Sack Balls, Screw the Unions

Ed Balls helped create British fiscal mess, cannot remain Shadow Chancellor

If Labour leader Ed Miliband has a single, overriding problem, it comes in the embodiment of his Shadow Chancellor of the Excchequer, Ed Balls.

As a former Secretary to the Treasury -- charged with heloing manage Britain's public finances -- Balls had a direct hand in the profligacy that has led to the current state of the UK's finances.

Yet he has the temerity to stand as Shadow Chancellor, even as he continues to avoid admitting his part in the ballooning of Britain's public debt.

Terry Smith, the President of Tullet Prebon, has had enough. He says it's time for Balls to depart from Ed Miliband's shadow caucus.

“He is in total denial about the fact that Labour was running a deficit years before the financial crisis struck and seems to think that we can borrow and spend our way out of a crisis caused by excessive debt,” Smith declared. "There is no avoiding the fact that Labour ran a growing deficit from 2002 as the economic boom was heading towards its peak”.

Smith charges that Balls, as well as Gordon Brown and those others tasked with keeping Britain's finances on the rails, put political expediency far ahead of responsible fiscal management.

“Moreover, the government spending which led to this deficit before the banking crisis struck was wasteful, unproductive and cynically aimed at buying the loyalty of a growing dependent section of the population to the Labour Party,” Smith continued.

Ed Balls wasn't the only thing on Smith's mind. He also declared the pensions owed to public service employees to be unviable, and suggested they should be cut back.

"Unviable because we cannot sustain a system in which people can retire and live for another 20 years at the expense of the state,” he explained. “This was never the intention of the original social security systems and it has been made unviable by improvements in health care and life expectancy.”

Smith has presented Ed Miliband with some difficult choices. Certainly, labour unions will never tolderate a Labour leader who pushes back against their unsustainable pensions. Certainly, the left wing of the Labour Party will bristle at Ed Balls being relieved of his duties.

Smith suggests that Balls should be shuffled to the most junior shadow cabinet post in existence. Ed Miliband would be better off shuffling Ed Balls out of politics altogether.

Balls, and his allegiance to the unions, are relics of an old left-wing politics that has catastrophically failed in Britain. If the Labour Party is to survive -- and its survival is far from guaranteed -- they will need to find a new brand of left-wing politics that can account for and repair the damage done by Ed Balls and his associates.

Ed Miliband Wins By a Hair

Younger Miliband top second choice on Labour ballot

After months of underwhelming campaigning, the British Labour Party has finally named its successor to Gordon Brown.

Ed Miliband accumulated enough second-choice votes on the preferential ballot to edge out his older brother David by less than 1%.

In a rather unambitious victory speech, Miliband pledged to lead his party back to power.

"My aim is to return our party to power," he announced. "This is a tough challenge. It is a long journey. But our party has made the first step in electing a leader from a new generation."

But instead of merely offering knee-jerk reaction to the coalition government of the Tories and Liberal Democrats, Miliband has promised a comparatively collaborative approach to government.

"As well as setting out an alternative when the government gets it wrong, we will support it when it is right," he continued.

Yet at the conclusion of a leadership campaign in which moving beyond Tony Blair's famed New Labour was often a central theme, Miliband more or less promised to re-deliver the magic that created New Labour.

"We have a lot of ground to make up if we are to rebuild the broad coalition of support that swept us to power in 1997," he announced. "We must never again lose touch with the mainstream of our country."

Of course, claiming an eventual margin of victory of scarcely more than 1%, Ed Miliband can hardly claim to represent the mainstream of his own party, let alone of Britain.

However Ed Miliband chooses to approach this detail, he may want to send a thank-you card to Ed Balls.

The ballot-by-ballot breakdown of the preferential vote shows that, until Ed Balls was eliminated, the younger Miliband trailed his older brother David by what eventually turned out to be the margin of victory.

It wasn't until the final ballot that the vote shifted in favour of the younger Miliband.

The intrigue of the preferential ballot is that it allows a candidate to effectively play the role of kingmaker without having to directly endorse another candidate.

Ed Miliband has already offered his brother David the key role of shadow Chancellor. It's certainly fair at this point to wonder what Miliband is prepared to offer Balls.

In the meantime, Britain -- and the rest of the world -- will wait to see what Ed Miliband has in store for his party.

Tony Blair's Deferred War on the Working Class

Labour knew they were spending, borrowing too much

As Labour leadership candidates Andy Burnham and Ed Balls battle over whether or not the Labour party would have embarked on a program of cuts similar to that of the current Tory/Liberal Democrat government, Lord Andrew Turnbull, former head of the British Civil Service, has dropped a bombshell on the debate:

The Labour party was spending too much, and knew it was spending too much. And it knew in 2005.

Lord Turnbull suggests that it was political pressure that convinced Tony Blair and his government to continue spending at a manifestly undisciplined rate, even after it became evident that there was a problem.

"It kind of crept up on us in 2005, 2006, 2007, and we were still expanding public spending at 4.5 per cent a year," he explained. "You might have thought that we should have been giving priority to getting borrowing under better control, putting money aside in the good years - and it didn't happen."

Lord Turnbull's comments reveal Keynesian economics for precisely what they became under Tony Blair: an excuse to spend, even at the expense of the government's ability to battle a recession by expending savings accumulated during strong economic periods.

Lord Turnbull explained it very simply: "Public spending got too big relative to the productive resources of the economy."

"The politics was that we had put an end to boom and bust," he said. But it didn't work that way. The government overspent even during the time of boom, and now succeeding governments have to fix the problem.

All of this complicates matters intensely for the current crop of Labour leadership candidates, looking to replace Blair's successor, Gordon Brown.

Andy Burnham has been tremendously candid about the necessity of cuts under a Labour government.

"Let's get some honesty in this debate," Burnham said. "There would have been significant spending cuts under Labour and there would have been job losses under Labour."

For his own part, Ed Balls seems to think that things would have been magically different under a Labour government.

"I think Labour would have been creating jobs this year," Balls insisted. "At a time when the economy is slowing down, we should be building houses, not cutting them, building schools, not cutting them."

This of course begs the question of where the money would have come from. But Balls seems to think that he has the answer... or at least something he can easily pass off as the answer.

"The banks should be paying the price of the crisis, not people up and down this country," Balls insisted.

Of course, it shouldn't be the banks that pay the price for the excessively poor fiscal policy of the Blair and Brown governments. One way or the other, under one government or another, the British government will have to pay the price for that.

Unfortunately, it's inevitable that when the government pays, the citizens will pay as well.

Many among Britain's left have gleefully seized upon the looming cuts by the David Cameron government of waging class warfare against the middle and working classes.

But even as Tony Blair spent the government of Great Britain deeper and deeper into debt, he had to have known that a fiscal day of recknoning was coming. Tony Blair had to have known that the middle and working classes would be hit hardest by that reckoning than anyone else -- including himself.

If class warfare is being waged against the working and middle classes at all, it's Tony Blair's defferred class warfare.

Ed Miliband to Come Up the Middle?

Labour may ditch Blair/Brown baggage with compromise candidate

With the slate of candidates for the Labour leadership contest filling up, David Miliband remains the odds-on favourite to win. Ed Balls seems to be viewed as the number two man in the race.

But as Andrew Grice suggests, the dynamics that are so often at play in political leadership contests may give the winning edge to a third candidate: Ed Miliband.

As Grice notes, David Miliband was a staunch supporter of Tony Blair. In turn, Blair helped champion his careeer. Ed Balls is a close contemporary of Gordon Brown who, in Paul Martin-esque fashion, applied relentless pressure to help spur Blair's departure from office.

Balls will be saddled with memories of that relentless push.

Like any political party in need of unity, Labour members would very much like to put the Blair/Brown divide behind them.

For Ed Miliband, matters are rather different. He isn't seen as particularly close to Blair or Brown, despite having served in Brown's cabinet.

The differences between the two Milibands also seem be paramount in the minds of Ed Miliband's supporters.

"Ed Miliband's supporters do not like comparing him to his brother and there is a noticeable absence of war (and major policy differences)," Grice writes. "When pressed, they say David offers brains without charisma while Ed offers both and can therefore reconnect with Labour's lost supporters while uniting the party."

"Ed Miliband's critics claim he lacks the experience or instant judgement to handle unexpected events and would offer compromises rather than strong leadership – more Neil Kinnock (one of his main sponsors) than Mr Blair," Grice continues. "Mr Brown is said to have described Ed Miliband as 'a cross between an academic and a preacher'. Quite a lot of Labour members may like the sermon."

Last but not least, the preferential ballotting system used in Labour Party leadership votes may facilitate the younger Miliband in emerging as a compromise between his older brother and Ed Balls.

While Labour could stand to break from the bitter divisiveness of the Blair/Brown struggles, it would adopt a risk in electing Ed Miliband as a figure of compromise.

Compromise candidates are often perceived by the public as not having been fully imparted with their authority by the party membership.

For a party coming off of a catastrophic election loss, that could prove to be even more devastating than the loss itself. The Labour Party will need to weigh its options very carefully before making that kind of decision. Unfortunately, the preferential ballot may actually deprive them of the opportunity to do that.

Labour Leadership Race Getting Crowded

With the Labour Party extending the deadline for would-be leaders to declare their candidacy, the race to become the successor to former Prime Minister Gordon Brown has gotten crowded.

It may get more crowded yet.

The campaign started slowly, with the Miliband brothers, David and Ed, declaring their candidacy. They have since been followed by Ed Balls, Andy Burnham, John McDonnell, and Diane Abbott.

Abbott is the MP for Hackney North and Stoke Newington. In 1987 Abbott was the first black woman elected to the British House of Commons. Abbott is a second-generation Birton born to Jamaican immigrants. She has also contributed her talents to the Jamaica Observer newspaper.

Although Abbott, 56, was a member of the National Council for Civil Liberties, where she worked alongside former Labour Cabinet Ministers Paul Boateng, Harriet Harman and Patricia Hewitt, Abbot has no Ministerial experience -- likely a handicap in the contest.

John McDonnell, 58, is the MP for Hayes and Harlington. He chairs the Socialist Campaign Group, a group by the name of Public Services Not Private, and the Labour Representation Committee. He also serves a group of eight large labour unions as their benefactor in Parliament.

McDonnell will likely be the left-wing standard-bearer of the leadership campaign. Among his acts as a left-wing insurgent within the Labour caucus has been joining together with a number of Plaid Cymru MPs to demand an inquiry into the Iraq War that his own party initiated.

One could expect that a McDonnell victory would be the prelude to a significant leftward shift for Labour Party policy.

Leigh MP Andy Burnham, 40, seems to be the heavyweight of the newcomers. He has served as Secretary of State for Health, Secretary of State for Culture Media and Sport, and as Chief Secretary to the Treasury.

Burnham joined Labour at the tender age of 14, in protest to the Thatcher government's treatment of miners.

However, Burnham was also hit by the recent controversy over MPs' expenses. He attempted to claim 16,000 Pounds Sterling in expenses for a home he had been renovating in London. He submitted the claim on numerous occasions. It was rejected each time.

Whether or not the Labour Party manages to attract additional leadership candidates, the stage has been set for an intriguing leadership campaign.

Balls Deep for Labour Leadership

Ed Balls declares candidacy for Labour leadership

Youth is clearly the flavour of the campaign to replace Gordon Brown as the leader of the Labour Party.

David Miliband is 45 years old. His brother Ed is 40.

The newest candidate to declare for the Labour leadership, Ed Balls, finds himself in the middle at 43 years of age.

As leader, Balls would seek to build a party that listens to the people of Britain.

"I think it's really important we don't just talk to ourselves, we've got to go out and hear what the public say," Balls declared. If Labour had listened to its supporters, Balls seems to contend that it may not have suffered its recent defeat.

Perhaps Labour would have recognized what Balls contends to be a shift away from traditional Labour policy.

"I believe [New Labour] lost the moral basis of the Labour Party as it was founded ... the creation of a fair and just and peaceful and equal society," Balls remarked.

Balls, the Miliband brothers and any as-yet-uncontested candidates will compete for the leadership of the Labour Party over a four month period. Labour will decide the leadership on September 14, 2010.

The only thing that marks the difference between what this leadership contest is and what would have transpired had the party won the May 6 election is that the party would have been choosing not only a new party leader, but a new Prime Minister.

Gordon Brown had intended to resign as Labour leader within a year of the election.

So in the long run, this leadership contest means very little for Labour. Ed Balls will have to work very hard to be the one of this to-date young lot to emerge as the new Labour leader.

Gordon Brown Concedes Labour Leadership

Brown resigns as Labour leader, but not as PM -- yet

As Britain continues to wait to find out who will assume the role of government, and who will be Prime Minister following the May 6 election, one question surrounding the vote has been answered.

Gordon Brown has resigned as the leader of the Labour Party.

He conceded that Labour's failure to decisively win the 2010 General Election was a direct judgement on his leadership.

"I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election," Brown announced. "I would hope that it would be completed in time for the new leader to be in post by the time of the Labour Party conference."

Even while contenders line up to replace him, Brown will not support any of the candidates.

"I will play no part in that contest, I will back no individual candidate," he explained.

This comes at a most inopportune time for Labour, as their negotiators have been meeting with the Liberal Democrats to make their bid to form a government.

This places Labour in a quandry: if their overtures to the Lib Dems are to be successful, they'll have to promise a quality leader.

The candidates are already lining up.

Foreign Secretary David Miliband and Education Secretary Ed Balls are reportedly set to launch their leadership campaigns. Hull West-Hessle MP Alan Johnson is also being strongly pressured to join the contest.

David Miliband seems to be the favourite to become the next Labour leader. But contests like these seldom produce the self-evident winner. And with the prize at stake potentially being the privilege of occupying Number 10 Downing Street, one can expect that the contest will be fiercely contested.