Analysis: Balls has some good ideas – but do his figures work?

Ed Ball's speech in Manchester aimed to take infrastructure decisions out of party-political hands.
Ed Ball's speech in Manchester aimed to take infrastructure decisions out of party-political hands.
Ian Dunt By

Ed Balls pre-briefed so much of his conference speech there was little of it left to report.

However, one major policy announcement stood out. It is not the kind of thing which wins over wavering voters, but it is a sign of an advanced political strategist and gives a good indication of how Balls wants to shape Labour's image when the 2015 general election comes.

In an echo of Gordon Brown's decision to grant independence to the Bank of England, Balls wants to hand long term planning and infrastructure projects (the national grid, high-speed broadband, that sort of thing) to a non-governmental body. The plan is to stop day-to-day party politics from scuppering much-needed projects and reducing business confidence in the UK.

It's very interesting. One of the main problems of democracy as a system is that it is very bad at addressing problems which take more than four years to fix. There is simply no incentive for a government to fix a problem it won't get credit for.


Balls deserves credit for handling major systemic faults like this, but the policy also shows how he wants the party to change its image before the general election. Clearly the shadow chancellor realises how effective the coalition's attack on Labour's alleged financial irresponsibility was. His solution is to say as often as possible how tough it will be if it returns to power. He needs to get the voters to trust Labour with the economy again, just as Brown did. It's no surprise he's taken a lesson from his former master's playbook and updated the Bank of England move.

He made a series of points to this effect today, pledging to spend any cash from the sell-off of the government's shares in the banks to lowering the deficit, implementing a "zero-based" spending review once in power, refusing to promise to reverse coalition spending cuts and pledging to keep George Osborne's independent Office of Budget Responsibility. He also savoured a fight with the unions, in typical Tony Blair style. The war with his own party makes him look tough and decisive and shows the press Labour is ready to make 'the difficult choices'.

The long-term infrastructure proposal plays into that image. It is business friendly and it reflects a mature approach to politics which is more concerned with 'national interest' than it is with day-to-day headlines. Even the phrase 'national interest' – used by the Tories at their conference a couple of years ago - is now seemingly up for grabs.

But there were problems. He promised delegates everything was fully costed. If you're trying to create a reputation for responsibility, you don't want journalists untangling your sums. Unfortunately, there may be some difficulties.

As Lib Dem blogger and occasional politics.co.uk contributor Charlotte Henry points out, Balls plans to use the 4G mobile network sell-off to spend £3 billion on 100,000 affordable homes. This is designed to help with the housing shortage and create jobs. Back in the day, the 3G sell-off raised about £22.5 billion, but 4G will bring in less. France raised just £747 million, while Germany raised £3.5 billion. The British auction's reserve is set at £1.5 billion, but it could bring in just £2 billion.

Balls also pledged to freeze stamp duty on first time buyers purchasing properties up to £250,000. But a report by HMRC spotted by blogger Guido Fawkes this doesn't have much of an impact on the housing market.

"The tax relief has not had a significant impact on improving affordability for first time buyers," it read. "It is estimated that most of the people who benefited would have purchased property in the absence of the relief anyway."

These problems aren't too severe. Ball's speech - and especially the political strategy behind it - still has much to commend it. But the shadow chancellor will need to be careful he's getting his twos and threes into a row, or else his responsibility initiative could backfire.

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