George Osborne turns up heat on rival Ed Balls after spotting chinks in armour

Tuesday, March 1, 2011

George Osborne turns up heat on rival Ed Balls after spotting chinks in armour

Chancellor believes Labour's campaign on behalf of Britain's 'squeezed middle' is undermined by contradictions at heart of its economic policy

George Osborne reckons he has spotted a couple of highly significant chinks in the armour of his enemy.

In an article in the Guardian, the chancellor writes that Ed Miliband's campaign to champion Britain's "squeezed middle" has two fundamental flaws.

First, it is ill defined. Osborne mocks Miliband by writing:

Let's pass over his failure in every interview to define it ? his last effort included around 90% of taxpayers.

Second, Labour's economic policy is riddled with contradictions. Osborne writes:

Here is a cut-out-and-keep guide to the contradictions at the heart of Labour's economic argument that would not �survive first contact with reality.

The chancellor then outlines three contradictions in Labour's economic policy:

? Ed Balls, the shadow chancellor, is wrong to claim that Britain's public finances were in fine form before the economic crash. Osborne writes:

Even Tony Blair has now admitted that 'from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit'. If the current Labour leadership won't even admit the basic errors of the past, why should voters believe that it wouldn't repeat them?

? Labour says it would abide by Alistair Darling's plans to halve the fiscal deficit over four years. This would lead to �14bn in spending cuts in the coming financial year ? �2bn less than the coalition's plans ? and yet Labour opposes many of the planned cuts. Osborne writes:

Day after day [Labour] opposes the spending cuts [the Darling plan] requires...With just five weeks to go until April we know everything about the cuts Labour opposes but nothing about the cuts it supports.

? Labour accuses the coalition of tackling Britain's deficit for ideological reasons but does not criticise the organisations that have endorsed the plans. Osborne writes:

Labour...claims we are dealing with their deficit for ideological reasons, but funnily it doesn't accuse the organisations who support our approach of a similar motive.
The pace of the government's plan is backed by, among others, the G20, OECD, IMF and European commission ? and at home, the CBI, IFS and two of the three main political parties. That doesn't look like an ideological line-up to me. Quite the reverse: it is close to a domestic and international consensus.

Osborne concludes:

My party learned the hard way over 13 years that opposition without a credible alternative tends to remain just that: opposition. The real squeeze is not on the middle, but on Labour's muddle.

The chancellor's article is designed to mark a sharpening of the coalition's political attacks on Labour ? and specifically Ed Balls ? in the run up to the budget on 23 March. One Treasury source said:

We are surprised that Ed Balls, who has been in post for a month, has not grappled with these contradictions. That shows weakness. If you don't deal with contradictions in your economic policy in opposition then it will unravel.

Ed Balls, who is laughing after the BBC pictured him as a bulldog in a film on Sunday, will be up for the fight. He likes nothing better than a good scrap.

Nicholas Watt

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