IMF growth upgrade: Tories' chance to taunt Ed Balls

Jan 21, 2014
The Mole

Good economic news for George Osborne means whispering campaign against Balls will continue

MORE bad news for shadow chancellor Ed Balls. The IMF’s Christine Lagarde is expected this afternoon to raise the forecast for Britain's economic growth from 1.9 per cent to around 2.4 per cent. Growth in the UK is outstripping the rest of the world.

Ben Brogan, deputy editor of the Daily Telegraph, detected the sound of “chortling” at Conservative HQ this morning, what with this latest economic breakthrough and the sight of their Lib Dem colleagues sinking in the Rennard mire.

Brogan blogged: "Tory polling shows that Labour has no economic credibility, that Ed Balls is a liability, and that Mr Miliband is unconvincing as a future prime minister."

The growth figures are a gift for Chancellor George Osborne, giving him the chance to tell his Labour opposite number: “I told you so”. As Nick Robinson, the BBC's political editor of the BBC, tweeted: "IMF due to upgrade forecast for UK econ growth today. Unemployment stats tomorrow. Tories will use to taunt Ed Balls."

Certainly there's a danger Osborne will look like a puffed-up Cheshire cat when he appears at the World Economic Summit in Davos starting tomorrow. Last year, he clashed with Olivier Blanchard, the IMF's chief economist, who accused Osborne of “playing with fire” with his austerity plan. Blanchard is now saying he is “pleasantly surprised” by the strength of the recovery.

The Mole expects Balls's critics – and there are many on his own benches – to continue the whispering campaign against him, even though Ed Miliband said on the Andrew Marr Show on Sunday that he would not move his shadow chancellor before the general election.

"Ed Balls is doing a really good job," said Miliband. "He’s going to be the shadow chancellor going with me into the election. 

"Look, people have their critics. The thing I say about Ed Balls – he’s got a clear sense of what this economy needs. He’s working with me on tackling the cost of living crisis that we face and he’s got the toughness to stand up to lots of people who want more spending…"

Miliband's carefully worded assurance avoided a commitment to make Balls the chancellor after the election, if Labour can win it, but it seems inconceivable he will be moved now. Cue more chortling from Chancellor Osborne’s office.

Meanwhile, Balls has been keeping his head down since his red-faced performance at Osborne's Autumn Statement. Yesterday, as Guido Fawkes reports, he was campaigning with his old boss Gordon Brown in Scotland.

To be fair to Balls, there are good reasons for his questioning whether the UK is enjoying the “right sort of recovery” and whether it can be sustained. The Financial Times reported at the weekend that Britain's recovery is dangerously London-centric, creating an even greater wealth gap between north and south.

City analysts are pointing out that the UK’s rapid growth compared to the rest of the world is only because we started from such a low base. Balls can still argue that we would have been enjoying growth earlier, if only Osborne had adopted his Plan B last year.

But Balls’s big problem is not growth. It is debt. In the same Andrew Marr interview, Miliband dithered over whether Labour would go into the next general with a clear commitment to eliminate the deficit in the next five-year Parliament.

Osborne has set out his plans to continue cuts in spending after the next election and he is expected to challenge Balls to commit to his plan with a deficit reduction bill later this year. It is a trap that Balls and Miliband will want to avoid.

The big question now is: will the IMF forecast for UK growth feed through into a feelgood factor for the Tories before the next general election? Or will the Balls/Miliband mantra about the “cost-of-living crisis” continue to chime with voters?

James Kirkup of the Daily Telegraph says in his blog it has now been 216 days since David Cameron gave one of his monthly press conferences. The Mole would not be surprised if Cameron decided to hold one now.

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Does anyone with a modicum of nous and knowledge believe anything any government spouts?
We have had so many self gratifying claims of unemployment drops, growth increases and economic recoveries over the past five years, only to have them quietly revised downwards three to six months later, when we knew they were blatent lies in the first place.
They just lie first, then lie again to justify the first lie. What hope have we?