Ed Balls is in denial over economy, MPs moan

Labour MPs have been grumbling to the Mole about Ed Balls. They say the shadow chancellor's speech to the Parliamentary Labour Party on Monday - when he once again accused George Osborne of cutting the national deficit "too much, too soon" and refused to take responsibility for the economic disaster he and Gordon Brown inflicted on Britain - proves he is in denial.

Worse still, Balls plans to stick to this line with a speech to the LSE today when he'll claim that George Osborne risks putting "a permanent dent" in the British economy with his full-speed-ahead deficit reduction plan.

The problem for backbenchers is that Balls is flying in the face of the facts. For example, the IMF gave its support last week to Osborne's strategy, while yesterday's figures showed unemployment is going down not up, as Balls had prophesied.

"Treating the voters as stupid is one thing, but treating the Labour backbench as idiots is too much," one MP told the Mole.

As a result, there is heavy selling in Balls shares around the Labour backbenches as a possible candidate to replace Ed Miliband, should the nasal one fall under a Labour party double-decker campaign bus one of these days.

Balls should have the leadership sewn up. He's aggressive, he has the killer instinct to take the attack to the Tories, and the confidence to bury Lord Snooty - David Cameron - and his toff pals. The trouble is, he has made more enemies than friends on Labour's own benches since his PLP appearance.

It came only a few days after the Daily Telegraph published the leaked Balls documents showing that the Treasury had warned him and Gordon Brown that they were not getting value for money from the £91bn extra Brown poured into public services after supplanting Tony Blair.

The word has got round the PLP that Ed Miliband thinks it's time Labour admitted they did not got the best value from those funds. But that policy has been rejected by Balls. As a result, there is a mini-rebellion against Balls on the Labour benches just at a time when Labour needs all the unity it can muster to win support for its narrative on the economy. Without that, they will never win the next election.

Labour MPs are particularly angry when - instead of admitting the mistakes revealed in the Balls Papers - Ed quoted Alan Johnson, the former shadow chancellor (for 10 minutes) who said it would be dangerous to "cut too much too soon" to get down the deficit. Balls told the assembled Labour MPs: "That should be our watchword."

"It was an absolute disgrace," one disgruntled Labour MP told the Mole. "You even heard 'too much too soon' being repeated by one of the clones in Prime Minister's Questions. Balls is treating the backbench like a bunch of idiots.

"And then he got his cheerleaders to say how disgraceful it was that people were briefing against Ed Miliband at the weekend."

All that Balls has achieved is to convince David Miliband's supporters that he should "keep his head down and his nose clean" until the moment he can snatch back the leadership that should rightly be his, but for a few hundred thousand trade union votes.

But the Mole thinks the David Miliband camp is guilty of wishful thinking. Balls may not get the crown, because he is so disliked, but my tip is to start buying shares in Mrs Balls. Yvette Cooper is brainy but far more disarming than her husband. She swept through Westminster on her way to PMQs looking like Sandy Shaw used to look... only shorter. ·