Ed Balls: Labour will accept Tory cuts in full

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By a Newsnet reporter

Labour’s shadow Chancellor Ed Balls has announced a policy U-turn on public sector pay and spending.

In an interview with the Guardian newspaper, Mr Balls announced that Labour will support the Conservative freeze on public sector pay for the lifetime of this Parliament, and that he accepts every spending cut imposed by Conservative Chancellor George Osborne.  

The announcement has provoked anger from the unions, the party’s largest financial backers, and risks alienating the party’s remaining traditional support base. 

Mr Balls’ move also throws Labour strategy in Scotland into further disarray.  Until now the party has attempted to present itself to Scottish voters as their best bet in resisting the Conservative’s slash and burn approach to the public sector and public spending.

Mr Balls said:  “It is now inevitable that public sector pay restraint will have to continue through this parliament.  Labour cannot duck that reality and won’t.  There is no way we should be arguing for higher pay when the choice is between higher pay and bringing unemployment down.

“I know there will be some people in the trade union movement and the Labour party who will think of course Labour has got to oppose that pay restraint in 2014 and 2015.  That is something we cannot do, should not do and will not do.”

Mr Balls also conceded that Labour would be unable to reverse Conservative cuts if the party regains power, saying:

“We are going to have keep all these cuts.  There is a big squeeze happening on budgets across the piece.  The squeeze on defence spending, for instance, is £15bn by 2015.  We are going to have to start from that being the baseline.  At this stage, we can make no commitments to reverse any of that, on spending or on tax.  So I am being absolutely clear about that.”

The policy change by Labour now also risks alienating voters who depend upon the welfare system.  Mr Balls added that shadow Welfare secretary Liam Byrne, who upon leaving office infamously left his Conservative successor a note saying “good luck, there’s no money left”, would shortly be announcing “tough decisions” on welfare.  “Tough decisions” is widely understood as code for further cuts.  

Today (Saturday) Mr Balls is due to make a speech to the Fabian Society in which he is expected to give further details of Labour’s policy U-turn.  According to an advance release of Mr Balls’ speech, the shadow Chancellor is expected to say:  “However difficult this is for me, for some of my colleagues and for our wider supporters, we cannot make any commitments now that the next Labour government will reverse tax rises or spending cuts – and we will not.”

Mark Serwotka, the leader of the Public and Commercial Services union, said that Mr Balls’ policy U-turn was “hugely disappointing” and went on to accuse the Labour Party of “emulating the Tories”.

Mr Serwotka said:  “Instead of matching them on the cuts they should be articulating a clear alternative and speaking up for public sector workers and ordinary people in society.”

Meanwhile Alex Gordon, president of the National Union of Rail, Maritime and Transport Workers, warned that Mr Balls’s announcement to accept Conservative cuts and pay freezes will cost Labour dearly in votes.

Speaking to the BBC, Mr Gordon said:  “What Ed Balls is announcing is that Labour’s given up on opposing those policies.

“I think from the trade unions’ point of view, what we’re going to be asking is if Labour doesn’t want to be the opposition, then where is the opposition going to come from to this government?

“Our members aren’t going to stand by and take another two years of this kind of punishment and then turn out at the ballot box in 2014 and meekly vote for a Labour opposition that has supported these punishing cuts.”

With Labour falling well behind the Conservatives on the economy in UK opinion polls, and Ed Miliband struggling to make an impact as leader, the move by the shadow chancellor will be seen as an attempt to make the party more attractive to Conservative leaning voters in Middle England.  This creates immense difficulties for the party north of the Border, where Labour is simultaneously trying to position itself as the party Scots should trust as best placed to fight a Tory-led cuts agenda.  

In a week when Labour leader Ed Miliband announced that he is “100%” behind David Cameron in his attempt to bounce Scotland into a referendum of Westminster’s choice and at a time of Westminster’s choosing, Mr Balls’ announcement now brings Labour into a close rapprochement with the Conservatives on economic policy as well as on the constitution.