Transcript of my BBC interview on today’s revised GDP figures

Here’s a transcript of my interview on the BBC news channel this afternoon

Ed Balls: Well it’s good news and it’s about time Carole. We’ve had three years when the economy should have grown, when people should have been better off, and they’ve been worse off because the economy has flatlined. And finally after three years we’re starting to see some growth back in the economy. I think it would be very complacent to say this recovery is secure. That’s what the Governor of the Bank of England said just a couple of weeks ago. But any growth is better than no growth. We’ve waited far too long for this to happen. Does it say the Government’s policies have worked? There’s no doubt that in the last three years they’ve failed catastrophically, that’s why we’ve had such a poor growth performance, the deficit’s not come down and people are worse off, but at last there’s some growth – that’s a good thing.

Carole Walker: But it’s now all moving in the right direction, isn’t it?

EB: Well the economy was recovering in 2010 and then the recovery was choked off by George Osborne’s Spending Review in the autumn of that year and the VAT rise. They thought the economy by now would have grown three, four times more than it has and they never foresaw what’s actually happened in the last three years and is still happening in these figures today, which is that for ordinary people prices are rising faster than wages, people have been worse off month after month after month and these figures confirm today the only people who saw a boost in the last quarter were people getting multi-million bonuses, benefitting from the top rate of tax, who were able to move their money into April, to benefit from that top rate tax cut. If you’re a millionaire it’s ok but for ordinary families they are worse off in these figures today, as they have been for three years.

CW: These figures show that spending actually grew 0.9 per cent over that period, despite all the cuts. How much more would you have been spending?

EB: Well the problem over these three years is that they’ve been cutting public jobs, they’ve been cutting spending on key services …

CW: Spending has continued to grow even though it has been growing at a lower rate.

EB: I was about to say Carole, the problem they’ve had is that they’ve been cutting spending in some areas but the bills, as Liam Byrne said this week, for unemployment have been rising. We’ve got the highest levels of youth and long-term unemployment now for 20 years. We’ve seen the bills for the benefits to pay for failure going up and up and up …

CW: So you would have been spending more? But government spending is still increasing at 0.9% – what would you have had it at? Double that perhaps?

EB: We’d have seen unemployment coming down and we would have had a bank bonus tax to give every young person a job, to get young people and the long-term unemployed back to work, to say to them, ‘look you can’t be on benefits and not take a job, we’ll get you a job and you’ll take it’ and that would have got the benefits bill down. The Government’s never done those things, they’ve never built the houses we need, they’ve never got young people back to work, they’ve cut taxes for millionaires, but raised them for everybody else and the result is people are worse off, the welfare bill has gone up, and the deficit – George Osborne said …

CW: But different sets of figures continue to move in the right direction that you’ll then appear to be completely out of step with what is actually happening in the real economy?

EB: Well, I’m very happy to have a debate with you, and David Cameron and George Osborne about who’s out of step and out of touch, because I think there’s nothing more out of touch than cutting taxes for the richest when everybody else is seeing their incomes falling and are worse off. We’ve said all the time there should be a recovery in growth, it needs to be balanced, but also you’ve got to make sure that ordinary families benefit. And I’m pointing out to you that: one, this growth is much too late; secondly, it’s very complacent to assume it’s going to last – we and the IMF are saying to George Osborne do more to get growth back into the economy; thirdly, what’s happening on exports and investment has been very weak …

CW: Well exports are up; these figures show exports are up …

EB: And over the last three years the export performance has been woeful, in the UK, the same for investment …

CW: But it’s all moving in the right direction and that’s the problem for your Party, isn’t it? Perhaps that partly explains why your poll lead is slipping?

EB: Well the reason our poll lead has stayed strong is because we’ve been talking about the issues which matter to people: their wages; their living standards; what we can do to get investment to build the homes that we need. You’ve seen David Cameron and George Osborne desperately trying to persuade all those voters who went off to UKIP to come back to the Conservative Party and frankly they’re not doing very well. Labour has stuck solidly on 37, 38 per cent in the polls. We want to do better than that – I would like to see us up into the 40s. But we’re not complacent, there’s a long way to go, but I think for all the froth and nonsense on the BBC and everywhere in the last few weeks, Labour has been showing in this Parliament, we’ve been doing better than any opposition party normally does in the first time after an election defeat. I think we’re on track.

CW: Let me ask you about one other specific issue. Alistair Darling who originally supported the HS2 project now says he thinks the money could be spent better elsewhere. Do you agree?

EB: Well, we have consistently supported plans for a new North South rail link but it’s got to work and it’s got to be value for money. As Alistair said today, the Government’s approach to this has been completely chaotic. He’s drawn one conclusion …

CW: Can you guarantee that you’re going to maintain support for the project?

EB: I think the best way for me to say that to you Carole is that there’s no blank cheque from a Labour Treasury for HS2. It’s got to be value for money. If the case is not strong enough, if you don’t see the gains, if as we’ve seen in recent weeks and months the costs go up and up and up, that’s something which we have to keep under review. Value for money is the test, it’s got to work, there’s no blank cheque. Alistair’s drawn one conclusion, which is he’s withdrawn his support. We say, let’s keep examining this case. The Government’s been completely chaotic. They’ve lost control of the costs and that is a real concern.

CW: So even before the election if you think the costs are getting out of control you could withdraw your support for HS2?

EB: There will be no blank cheque from a Labour Treasury for this project or any other project. Public spending has to be disciplined in its control. We have to make sure that every pound is spent wisely. That’s what good government’s do, that’s what I will do as the Shadow Chancellor and as Chancellor and that applies to HS2 as much as to any other project. The costs have been spiralling up, they’ve got to get a grip, this has been totally chaotic, there’s no blank cheque, it’s got to be value for money, the case has got to be made.

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Posted August 23rd, 2013 by Ed