Balls In The Mail Today

[Fancypants]

pages 78 and 81. A couple of corkers.

Here

Brown's most trusted ally 'not ready' to be next Chancellor

by ALEX BRUMMER and STEWART FLEMING

Ed Balls has been a minister for less than a year

As Gordon Brown's most trusted adviser and City Minister, Ed Balls has long been seen as the most obvious candidate to succeed the Chancellor when he moves to Number 10.

But the 40-year-old pretender doesn't think he is yet ready to leap into the second most powerful job in government.

In an interview in his bright office overlooking St James Park, Balls gives a definitive 'No' when asked if he will taking over the at the Treasury.

"I have been a Minister for less than a year," Balls says.

Adding rather modestly for the official credited with the authorship of many Brownite policies including the creation of an independent Bank of England: "I still have a lot to learn."

Like his boss Balls has a huge capacity for work and is part of the life force which has made the Treasury central to almost every aspect of New Labour's work.

Earlier this week Balls was surprisingly to be found in Ramallah and Tel Aviv seeking to put in place an 'economic roadmap' for the Middle East if and when the Mecca peace deal between Palestinian factions is accepted in Jerusalem and the peace process restored.

From the tortuous politics of the Middle East it was back to London and the first firm spending commitment of the Comprehensive Spending Review - a pledge that budgets for 'social exclusion' would be expanded so that the unbanked and disfranchised in the financial system would be looked after.

Then a lunch for school kids from the Wakefield-Leeds area where Balls has become the ambassador for local grown rhubarb.

With the budget looming next Wednesday, Balls and the whole Treasury have their eyes fixated on the economy and the public finances.

"Public spending is going to be lower in the current spending review than in the last," Balls acknowledges. It looks as if the large scale increases in health spending - projected to reach £89.1bn in 2007-8 - will be the last.

"The Wanless review set out a first five year period of substantial investment followed by a period when the rate of growth would slow," Balls says.

"That is what we are implementing. That has always been clear to the NHS," he adds.

One sign of the sacrifices it may have to make comes from the latest jobless data which shows numbers working in the NHS falling by 11,000 in the fourth quarter.

However, the Comprehensive Spending Review (CSR) for 2008-2011, which will be outlined in the budget, should be better news for education with Brown determined to tackle Britain's skills deficit.

Balls notes that the Treasury is making "tough decisions on administration budgets across Whitehall so we can then release resources for areas we would like to see continued expansion and that includes education".

Balls firmly rejects the sniping which comes from the City and the opposition benches about the management of the public finances and charges of manipulation of the Chancellor's fiscal rules.

He says that international observers from the IMF and others who come to the UK are astonished by the sophistication of the debate about fiscal policy.

"It's like no other country. We have a degree of transparency which we haven't had before.

"Has the Treasury gone out of its way to manipulate the cycle? Absolutely not," he asserts.

"Actually the rules didn't change at all. The numbers changed."

In the City Minister's view the changes in the definition of the economic cycle - which allowed the government to meet the 'golden rule' on borrowing for investment alone - were due to changes in national output not politics.

He rejects Tory calls for reform of fiscal policy as "deeply mistaken".

It is clear from Balls that despite the rising concerns about sub-prime mortgage lending in the U.S. and forecasts of a possible recession from former Fed chairman Alan Greenspan, Brown's last budget will be bathed in optimism after 40 consecutive quarters of output expansion.

"We have an economy that even in a difficult period has continued to sustain growth. Both domestically and internationally we have faced pressures on inflation in the past few months. We have gone through a period of turbulence on financial markets," Balls says.

"Economies like ours in the past few years have shown that these periods of market turbulence can be handled."

Just in case, the Treasury, Bank of England and the Financial Services Authority have been doing "a lot of work" on financial stability in recent months. Fearful of complacency he does warn that it is becoming harder to monitor risk "from the point of view of the system as a whole".

He believes that if you have a strong policy in terms of controlling national debt "you can deal with inevitable ups and downs in terms of tax revenues" and can keep the economy growing.

Balls played a leading role alongside Brown in making the decision, days after Labour won power, to make the Bank of England independent.

Ten years down the line, voices are being raised in favour of an overhaul of the rate-setting regime.

Leading lights, including the Bank’s deputy governor Rachel Lomax, have complained about the opaque and sometimes haphazard way in which Brown makes appointments.

MPC member David Blanchflower’s decision to remain living in the US has raised fears members aren’t as plugged-in as they should be.

Balls rejects demands for a major re-think, describing proposals from Shadow Chancellor George Osborne to give Parliament power to vote on the Bank’s inflation target as "short-termist and destabilising".

He says: "From the appointments of DeAnne Julius and Willem Buiter onwards people have seen that we have appointed high-class people who have been clearly been independent in the way they have acted."

But Balls sounds amenable to a change in the length of MPC members’ terms, which currently stand at three years.

Buiter said last year that longer, single terms would allow members more time to settle into their roles and make an impact.

"On changing the length of appointments, personally I think this is an interesting debate to have. In the beginning, in 1997 we chose three years at a time when we were starting out with a new system."

One of the MPC’s biggest headaches at the moment is the housing market, which is roaring away even as inflation remains close to target.

Balls says talk of housing gloom and doom sounds all too familiar.

To the extent that there’s a problem with the British property market, it comes down the supply of new homes failing to meet demand, he argues.

"People have been talking about a housing market bubble for some years. If you go back two or three years ago, some were predicting a consumer recession and a downturn because they said this bubble was going to burst.

"In fact that hasn’t happened. House prices have stayed strong, but there was a moderation in the rate of inflation following the Bank of England’s comments (in 2004).

"But in my reading of this, this isn’t about short-term financial movements, this is a long-term issue in the British economy, which is that demand for housing has been rising and the supply of housing for a sustained period of time wasn’t keeping pace."

The only time that the ebullient Balls seems lost for words during our interview was when we asked him if had yet developed a replacement for his famous 'endogenous growth theory' so mocked by Michael Heseltine before the 1997 election.

Balls looked flummoxed and batted away the question. As an elected politician of 18 months he has learned some lessons.

and here

UK economy 'will weather storm'

Sam Fleming, Daily Mail

15 March 2007

World financial markets suffered another day of turmoil, amid growing fears for the health of the US economy.

The FTSE 100 suffered a third day of decline, shedding 2.6% to finish at 6000.7. Trading screens flashed red across the world, with Wall Street suffering concern about soaring mortgage defaults before bouncing back.

But City Minister Ed Balls told the Daily Mail the UK economy remains well placed to weather the storm. 'Both domestically and internationally we have faced pressures on inflation in the past few months, and we have also gone through a period of turbulence on the financial markets,' he said.

'It's right that policy-makers are vigilant. (But) economies like ours in the past few years have shown these periods of market turbulence can be handled.'

Balls admitted it is now 'harder to monitor' where the biggest accumulations of financial risk lie. The Treasury, Bank of England and Financial Services Authority have stepped up their monitoring of market stability in recent months, he added.

He spoke as a senior official at debt rating firm Moody's said the problems afflicting higher-risk mortgages in the US may herald an end to the glut of liquidity that has fuelled world markets.

The situation in the US property market is very different from that in the UK, where prices are being sustained by low levels of housing supply, Balls said.

'I think you learn more from studying why we are different from the US in the housing market than our similarities.'

He and Chancellor Gordon Brown are putting the finishing touches on next week's Budget. They were given a boost by the International Monetary Fund, headed by Rodrigo de Rato, which predicted Britain will grow faster than any other G7 economy this year.

Leaked forecasts showed the UK growing 2.9% this year and 2.7% next year - faster than previouslyforecast. The Confederationof British Industry also upped its estimates, while warning that strong growth may lead to another interest rate hike.

Fears of rising rates rose after a report showed a tighter labour market, with the number of jobless claimants falling 3,800 to 922,200.

Edited March 15, 2007 by Fancypants

[Wannabe]

"Balls in the Mail Today..."

So what's new?

[Guest The_Oldie]

The comments are worth a read too

http://www.dailymail.co.uk/pages/live/arti...e#StartComments

[OzzMosiz]

He's a slimey snot-rag!

[IWantItNow]

"Balls in the Mail Today..."

So what's new?

Damn....beat me to it

[planit]

I like this bit the best:

"which has made the Treasury central to almost every aspect of New Labour's work"

Everything is built on spending

[apom]

Thank god for that..

I had thought that the housing boom was caused by an explosion of cheep credit caused by the removal of the cheep credit from the inflation measures..

allowing the biggest injection of cash into the economy ever to not appear as inflation.. which allowed borrowing rates to drip even further..

fuelled by the largest ever turning of a blind eye to the largest amount of economic fraud ever carried out.. in the form of fraudulent mortgages..

but its all because there arent enough houses..

well if there arent enough where are we all living you cretin..? and if there arent enough..

sorry, the blokes a bloody idiot..

balls up, crash gordon, brown out.. mr ed (talking horse..) the names could'nt have been chosen better..

our economy hammers into biblical levels of debt under an innacurate measure of inflation... but this cretin says its all fine.. dandy.. the IMF donLt agree and nither does the BOE.. amex, goldman sachs.. nationwide.. yadda yadda..

[expatowner]

amex, goldman sachs.. nationwide.. yadda yadda..

Leave the UK now before its too late.

Keep sane.

[Fancypants]

Supply and demand? Immigration?

Here's a clue. London's population peaked in 1939, still some way off that - in spite of recent growth.

http://en.wikipedia.org/wiki/Image:Populat...ondon_graph.gif

Edited March 15, 2007 by Fancypants

[LargelyIgnorant]

But the 40-year-old pretender doesn't think he is yet ready to leap into the second most powerful job in government. In an interview in his bright office overlooking St James Park, Balls gives a definitive 'No' when asked if he will taking over the at the Treasury.

Been thinking about this, and Ed Ball's copping out of the Chancellor's job is, for me, proof that the UK bubble will burst soon. Gordo has been 'grooming' the brains in their partnership for the Treasury's top job with the City minister post for a while now... Ed not wanting to follow in his master's footsteps is onimous... His claim that it's due to his lack of experience is a complete load of Balls when you consider Gordo had no economic experience or qualifications when he started, whilst Ed has been partially responsible for running the UK economy for a decade...

[Guest The_Oldie]

Don't politicians always deny that they're after a position, right up to the time they announce they're in the running?

[LargelyIgnorant]

Don't politicians always deny that they're after a position, right up to the time they announce they're in the running?

Good point... Suppose it is pretty daft of me to take him at his word.

[Pablo-silver or lead?]

Treasury = Poison Chalice, Alistair Darling or Jack Straw?

Pablo Silver or Lead?

[lulu]

So does anyone have any ideas about which fine representative of NuLab deserves the plum role of our next Chancellor? (assuming of course our pal Gordy manages to get his grubby paws on all the top jop)

I hate Margaret Beckett quite alot so she would get my vote

[Smell the Fear]

Been thinking about this, and Ed Ball's copping out of the Chancellor's job is, for me, proof that the UK bubble will burst soon. Gordo has been 'grooming' the brains in their partnership for the Treasury's top job with the City minister post for a while now... Ed not wanting to follow in his master's footsteps is onimous... His claim that it's due to his lack of experience is a complete load of Balls when you consider Gordo had no economic experience or qualifications when he started, whilst Ed has been partially responsible for running the UK economy for a decade...

It also explains why Balls' wife, Yvette Cooper (Housing Minister) was on Radio 4 this morning talking the usual rubbish about wanting to help people into home ownership by allowing them to buy 10% of their council house (whilst taking on the responsibility for 100% of maintenance and associated costs! ).

There is no shortage, we all have somewhere to live. This explains why rents have barely moved for years despite immigration, it also explains why the housing minister talks about needing to build more homes but does virtually nothing to bring it about. There is not really a lack of homes. It's just that the prices of homes at the moment is absurdly high.

They know that it will adjust to normality at some point, so they are reluctant to go on a hugely expensive building spree. Building houses isn't just about planning permission - there needs to be infrastructure in place as well for new communities - schools, hospitals, roads, shops, sewage, electricity etc. This all costs a bloody fortune, and seeing as these things are already in existence to an adequate level building more will result in expensive closures elsewhere and parts of cities turning to decay again, becoming no-go areas.

I know we like to reduce everything to planning permission, but it's not really that simple. The social fallout of huge building would be very negative and expensive.

The real problem is loose lending, which has driven house prices through the roof. Housing is a competitive market, so the price is determined mainly by how much lenders are prepared to give. It would be much better for us as a country if lending for house purchases was restricted. We could then devote less of our earnings to paying for it, we could work for less and be more competitive internationally, and the capital being thrown at housing could be applied to real businesses which generate profits and jobs rather than sucking the life out of the economy.

It won't happen though, because that is a long term plan and governments are only interested in short term plans resulting in our joke consumer debt based economy which cannot survive indefinitely.

[tinecu]

I can't believe Ed Balls subscribes to the 'supply and demand myth'. What a tit.

I hope he does become Chancellor so we can have some great headlines....e.g.

What a Balls Up!

[MarkG]

I hope he does become Chancellor so we can have some great headlines.

I pointed that out in the comment I submitted, maybe that's why they didn't include it .