Transcript of Ed Balls Interview

PLEASE NOTE "THE ANDREW MARR SHOW" MUST BE CREDITED IF ANY PART OF THIS TRANSCRIPT IS USED

THE ANDREW MARR SHOW

INTERVIEW:

ED BALLS, MP

SHADOW CHANCELLOR

NOVEMBER 27th 2011

ANDREW MARR:

For months the Shadow Chancellor Ed Balls has been telling the government it needs a Plan B, a plan for growth. Well during the week, we had a flurry of announcements on house building, tackling youth unemployment and so on, so does he see Plan B taking shape in front of his eyes? If Labour were in government, it would presumably be cutting as well by now and having to deal with a backlash from the Eurozone crisis. So what would Ed Balls really do differently? Well he's with me now. Welcome.

ED BALLS:

Good to be here.

ANDREW MARR:

Before we turn directly to the autumn statement, let's just talk about Wednesday's strike.

ED BALLS:

Yeah.

ANDREW MARR:

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 we're going to have a strike on Wednesday. I don't think anybody wants it. It's going to be hugely disruptive for families, for businesses. But I also have sympathy for those low paid public workers, those low paid public sector workers who are seeing their contributions going up and their pensions cut. We're 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.

ANDREW MARR:

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

ED BALLS:

Well I would urge the union leaders to say we'll give ground and we'll talk. And 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 made clear two weeks ago they were going to give no more ground. Even John Hutton has said this is very risky, the 3 per cent rise in contributions. It's also deeply unfair. And in these circumstances there are loads of very low paid, three quarters of a million low paid workers being 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 minds that they wanted this confrontation. David Cam…

ANDREW MARR:

Well except that both sides are quite close to agreement in different areas. I mean there are unions and employers in different government departments not so far apart coming together. And you know a lot of people would say it's inevitable - any government, a Labour government would end up having to deal with publics at the cost of public sector pensions. This is never going to be easy. It's always going to be painful, but there has to be a compromise and having a strike like this doesn't help.

ED BALLS:

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 that the trade unions had walked into his trap. No Labour prime minister in the last thirteen years ever sat around saying I'm privately delighted at strikes and confrontations. I think that is deeply, deeply irresponsible and the disruption on Wednesday to many families and businesses, with whom I've got great sympathy …

ANDREW MARR:

Yuh.

ED BALLS:

… could be avoided if David Cameron decided he wanted to act. And he hasn't and it's his intransigence and I think his opposition to progress which is causing the problem here.

ANDREW MARR:

Let me put a proposition to you about the autumn statement and the argument around it, which is that if you look at a lot of the things the government has recently announced and look likely to announce this week, they're not so different from the kind of things that Labour would be doing when it comes to youth unemployment, when it comes to trying to get some money into struggling small and medium sized firms, when it comes to helping commuters; and that when people look at the exchanges in the Houses of Commons - including between yourself and George Osborne and there's 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're with them. We agree. This is the kind of thing we're going to do and we're going to help them get them through the House of Commons quickly.

ED BALLS:

I would love a consensus on the way forward with George Osborne, David Cameron and the Liberal Democrats. I'd love it and I think it would be better for Britain. And you're 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're now saying let's put back 10 per cent of the housing spending they cut. They're now saying let's put back some infrastructure, let's do more for small firms lending, building up 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 and it was hard then - they said if we go faster on deficit reduction, £40 billion more of cuts, the fastest cuts of any country, they said it would lead to private sector jobs, to growth, to confidence, to falling unemployment, and it hasn't worked and we disagreed then with it.

ANDREW MARR:

(over) And clearly we're in economic troubles at the moment, but if …

ED BALLS:

(over) Of the government's own making.

ANDREW MARR:

Well if their deficit reduction system hasn't worked, why is it that the British government is able to borrow money at 4.5 per cent below or 5 per cent below what it's costing the Spanish and the Italians and others? Britain has a triple A rating, gilts you know are going at a very good price, and our international reputation seems to be pretty strong, and the government would say that's down to our deficit reduction plan and sticking to it.

ED BALLS:

Well they would and that has been the fantasy they've pedalled for the last year. And 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're not in the euro and because we have very low growth. And America in August had their credit rating downgraded and their interest rates didn't go up. They went down too because America's not growing. Secondly, they say they've got credibility with the financial markets because they've got a deficit reduction plan, but you know … In your intro you talked about me advocating more borrowing. 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.

ANDREW MARR:

And the truth is the difference between you is now infinitesimally small.

ED BALLS:

That's not right.

ANDREW MARR:

It's a third of 1 per cent. You would be doing much the same. If you're still sticking to Alistair Darling's original plan, and I ask you - you still are?

ED BALLS:

Yes of course, but …

ANDREW MARR:

So if you're sticking to that plan, then the difference between what you're doing and the government are doing is really not enormous. It's not the difference between sort of slump and prosperity.

ED BALLS:

I'm 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's 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 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 to 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 balanced plan, we'll 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 year.

ANDREW MARR:

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 straightaway. Where do you find that money?

ED BALLS:

Well, look, it's a five point plan for growth and jobs we set out, and you've 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 …

ANDREW MARR:

(over) I mean it is said …

ED BALLS:

… the right …

ANDREW MARR:

That tax, it is said that you have spent nine times so far - the bank bonus tax on different projects.

ED BALLS:

Well no. Andrew, the Conservative Party say that. It doesn't make it true. It's a lie. The only proposal we are making to spend the bank bonus tax is for youth jobs. We've a five point plan, which the IMF has said if growth is not growing … if there's no growth, we should slow the pace, move to a more balanced plan. George Osborne says well that would lead to more borrowing and that would be irresponsible. He is going to borrow in the next five years, according to his own independent forecasters, over £100 billion more than he planned. He's borrowing for unemployment and failure. I say get the economy moving, give 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.

ANDREW MARR:

Realistically you'd both be borrowing a great deal. You would both be faced with the same extremely difficult international situation. And you both have economic plans for growth which aren't the same, but they're 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?

ED BALLS:

I think it's fundamentally necessary because when a government is making a catastrophically wrong decision and people are fearful and angry, the opposition's got to stand up for the alternative - as happened in 1929, 1930 … 1931 in a similar situation after a financial crisis. I've been on this programme many times when you've said to me what I'm proposing would you know not work, would be irresponsible. You can't now say it's the same as George Osborne's plans.

ANDREW MARR:

So, so …

ED BALLS:

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's led to more borrowing. We need a different course and a long-term reform of our economy too.

ANDREW MARR:

So if we see the credit easing plan for small companies that we read we're going to, would you at least back that? That is something presumably that you would be pleased by?

ED BALLS:

Well, look, if there is a credit easing plan, that'll be a good thing. It should have happened earlier. If they reintroduce a 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.

ANDREW MARR:

If we see this credit easing, you would back it is my question?

ED BALLS:

Well, look, we'll look at the details because 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 and a plan …

ANDREW MARR:

(over) So you would presumably back it, yeah?

ED BALLS:

Yes, but that isn't the point because the issue is why is our economy not growing, why are firms not borrowing, why is confidence slumping? Because the government's fundamental strategy isn't working. And George Osborne is going to want to sort of placate here and rather desperately push aside here 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.

ANDREW MARR:

Well his head will be out of the sand and he'll be able to answer all of these points very shortly. For now, thank you very much indeed Ed Balls.

INTERVIEW ENDS

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