government. George Osborne didn’t. He ripped it up. He went £40 billion faster including the VAT rise and it hasn’t worked and he is trying to blame the snow, or Labour or the euro. It was his decisions which choked off the recovery. But listen, the IMF said a few months ago – the IMF who George Osborne used to boast about supporting him – they said that if the economy undershot growth plans, if it wasn’t growing, the sensible, balanced thing to do was to slow the pace of cuts, to reverse and do some tax cuts, get the economy moving, boost growth and jobs, get unemployment down to get the deficit down. The IMF is right and I back the IMF in their proposals. George Osborne doesn’t. If he moves to a more balanced plan we will support him. If he doesn’t, I am deeply fearful, deeply about what this will mean for growth for jobs and for deficit reduction in the next few years.

AM: So what you would do that’s different is that you would for instance reverse the VAT rise and you would slow the cuts. Now that costs you a lot of money pretty much straight away. Where do you find that money?

EB: It’s a five point plan for growth and jobs that you set out and you mentioned two elements there, also repeating the bank bonus tax for youth jobs. But we would agree with the IMF the right thing to do –

AM: [Interrupting] That tax, it is said, you have spent nine times so far on different projects.

EB: Andrew, the Conservative Party says that. It doesn’t make it true. It’s a lie. The only proposal we are making for spending the bank bonus tax is for youth jobs. We have a five point plan, which the IMF has said if there’s no growth you should slow the pace and move to a more balanced plan. George Osborne says that will lead to more borrowing and that would be irresponsible. He is going to borrow in the next five years, according to his own independent forecasts, over £100 billion more than he planned. He is borrowing for unemployment and failure. I say get the economy moving, get some help for families, some help for businesses which will get growth and jobs moving and get the deficit down. It’s a massive choice. It’s a very, very big choice. It’s not just trivia and inconsequential.

AM: Realistically, you would both be borrowing a great deal, you would both be facing an extremely difficult international situation and you would both have economic plans for growth which aren’t the same but they are not a million miles apart. I just ask again whether the heat and the aggression between the parties at this time of national crisis is appropriate?

EB: I think it is fundamentally necessary because when the government is making a catastrophically wrong decision and people are fearful and angry, the opposition has got to stand up for the alternative, as happened in 1929, 1930 and 1931 in a similar situation after a financial crisis. I have been on this programme many times when you have said to me that what I am proposing would not work, would be irresponsible. You can’t now say it’s the same as George Osborne’s plan. There was a big choice a year ago. We were out on a limb in advocating a different approach. Actually, increasingly, the IMF, the OECD, business organisations, Conservative MPs are all seeing that the George Osborne and David Cameron’s plan hasn’t worked. It has led to more borrowing. We need a different course and a long-term reform of our economy too.

AM: So if we see the credit easing plan for small companies that we read we are going to, that is something presumable that you would be pleased by?

EB: If there is a credit easing plan, that would be a good thing. It should have happened earlier. If they reintroduce the Future Jobs Fund, good. If they don’t go ahead with the freeze in fuel in January, good thing. I think they should actually do a temporary cut in VAT which would be more. If they do more to help get down child poverty, we’ll support that.

AM: If we see this credit easing, you would back it? That is my question.

EB: We will look at the detail. I don’t quite know how it’s going to work. But I think it’s very similar to the small firms’ guarantee scheme which has been around for years. But the issue is, why is the economy not growing, why are firms not borrowing, why is confidence slumping? Because the fundamental strategy isn’t working. And George Osborne is going to want to placate here and rather desperately push aside here and on his big issue he is totally in denial until he gets his head out of the sand and sees it’s failing, it’s not going to work.

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Posted November 27th, 2011 by Ed's team