Sky News interview with Adam Boulton on unemployment figures and the eurozone crisis

Adam Boulton: What did you make of PMQs? Not quite the note on which Labour would want to end the year?

Ed Balls: I think there are people up and down the country who are really worried about rising unemployment and it is one of those days where I’m afraid the knockabout and the jokes across the House of Commons despatch box slightly jar with the deep concern that families and businesses have about bills and jobs and exports. I don’t think it is a great day for the House of Commons.

AB: But if you take the issue of unemployment, particularly youth unemployment, the reality is that this has been a problem for this government as it was for your government? You know the famous quote from David Miliband saying the problem actually started during the last Labour government.

EB: Well it is true to say first of all we did a great job getting youth unemployment down with the New Deal and the windfall tax after ’97. It is also true to say that in the middle of the decade we focused on incapacity benefit and lone parents and during that period youth unemployment was still lower, but it was on a rising trend. That has completely now changed in the last year where youth unemployment has now shot up to a record high. And Ed Miliband was absolutely right to pin this on David Cameron. He promised a year ago to sort youth unemployment and it has now soared throughout this year. And David Cameron didn’t have a single answer. That is why… I think that, in the end, if you read the transcripts …

AB: You might not agree with him, but you cannot deny that programmes have been put in place to deal with youth unemployment, particularly apprenticeships, I know they cancelled your scheme but each government repackages the last one don’t they?

EB: Why would you cancel the Future Jobs Fund when unemployment is falling and then wait for unemployment to be rising again so fast to try and put a new scheme in place? That takes months.

AB: The problem that they found was that people were being taken through the Future Jobs scheme, taken on for a limited period and then put back on to the dole queue?

EB: Unemployment was falling. Look it is a nonsense to make that argument because the whole point is to get young people into jobs, get them skills, even if it is a temporary job it sets them up for the future. Instead we have seen, this year, a 90% rise in long-term youth unemployment. No wonder the Chancellor is having to borrow billions more than he planned, he is spending all these extra billions on benefits. That doesn’t get the deficit down, that is why the plan is not working.

AB: And yet your big plan is ending up having to borrow more because you want to cut VAT?

EB: Well George Osborne, and we have debated this many times on your programme, is borrowing £158bn more …

AB: Now I know he borrows …

EB: Why?

AB: By your plan he would have to borrow still yet more, so you can’t attack him for that?

EB: But Adam, the reason why he is borrowing more is because unemployment is rising. And what the polls say today, 49% to 40% in The Independent, people agree a plan now to bring the deficit down in a steadier way and get people into work is a better way to get the deficit down. They are going too far, too fast. It is not working and young people …

AB: Take that plan, I am going to be talking to Justine Greening in a moment, Transport Secretary, investment in infrastructure, that is exactly what you would be doing if you were in government?

EB: But the statement two weeks ago announced further cuts in infrastructure every year. There have got to be tough decisions, we’ve got to get the deficit down. But if you try and go too far, too fast, it backfires. It ends up with rising unemployment, more borrowing. I’m afraid that David Cameron wants to blame the euro crisis, the euro crisis is going to hit our economy next year, so far this is all his doing.

AB: Do you think the deal that the 26 reached is going to stop a euro crisis?

EB: No. Absolutely not. Absolutely not. I thought the outcome of the summit was a disaster for Europe and the euro. The things on the table which they were talking about don’t address the issue of the European Central Bank, they don’t address the issue of the fiscal straitjacket, they have no plan for jobs and growth. It is a catastrophe building week by week. And did last week solve it? No. Did our Prime Minister solve it? He walked out.

AB: Yeah but on that basis, if you think it was such a disastrous agreement, not associating yourself with it sounds like a reasonable thing to do?

EB: Not if you are a responsible statesman and not a party politician because we are going to be so affected if this euro crisis blows up. And it was a catastrophic failure …

AB: But if they come out with a stupid plan why associate yourself with it?

EB: Because if they don’t get the right plan we are all going to pay the price …

AB: Yeah but they wouldn’t listen to him …

EB: Why Adam? Why?

AB: They would hardly listen to him on, you know, you are getting it all wrong on the euro and you should be doing something different?

EB: Adam, the British Prime Minister is treated with contempt by the rest of Europe, what a disaster. President Sarkozy …

AB: It doesn’t appear to be what the British people think …

EB: President Sarkozy earlier in the year was calling for action to get the European Central Bank engaged. David Cameron told the Financial Times, ‘I want a big bazooka for Europe’. He walked away from this summit with nothing.

AB: No but you just said you don’t think the 26 came up with the right answer?

EB: I don’t.

AB: So why associate yourself with it?

EB: Because if you walk away … if you walk out of the room and you leave them to make mistakes, it is worse for Britain.

AB: Do you think there are things coming down the pipeline that will be imposed on the City of London that will be detrimental for employment in this country?

EB: Well I hope not. I really hope not. And in the past it has always been the case that you had to win a majority, a qualified majority, and build alliances to make sure we protect financial services. We have never lost a serious vote on those matters. It has been good for London being in the European Union. But now we are outside of the room, left to their own devices, who knows what they are talking about …

AB: You are making it clear that if you had been the British PM there you would not have supported this agreement?

EB: Ed Miliband, Douglas Alexander and I have all said this was not a good deal, but you don’t walk away and betray the British national interest by leaving the eurozone still without an effective central bank, a plan for jobs and growth, a proper plan to sort out the crisis. It is a catastrophe and David Cameron may drink champagne in Chequers this weekend, but for months and years to come we will pay a very, very heavy price for that lightweight lack of leadership.

-ends-

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Posted December 14th, 2011 by Ed's team