Sad to learn Alan Johnson has stood down. I guess he might have been asked to resign unsure of the reasons at this stage. While I like Alan Johnson MP as a person and I think he is one of the more reasonable and optimistically I had hoped liberal Labour MPs, I am therefore only somewhat saddened to see him go. The resignation letter and acceptance letter leaked on the internet appear sanitised and for public view so not sure what has caused Alan to jump but suspect Ed’s hand was behind it.
The new Shadow Chancellor Ed Balls comes across as more of a bruiser and I suggest that debate on the economy may become more heated in the future. Although I believe he has some responsibility for causing the deficit from his work in the previous government. I suspect Ed Ball’s will put clear water between his party and the others which will make policy distinction easier. I also suspect popularist and short-termist policies will be adopted more readily under Ed Balls.
I think the tabloids will have a field day with balls related headlines especially around the economy. I think Ed Balls will come out fighting but whatever he attacks with as much damage he lands on the coalition he will damage Labour as the author of the present woes and the first cause. If he hides or ignores the reality and encourages others to believe a delusion that spending is the only answer to all our problems based on an extrapolation of Keynes. Rather than being simply partisan I would find him moving towards blatant opportunism and irresponsibility. As Dicken’s Mr Micawber would say “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” With low interest rates and a deficit that is still growing we need to control spending and have controlled investment to stimulate the economy to help us be able to start repaying the UK national debt and to put our house in order.
Economic theory about a balanced budget or investing in growth through statutory spending are both with merit but I suggest only optimal Keynesian spending should be engaged in and all would agree it is better to have interest coming in from a surplus than spending additional money paying interest especially if the cost of borrowing is to increase. The only controversies are the route to achieve this, the timescale, the sacrifices and who would make the required sacrifices as is so often the case the rhetoric of investing a surplus is laudable the devil is in the detail of getting there. If we as a nation don’t plan to get out of debt, when will we ever? … the only other choice involves default and bankruptcy and the loss of sovereign power and the severe reduction in services we would experience then this must be avoided by continued planned action now!
(EDIT: I have since this post re-designated this blog as a business blog and political views are now in Mike Beckett’s Political Blog: Mikish Musings thank you)