Murnaghan interview on the recession, Jeremy Hunt and local elections

DERMOT MURNAGHAN: Well now, if you believe the polls, Labour are storming ahead of the Conservatives and the Liberal Democrats but not on the economy. Labour’s two Eds cannot persuade the public that they could get us back on track more quickly than Dave and George so why not? Well let’s say a very good morning to the Shadow Chancellor, Ed Balls, and if I can start first of all Mr Balls with the Prime Minister’s reassurances about Jeremy Hunt, the Culture Secretary. You have called, Labour has called for his resignation of course but the Prime Minister has said that really the Leveson Inquiry should not be pre-empted and he doesn’t feel at the moment that Mr Hunt broke the ministerial code.

ED BALLS: Well the Prime Minister is refusing to investigate whether the Ministerial Code was broken and the code is very clear. If there is an allegation and a doubt – and there is because Jeremy Hunt clearly misled Parliament on information, he was clearly a party to this bid when he should have been objective – the Code says the Prime Minister will refer this, it should go to Alex Allan, it should be investigated now. I’m afraid the Prime Minister is trying to brush this away, push it into Leveson because he is afraid of the scrutiny of that investigation, and because he knows that the allegation of side deals with News International is about Jeremy Hunt and the Prime Minister himself. That is the charge and I have to say to you Dermot, if the Prime Minister put the same energy into defending hundreds of thousands of jobs up and down the country as he is putting into Jeremy Hunt, one person in his Cabinet, then on the economy he might not be losing trust so quickly.

DM: OK, nice segue into that, we’ll be talking about the economy in great depth in a moment or two but just on Hunt, do you not feel that the Leveson Inquiry, as the Prime Minister says, as we all know, is a judicial inquiry and will get to the bottom of things? Look at the way it’s been delving into email and text exchanges between so many of the great and good.

EB: Look, even the Leveson Inquiry itself has said it’s not its job to decide on the probity of one individual minister and whether they misled Parliament, that’s the Prime Minister’s job and he should abide by his own code. It doesn’t say that the Prime Minister might refer it, it says he will refer it. Look, Jeremy Hunt I’m afraid has not acted in an objective way. These emails in advance of the BSkyB decision, a multi-billion pound deal of which he was the decision maker, this is like a high court judge the day before the trial, texting and emailing a defendant to check how he’s doing and to reassure him it will all be OK. That is not proper, it is an abuse of Parliament and it should not be pushed into Leveson. The Prime Minister should take some responsibility for his cabinet. I’m afraid Jeremy Hunt’s position is untenable but this is a Prime Minister who knows actually it’s not really about Jeremy Hunt, it’s about David Cameron and George Osborne, the conversations that they had, the deals that they struck, it comes back to the very top of the Conservative Party and that’s why the Prime Minister is desperate to push this away and try to prevaricate but the country will just think this is not a way to run a country.

DM: OK, you think it’s a bit of a smoke screen as well, covering up the economic performance in a double dip recession it was announced last week of course. Labour now has, according to the latest poll, an eleven point lead over the Conservatives yet within that poll it says your prescription, Labour’s prescription on the economy is still not the one most preferred?

EB: Well as you know, Dermot, these polls are changing month by month. Two years ago Labour didn’t win the election, George Osborne and David Cameron said we’ve got a plan which will work and I think many people said let’s give them a chance, give them the benefit of the doubt and they said we’ll secure the recovery, we’ll get the deficit down, we’ll get unemployment falling. What we saw finally last week is absolute clear evidence we’re back in recession, unemployment’s high, borrowing is much higher than they planned and at that moment people will start to say, as they already are: what is the alternative, can Labour be trusted to make the difficult decisions in the face of this Cameron-Osborne failure, a recession made by them in Downing Street? I look at these polls and think there is a long way for us to go, the small parties are still doing too well, we’ve got a lot of work over the next couple of years to build that trust but for David Cameron and George Osborne this is a catastrophe. In the last month, on the economy their competence in tatters but also people saying, look, they said ‘we are all in this together’, this is the same old Conservatives cutting taxes for millionaires and putting taxes up for pensioners and families. It’s unfair and it’s not working. This is a very important moment in this parliament but Labour has got a lot of work to do, you’re right about that.

DM: Well I mean, you’ve said it yourself really, haven’t you, a lot of work to do. Is now not the time then to set out a clear long-term vision of where you want to get to rather than odd bits of policy here and there, perhaps particularly coming from your department?

EB: Well I talked today in The Observer about the dangers of a lost decade, years of slow growth, of high unemployment, people paying a long-term price in their living standards but also mass youth unemployment lasting for years. We pay a long-term price for that, we’ll end up with fewer people going to university, fewer investing in skills and technology so we need to act short and long-term to turn that round and here’s what we should do. Right now the government must come forward with a plan for jobs and growth to get the economy moving: a cut in VAT, bring forward infrastructure projects, repeat the bank bonus tax for youth jobs, a cut for small firms taking on new workers, a VAT cut to help small businesses doing repairs and maintenance – five things which could be done right now to get the economy moving, to get unemployment falling, to get borrowing coming down and then also we need a long-term vision for the future about how we have a stronger, fairer and investment rich economy. Now there is a big debate happening in Britain. If you look at the last couple of days there are Conservatives on the right of the Conservative Party saying the answer is more tax cuts and deregulation, Boris Johnson said that today …

DM: Hold on, you just talked about more tax cuts, a VAT cut and a National Insurance cut, that’s not that different to what we’ve been hearing from the likes of Liam Fox and Boris Johnson today?

EB: Look, Boris Johnson, Liam Fox and I agree that we need a tax cut to get the economy moving. It’s only David Cameron and George Osborne who say it’s not working but we’re going to plough on regardless. If you’re in a hole, Cameron and Osborne, stop digging. That’s what Liam Fox and Boris Johnson are saying, as am I. There is then a debate though about what is the best tax cut and I have to say for Boris Johnson to say the priority now is only to cut taxes for people above £150,000, that’s not fair and some on the right say just deregulate, make it easier to hire and fire people. I think we need investment in science, investment in infrastructure, a youth jobs plan, I think we need a long term British Investment Bank to get funding for small firms but even though I disagree with Boris Johnson and Liam Fox’s prescription, we agree we must do something. David Cameron today is saying the economy is the most important thing but he is doing nothing about it, he has nothing to say, his plan’s not working and he is ploughing on regardless.

DM: Well let me put more to you about how much closer you probably are to elements of the government’s position than you’d claim because presumably on the long-term future you agree with this aspiration of rebalancing the economy in so many ways, between the south and the north and away from financial services towards manufacturing and exports?

EB: Well I want a balanced economy of course and that means more investment in manufacturing. I think financial services are very important but so are other services, media, education, skills in IT, all those kinds of areas. We agree on the vision but you don’t get to a more balanced economy by cutting investment in science, cutting investment in universities, mass youth long-term unemployment, the economy stagnating for year after year and underneath that there’s a deeper point. David Cameron and George Osborne believe if the government just walks away, cut public jobs, cut public investment, somehow the private sector will just get on and create the jobs but the private sector needs decent transport, decent skills, good universities, investment in science. The private sector is so unconfident at the moment because the government is walking away from the things that will make a difference to growth and jobs for the long-term.

DM: But you know, because you understand the figures most than most don’t you, you know that in reality this government hasn’t cut at all in terms of spending, it’s last financial year 696.4 billion, Labour’s last one in office 669.7 – it is spending 4% more than you were, the cuts aren’t there.

EB: Well that’s partly because they made inflation so high above 5%. These are real term cuts …

DM: But allowing for inflation it is a 0.8% cut…

EB: Exactly

DM: … which is exactly what Alistair Darling was talking about.
EB: And there is a deeper point here because the government, there is no doubt they have cut investment in new school buildings, they have cut tens of thousands of public sector jobs, they’ve cut support for services up and down the country. Their problem is they are spending a lot more than they planned on unemployment because it’s so much higher, while the taxes aren’t coming in from people who are out of work. The reason why this is so self-defeating, the reason why they are borrowing £150 billion more is because if you flat line the economy, put it into recession, you spend and borrow for the wrong things. I say if right now you cut the taxes and do some spending on things which will make a difference now, over the next one, two, three, four years you’ll actually get the borrowing down by getting people into work, paying taxes and making our economy stronger, not weaker, for the long-term. That is why the Osborne plan is such a catastrophe, he doesn’t understand the economics of this at all and that’s why it has blown up so badly.

DM: OK, well that’s the Balls plan and the Labour plan on the economy, in terms of this lead and it has been consistently building for some time now, do you put it down to the appeal of your leader?

EB: I think that Ed Miliband has done really well over the last eighteen months, in particular on pointing out the need for action on high energy bills for pensioners and families, on saying that we need fairness in our tax system but we also need a jobs plan for young people, repeat the banks bonus tax for youth jobs. He has also led the debate over the past year saying we need to clean up our politics as well, including party funding. But Ed and I would be the first to say there is still a lot more for us to do to rebuild that trust, for people to see we’ll make the tough decisions, for people to see that Labour has got a detailed plan for the economy and for the future but the one thing you can definitely say in the last month, six years of David Cameron trying to say I’m a compassionate Conservative, completely collapsed in three or four weeks. They failed on the economy and they are now so unfair as well and it just looks a little bit sleazy, don’t you think, Dermot?

DM: Well, that’s for others to judge. For you to have cemented this recovery you have to do well in the upcoming elections, the mayoral elections, London of course perhaps the most high profile of that. Do you think your candidates in the London elections is going to make it or do you think it’s his tax affairs which is letting him down and those tax affairs, are they something you would approve of?

EB: Well I think Ken Livingstone has been transparent, as have the other candidates equally about their tax affairs. It’s important that people pay the proper amount of tax and people have seen Ken Livingstone and Boris Johnson have both been paying a similar amount of tax overall. This is actually about who is going to cut the Tube fares, who’s going to create the jobs. Boris Johnson today is clearly very worried about the Cameron/Osborne failure hitting him next Thursday and is now out saying I’ve got an alternative plan. Bizarrely it’s not about jobs or Tube fares, it’s about cutting taxes at the top, I’m not quite sure what the politics of that is for Boris Johnson, I think he’s fighting a different election in the Conservative {arty to the Mayoral one. The other thing to day, Dermot, I’m in Norwich today, we’re hoping to make gains in Thurrock, in Harlow, in Ipswich, in Norwich, right across the east, the south-east as well as the rest of the country. This is not only about London on Thursday, this is about the rest of the country but in London I think Ken Livingstone will do a better job for Londoners than Boris Johnson and I hope people will see that on Thursday in the polls.

DM: OK, from the macro economy to campaigning in Norwich there, the Shadow Chancellor Ed Balls, thank you very much indeed.

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Posted April 29th, 2012 by Ed's team