July 20th, 2014

Labour’s National Policy Forum has agreed a policy programme that is radical and credible

The National Policy Forum has this weekend agreed a policy programme that is radical and credible and based on big reform, not big spending.

The Labour Party knows that this Conservative-led government’s failure to balance the books in this Parliament means we will have to make difficult decisions after the next election.

Party members have endorsed the tough fiscal position Ed Miliband and I have set out. We will match the government’s overall day-to-day spending totals for 2015/16. And we will balance the books, deliver a surplus on the current budget and get the national debt falling as soon as possible in the next Parliament.

But we will get the deficit down more fairly by reforming our economy for the long-term and reversing David Cameron’s top rate tax cut for the top one per cent of earners.

Posted July 20th, 2014 by Ed
July 18th, 2014

My response to the CMA’s announcement on an inquiry into bank competition

Ed Miliband and I have repeatedly called for an inquiry into bank competition, so it’s welcome that the Competition and Markets Authority is now set to start this work later this year.

Ministers claim there is no problem to solve, but everyone else recognises that we have a lack of competition in our banking sector.

As we said earlier this year, in the next parliament we need to see at least two new challenger banks and a market share test to ensure the market stays competitive for the long term.

Posted July 18th, 2014 by Ed
July 9th, 2014

Tell me your views on housing

As a local MP, housing is one of the issues I deal with most frequently. People come to me for all kinds of reasons; they are having trouble finding a house, difficulties with unscrupulous landlords, repairs are needed to their council house, a sick child or relative means they need to make changes to their house or they want to raise planning queries and objections.

When I’m out and about people raise concerns that their grown up children can’t get on the housing ladder, or they’re worried about interest rates going up and the impact it will have on their mortgage payments.

I take issues around housing extremely seriously. Everyone needs somewhere safe to live. And with the increase in the number of private landlords in recent years, the rights of landlords and tenants need to be balanced to make sure people are not taken advantage of.

The nature of my work means that I often only hear from people when things go wrong, so I want to check what your experience is. I’m gathering thoughts and concerns around housing in our area so I can make sure people living in Morley and Outwood get the best deal from policies being developed nationally.

You can take part in my online consultation: just click here.

Posted July 9th, 2014 by Ed
July 7th, 2014

Le Tour de Morley

Yorkshire did a fabulous job welcoming the world’s greatest cycle race over the weekend, but at Morley Victoria, their mammouth scoot clocked up enough miles to cover the Yorkshire Stages of the Tour de France and still get half way through France.

Over the course of last week, Morley Victoria pupils scooted a staggering 933 miles.

Nursery: 8 miles
Reception: 60 miles
Year 1: 51 miles
Year 2: 61 miles
Year 3: 93 miles
Year 4: 132 miles
Year 5: 235 miles
Year 6: 287 miles

The school as a whole has scooted the equivalent of the distance from Morley to Marseille in the south of France, with year 6 alone, clocking up more miles than the two Yorkshire stages of the Tour.

It was great fun to be able to join them for a few extra circuits of the playground on Friday. It’s a fabulous occasion for Yorkshire to have the Tour de France passing through our region and brilliant to see Morley Victoria getting involved and taking part.
And of course, here in Morley we have our own local cycling legend in Beryl Burton who not only won UK and world cycling championships but also set a world record which exceeded the men’s record for two years. It’s brilliant that there is now a fitting tribute to her Morley heritage on Queen Street.

Posted July 7th, 2014 by Ed
July 4th, 2014

Politically Speaking in the Wakefield Express

Wakefield is a business hub for the north of England. Nestled as we are between the M1 and the M62, businesses come here because of our brilliant location at the cross-roads of Britain.

At Junction 41, international giants like Coca-Cola sit alongside distribution centres for Morrisons and Yorkshire Purchasing as well as dozens of smaller firms. Collectively the business community across our district employs thousands of local people.

A couple of weeks back I called in on Dun-Bri who have recently opened a new office there. They’re a small family firm providing specialist commercial vehicle lighting to business customers ranging from the AA to the fire brigade. They chose Wakefield because of its great location and were grateful for the help the Council gave them to set up and source local suppliers. But they’re a growing business too and they want to take on and train new people.

That’s really welcome news. I’m in regular contact with local companies and I know how tough things have been in recent years.

Thankfully, at long last, the economy is growing again.  But I’m worried that growth is patchy and hasn’t yet translated into enough well-paid jobs for people in our area. Too much new investment and growth is still concentrated in London and the South East. One in five young people under the age of 24 are not in work or training. And for those who’ve had their working hours reduced or who lost their jobs over the last few years, there has been little in the way of support to retrain in the skills they need to move into new jobs.

Companies like Dun-Bri and others tell me that with more support they would be able to start more apprenticeships, develop their export market, and invest in infrastructure.

We are in a great strategic location in the north of England. We’re close to great road networks and other large cities. But despite the best efforts of our Regional Development Agency Yorkshire Forward (scrapped by the Government in 2010), the region doesn’t get its fair share and the new Local Economic Partnerships haven’t been equipped to meet the big challenges our regional economy faces.

I want to see more of our national resources devolved to areas like West Yorkshire so that people see more benefit here in Wakefield. That way big projects for things such as transport, housing, skills and infrastructure could be decided locally.

A report this week from Lord Adonis sets out a clear plan for regional growth to redress the balance. At the moment the gap between London and the South East, and the rest of the country is growing by the day. Now we’ve finally got some growth back in the economy, the whole country should be benefiting. By devolving power – and resources – to local areas, we could start to see growth in every area. That really would be good news for local businesses and the local workforce.

Posted July 4th, 2014 by Ed
July 2nd, 2014

My Column in the Morley Observer & Advertiser

“Speed up a bit there Ed!” It is fair to say there was a certain amount of heckling from one table of pensioners over my bingo calling on Saturday in Robin Hood. It was my annual Armed Forces Day coffee morning and I joined local residents and members of the armed forces community for coffee, cakes and a round of bingo.

It’s always a wonderful occasion in which people come together to show their appreciation for the work of our armed forces and our support for veterans and the families of those serving overseas.

Kalvinder and her husband arrived proudly carrying a photograph of their son who was spending Armed Forces Day serving in the Royal Air Force in the Falkland Islands. Veterans displayed their medals. And everyone chipped to the raffle to raise funds for the local branch of the Royal British Legion.

I hold an event for Armed Forces Day in the constituency each year. As well as tea, coffee and cakes – which this year were kindly sponsored by the local Morrisons – we also always have a raffle and this year raised £204 in funds for the Royal British Legion.

Congratulations to Peter Aldred on winning the star prize – a special limited edition Royal Air Force plate. And to the lady from Robin Hood who (eventually) won House of Commons chocolates in the bingo. And thank you everyone who was able to come along and show support.

*****

Housing is one of the most common issues in my constituency mailbag. People come to me for all kinds of reasons; they are having trouble finding a house, difficulties with unscrupulous landlords, repairs are needed to their council house, a sick child or relative means they need to make changes to their house or they want to raise planning queries and objections.

Residents also tell me that they want a proper balance in housing and planning policy. People want and need new homes – but want planners to be sympathetic to our local environment and understand the value we put on our greenbelt.

One pensioner couple wrote to me recently, “Housing for the elderly in Drighlington is almost impossible to obtain.” Another resident said, “while I am concerned about affordable housing, I do not want the area to become just another estate.”

And one local mum told me, “Why not build on eyesore sites like disused factories and develop these first instead of open spaces.”

Recently over two thirds of Drighlington residents told me that they are concerned about how difficult it is for young people and families to get on the housing ladder. Over half also thought it was important for new affordable housing to be built for local people. But a similar number were concerned about the amount of house building taking place and the impact this was having on the green belt.

And they’re right. Since the Government scrapped the old brownfield-first presumption for housing and planning, it’s become much more difficult for the local authority to prevent developments. Which has put real pressure on areas like ours with a precious green belt to protect.

I’m very clear that I want to see a return to the brownfield first presumption which meant that developments had to take place in vacant brownfield sites before the green belt could be considered. Most of the two thousand Drighlington residents I surveyed recently agreed. Just 5% thought the existing planning laws were working well.

As regular readers will recall, I’ve written to the Secretary of State on this issue a number of times. And I’ll certainly keep up the pressure. But as well as pressing the Government to get our planning policy reformed to include a presumption of brownfield-first development, I want to make sure local people can have their say.  Anyone who wants to get in touch should email ed@edballs.com or watch out for my latest e-survey.

Posted July 2nd, 2014 by admin
June 30th, 2014

Beyond the Third Way: A new inclusive prosperity for the 21st Century – my speech to the London Business School

Thank you Andrew, and to the London Business School for hosting this speech this morning.

And thank you to all of you for coming. Not least because the advertised title for my speech today, ‘the UK economy’, didn’t really give you much to go on.

This morning I do not intend to talk about the short-term challenges that economic policymakers face here in Britain – the new normal for interest rates, how to boost housing supply, the right pace for deficit reduction – vitally important though they all are.

Instead, I want to stand back and ask what the economic trends we have seen over the last twenty years can teach us about how we should shape our economic policy for the next twenty.

And I want to make my contribution to a debate which economic policymakers have been grappling with, and on which Ed Miliband has been leading the way…

…in the face of seismic global and technological changes, rising inequality and a decade of stagnating median incomes so pay packets are buying less and less, how can we earn our way out of this cost of living crisis and deliver a rising prosperity that can be shared by all citizens and not just a few?

THE THIRD WAY OF THE 1990s

I have chosen this twenty year comparison deliberately.

Not because these trends and pressures started precisely twenty years ago.

But because it is twenty years ago this year that I left my job as a young economist and leader writer at the Financial Times to work for Labour in opposition.

It seems like yesterday – but also a very long time ago…

…and while we now face some very different challenges, there are some striking similarities too.

Back then, our country was recovering from a deep recession, following the ERM crisis. The fiscal deficit was very large, and household incomes were being squeezed by tax rises and cuts to public spending.

And the political debate was focussed on the big global economic changes taking place – the rapid growth of international trade; new competition in manufacturing from emerging economies in Eastern Europe and Asia; and technology replacing jobs and undermining wages amongst low skilled, manual workers.

Of course, this debate took place not just in Britain, but across the developed world.

In America, as debate raged about the North American Free Trade Area and newspaper columnists agonised over what they called ”the downsizing of corporate America”, the first term President Bill Clinton called a G7 jobs summit in Detroit.

That was the summit at which his Labour Secretary, Robert Reich, famously said: “when I hear the word flexibility, I say watch out for your wallet.”

Here in Britain, as we debated the case for Bank of England independence and new fiscal rules to prevent another ERM-style crisis, Tony Blair and Gordon Brown led the public debate about how Britain should respond to these economic changes by calling for a ’skills revolution’.

Meanwhile, Europe’s response was a single currency to deliver stability, a single market to deliver rising prosperity and a social chapter to deliver fairness. All much to the anguish of Tory Eurosceptics.

And on the world stage, Tony Blair and Bill Clinton led the progressive governance movement in calling for a ‘third way’ in response to the challenge of globalisation.

Not passive, free-market laissez-faire on the one hand; or a rejection of open, global markets and a lurch to protectionism on the other; but an attempt to show that a dynamic market economy and a fair society can go hand in hand.

TWENTY YEARS ON

If a new insecurity was taking hold in the 1990s, today those concerns are deep, entrenched and undermining public trust that politics can offer a solution.

As Ed Miliband said after the local and European elections provided all political parties with a serious warning shot across the bow, there is:

“a depth and a scale of disenchantment which we ignore at our peril… that goes beyond one party, beyond one government.”

All politicians have heard time and again on the doorstep the worries and fears of people up and down our country: economic recovery is not working for them and their family, and their living standards are continuing to fall.

And we in Britain are not alone. Far right or populist parties are flourishing across Europe.

Indeed, the pattern we have seen here in the UK – growth returning, but feelings of insecurity and discontent being expressed at the ballot box – was repeated in countries like Denmark and Austria which have also seen growth return and unemployment fall in recent months.

So, twenty years on, the best we can say is that the struggle to prove that a dynamic market economy and a fair society can go hand in hand remains to be won.

Some would say that the Blair-Clinton attempt to forge a third way did not succeed.

That steps were taken to improve the prospects of lower paid workers, including higher national minimum wages and more generous tax credits to make work pay.

But not enough was done to improve the prospects of the non-university educated workforce. While the failure of financial regulation led to a global financial crisis and the global recession which followed hit middle and lower incomes families particularly hard.

I have some sympathy with this argument.

We did not do enough on skills.

And the failure of all parties, in the UK and all countries in the developed world, to see the coming crisis was a huge error.

But I do not believe that the progressives were wrong in their central belief that a path could be taken between free-market economics and protectionism and isolationism.

My argument is that the ‘third way’ did not deliver because the world was changing in a more profound way than any of us anticipated.

And new times now demand a new approach.

Not only do we face new challenges from technological change and globalisation, we must also deliver at a time when there is less money around.

So charting a new way forward for the even more challenging century we now live in is now the challenge for this generation – politicians, businesses, trade unions – all of us.

It is the task of the Inclusive Prosperity Commission, which I am chairing with former US Treasury Secretary Larry Summers and which will report in the autumn.

And it is the subject of the conference that my fellow commissioner, Lord David Sainsbury, and I are organising this Thursday at which Ed Miliband will give the keynote address.

THE 21st CENTURY ECONOMIC CHALLENGE

To understand how to respond to this change, we first have to understand the nature of the change itself.

And this is my starting point: over the last twenty years, the global economy has fundamentally changed – and changed for the better.

As communism collapsed and countries have liberalised their economies, there have been significant reductions in poverty and increases in living standards across Asia, South America, Eastern Europe and now Africa.

Meanwhile, developments in information and communications technology have transformed the way we live our lives and brought the world ever closer together.

And as these trends have accelerated, the global economic map has been redrawn as new opportunities have opened up not just for us, but for emerging markets like China and Brazil.

Back in the 1990s, we recognised that globalisation was creating new challenges.

Trade and technology were combining to place a premium on higher level skills and qualifications, and to reduce low-skilled jobs which could be done more cheaply by robots or workers in poorer countries.

Changes to the structure of labour markets – often caused by the strain of global competition and including the fall in trade union membership – also had a knock-on effect on wages.

And having more working mums has helped to increase living standards – but also made providing affordable childcare and family-friendly employment rights more important too.

While we attempted to address all of these challenges, we failed to foresee three other changes which were going to fundamentally reshape our world.

First, global economic integration led to much greater instability in our financial and tax systems than any of us anticipated.

As we now know, the global financial sector was taking risks that both bankers and regulators did not fully comprehend.

As leverage increased and balance sheets grew, bulging corporate tax receipts gave the impression that everything was rosy.

And here in Britain, the Labour government ended self-regulation by introducing the Financial Service and Markets Act.

But while voices in the City and across the right, including George Osborne, argued that we were being too tough on the financial sector, we should have been much tougher still.

Because when the global crash came, the result was the near-collapse of the financial system and unprecedented state intervention in our banking sector.

Alongside this, globalisation also created much greater complexity in our tax system.

We have all read about large multinational companies that have chosen to avoid paying their fair share of taxes.

Offshore tax havens, transfer pricing arrangements and well-paid accountants have all helped some international firms stay one step ahead of the taxman.

And technology companies, which don’t need a shop front which physically anchors them in a particular country and are free to go where corporation taxes are lowest, have benefited in particular.

Second, labour mobility has also been much greater than anyone expected.

Just as hundreds of thousands of Eastern Europeans have come to live and work in the UK and other developed countries across Europe, so too have millions of Mexicans and Latin Americans moved to the United States, and Indians and Chinese to the relative riches of the Middle East – a new global and mobile middle class.

Additional competition for low-skilled jobs, and increasingly intermediate-skilled jobs, has put great pressure on communities.

And as the countries they left have continued to develop themselves, their use of natural resources like energy, water, precious metals and other commodities has risen, which has pushed up prices and contributed to our cost-of-living crisis.

But third, we have seen profound technological change which is not just substituting for unskilled labour, but replacing traditional middle-income jobs too.

Two decades ago, we were right to worry that low-skilled jobs in sectors like manufacturing would go overseas.

Now the advances in robotics and artificial intelligence means that intermediate skilled jobs will be lost too, in what economists call a ‘hollowing out’ of the labour market.

Sophisticated machine tools and software are already reducing the need for routine jobs on production lines and in offices. And with 3D printers, not to mention Google’s driverless cars or Amazon’s drones, this trend is set to continue.

Meanwhile at the top, the returns from ideas, capital and top-class qualifications are getting greater and greater.

And the result has been, for most developed countries, rising income inequality on a scale not seen since before the First World War,.

THE UK ECONOMIC CHALLENGE

No developed country has escaped the impact of these global trends, but the UK has been particularly hit hard:

- while all developed counties were hit by the global financial crisis, our financial sector – larger and more exposed to international shocks than our competitors – has experienced bigger hits to growth and to our fiscal position;

- the UK’s openness and ‘safe haven’ reputation, alongside the decision – wrong in my view – not to put in place transitional controls on EU accession states in 2004, has meant that immigration – particularly low skilled immigration – has put additional pressure on our labour market;

- and while many countries have tried to increase labour market flexibility in the face of ‘hollowing out’, the UK has seen a particular shift to low-wage, part-time and often insecure employment.

So, we now face the twin challenge of dealing with the aftermath of the financial crisis, while also trying to adapt to the relentless forces of globalisation, immigration, and technological change.

Like many economists, I argued strongly four years ago that, with our economy still vulnerable, George Osborne’s decision to accelerate tax rises and spending cuts would: hit confidence; choke off our economic recovery; and make it harder to get the balanced investment and export-led recovery we need and to get the deficit down.

And so it has proved.

We have had the slowest recovery for 100 years, and, even as growth has resumed, GDP per head is not expected to return to its pre-crisis peak until 2017 – a lost decade of no real income growth.

As a result, government borrowing is now forecast to be £75 billion next year.

This is why I have made a binding fiscal commitment that a Labour government will balance the books and deliver a surplus on the current budget and falling national debt as soon as possible in the next Parliament.

It will require tough decisions to cut public spending and social security spending, as well as a fairer tax system.

And we need immediate action to boost housing supply to stop the recovery becoming more unbalanced and get long-term unemployed young people back to work.

But alongside the immediate short-term challenges that economic policymakers face here in Britain, we have deep structural issues to resolve.

Because as the IMF annual report revealed, this UK recovery has been characterised by particularly low productivity growth.

I mentioned earlier that the UK has seen a marked increase in low-paid work.

Over the last few years, the number of people working part-time who want to work full-time has gone up 300,000 to 1.4 million, with growing numbers also employed on contracts with no holiday pay, sickness pay or even a guarantee of hours.

At the same time, too many university graduates are struggling to find work to match their endeavours. Britain now has more overqualified workers than any country other than Japan.

And inequalities are becoming more deeply entrenched.

Today, only one in eight children from a low-income home goes on to achieve a high income as an adult.

As Alan Milburn’s Commission on social mobility reported recently:

“Without action, there is a real danger that social mobility – having risen in the middle of the last century then flat-lined towards the end – could go into reverse in the first part of this century.”

This is not the only cause for concern.

Business investment is slowly starting to recover…

… but it is still £6.1 billion a year below its pre-crisis peak and is the fourth lowest in the EU as a share of national income– only above Cyprus, Greece and Ireland.

… our export growth since 2010 is 6th in the G7, 16th in the G20, and 22nd in the EU.

… business expenditure on R&D is the lowest in the G7 as a percentage of GDP.

… while infrastructure investment is down 12.2% compared to 2010 and public investment is set to contract again next year.

… and still just 8% of all employers – including less than a third of the biggest firms – offer apprenticeships to give young people a route into work.

A NEW INCLUSIVE PROSPERITY FOR THE 21st CENTURY

So how do we respond?

Some say that if rapid globalisation and technological change have undermined the pay and prospects of working people, then the simplest thing to do is to turn our back on those economic forces.

By putting up trade barriers.

Stopping migration into Britain.

And leaving the European Union.

In my view, Britain has always succeeded, and can only succeed in the future, as an open and internationalist and outward-facing trading nation, with enterprise, risk and innovation valued and rewarded.

Backing entrepreneurs and wealth creation, generating the profits to finance investment and winning the confidence of investors from around the world.

Turning our face as a nation against the rest of the world and the opportunities of globalisation is the road to national impoverishment.

But at a time when, in the face of these powerful global changes, many people in our country are seeing their living standards falling year on year, we cannot take public support for this open, global vision of a dynamic market economy for granted.

I know, as an MP with, until recently, the largest BNP membership of any constituency in the country, how some on the extremes of left and right see the solution to be isolationism, turning inwards.

But they are wrong.

Open markets and business investment are part of the solution, not the problem – as is Britain properly engaged in a reformed Europe.

But as we were told loudly and clearly at the local and European elections, we cannot just bury our heads in the sand and ignore the legitimate and mainstream concerns of people across our country that our economy is not currently working for them and their families.

That is why when I hear people denying there is a cost of living crisis, or suggesting that that the return to growth in the economy will solve the problem, I fear they just don’t get it.

A return to business as usual won’t work.

It won’t work economically. There is no future for the UK in trying to compete on cost with emerging countries round the world.

It won’t work politically either. Cutting workers’ rights, undermining public services and reducing taxes only at the top in the hope that wealth will trickle down will not persuade a sceptical and hard-pressed electorate.

New times demand a new approach.

And I want to set out three ways that I believe that a new inclusive prosperity for the 21st century must be different from the approach taken in the 1990s:

- first, we need tougher global co-operation;

- second, we need good jobs and skills, especially for those being left behind;

- and third, we need a new industrial policy.

Let me take them in turn.

HARD-HEADED INTERNATIONALISM

First, to deliver an inclusive prosperity, we need a much tougher international response to these global trends.

We have to show that we understand and can respond to people’s concerns about financial instability, immigration and tax avoidance.

But we must do this while staying open to the world and continuing our commitment to a dynamic market economy.

I call this a hard-headed internationalism.

And it must start with Europe.

We know that we need reform of the EU to deliver value for money for taxpayers and to make Europe work in our national interest.

But it is not in our national interest to walk away from the huge single market on our doorstep. To do so would be anti-investment, anti-jobs and anti-business.

And nor is it in our national interest to have a Prime Minister who, playing to a domestic and Eurosceptic gallery, flounces out of vital summits and thinks that splendid isolation is a sign of strength, when everyone else can see it is really just a sign of weakness.

Instead of marginalising ourselves with fringe parties, isolating ourselves from key allies and failing to deliver the right Commission President for Britain, we should be at the centre of the debates that provide the modern rationale for our cooperation with Europe.

And we need that cooperation to make progress in vital areas, including on security, trade and climate change.

On financial regulation, we need new impetus to global efforts to reform our financial system which are grinding to a halt.

This means making progress on the agreements reached at the G20 summit in 2009, which included tough new principles on pay and compensation where very little progress has been made.

On immigration, too, we need greater international cooperation so that we can keep the benefits of skilled migration, while controlling and managing it fairly.

This means new laws to stop agencies and employers exploiting cheap migrant labour; while also making sure people who come to this country learn English and contribute to Britain.

While in Europe, we need longer transitional controls, stronger employment protection and restrictions on benefits.

Because when we face such an acute challenge to make work pay for unskilled people, we should not be subsidising unskilled migration from the rest of the EU.

And on business taxation, we also need greater international cooperation to strike a fairer deal for the future.

Today, after extensive consultation, Shadow Exchequer Secretary Shabana Mahmood and I are publishing Labour’s approach to business taxation.

We believe our business tax system must be competitive, promote long-term investment and innovation, and be simpler, predictable and fair.

The last Labour Government left Britain with the most competitive rate of corporation tax in the G7 and we are committed to maintaining that position.

But unlike George Osborne, we also recognise that companies are just as concerned about other elements of the business tax regime, such as capital allowances and business rates.

That is why, having started and supported successive cuts in corporation tax over the last 15 years, we do not think the right priority is a further cut next year.

We will, instead, cut and then freeze business rates for more than 1.5 million business properties.

When resources are tight this is a tough choice to allow us to support more businesses and keep our overall business tax regime competitive.

The purpose of a competitive tax system must be that companies view Britain as a great place to do business, not simply a cheap place to shift their profits.

So Labour’s approach will be to develop a business tax system that promotes long-term investment, supports enterprise and innovation, provides a stable and predictable policy framework for business and which is founded on fairness. With this approach Britain can compete in a race to the top, with a highly skilled, productive workforce directly benefiting from sustainable economic growth.

Our tax system must tackle the short-termism that has become an entrenched feature of the UK business environment and instead promote the long-term investment we need to create more good jobs for the future.

So we are examining the case for introducing an Allowance for Corporate Equity, along the lines suggested in the Mirrlees Review, to redress the systemic bias in favour of debt finance.

Such a scheme would offer a strong incentive for long-term investment, building more robust businesses that would be better able to plan for the future. We will consult with business and other stakeholders on the case for introducing this reform, and how it might be implemented.

We will also examine the possibility of structural changes to the tax system to incentivise long-term investment.

In his report on short-termism in British business, Sir George Cox recommended a series of reforms including a lower rate of capital gains tax for long-term investors.

This could complement an Allowance for Corporate Equity, by making long-term investment attractive to the investor as well as to the recipient of funding.

Labour is consulting with industry on the potential impact of these and other recommendations of the Cox Review and how they could be delivered in a revenue-neutral way.

At a time when working people are facing a cost-of-living crisis and the deficit is high, it’s vital that everyone pays their fair share and we restore public trust in the tax system.

High profile cases of tax avoidance have undermined both public trust in company taxation and also hit businesses who play by the rules and pay their fair share.

George Osborne is failing to tackle tax avoidance. The most recent figures from HMRC show that the amount of uncollected tax in our economy – the ‘tax gap’ – went up last year.

This isn’t good enough, so Labour will make reversing this trend and narrowing the tax gap a priority for HMRC.

So the next Labour government will act to tackle tax avoidance including through international leadership in the G20 and the OECD and by closing loopholes, increasing transparency and ensuring we have tougher independent scrutiny of the tax system.

WORK AND SKILLS

The second task for our inclusive prosperity agenda is to provide good jobs and skills for everyone and especially for those who feel they have been left behind.

To equip people without skills for the world of work and to meet the challenge of ever faster technological change, we have to raise skills and productivity in every sector and ensure that work pays.

Demand for high skilled jobs in advanced manufacturing, financial and business services, and across the creative industries will continue to increase.

So we must maintain our global excellence in Higher Education.

But so too must we ensure that the highest skills can be achieved through our vocational system. We cannot just meet the shortage in trained technicians that businesses repeatedly highlight by importing labour.

Those with intermediate skills are most at risk of the ‘hollowing out’ phenomenon. We must help equip them to take up new opportunities as baby boomers retire and ensure the skills they have developed are recognised by prospective employers.

In lower skilled sectors, we must ensure that the minimum wage continues to increase, is properly enforced and that employers have clear incentives to pay a living wage – with tax credits an added reward for hard work rather than a subsidy for low pay, and training available to all to support career progression.

And we must ensure that young people entering the world of work have the ambition, skills, knowledge and qualifications they will need to succeed.

We must improve careers advice in every school.

We need a major expansion of university technical colleges to ensure Britain is producing enough trained technicians in STEM subjects and other subjects where there is clear demand.

We need to get young people into training rather than unemployment, as Rachel Reeves has championed, and improve the quality of apprenticeships, so that they are focused primarily on taking young people to level three and beyond.

We need a greater role for employers in designing vocational qualifications.

And employers must also have a key role in commissioning and planning skills provision in their area.

A NEW INDUSTRIAL POLICY

And third, to deliver inclusive prosperity, we need to match policies for open markets and skills with a new industrial policy which puts innovation, long-termism and growth centre stage.

After the debacle of British Leyland in the 1970s, ‘industrial policy’ have been dirty words in Britain.

Some remain cautious about the politics of ‘picking winners’ – but that misses the lesson of the 1970s. Back then, it was the industrial losers who did the picking and good money was poured after bad.

Although she kept quiet about it, Mrs Thatcher had an industrial policy in the 1980s as she unveiled the Big Bang for financial services, brought Japanese car manufacturers to Britain and invested heavily in Airbus and its supply chain, including Rolls-Royce.

Twenty years ago, as we responded to globalisation, Labour also steered clear of talking openly about industrial policy.

Instead, with our economy returning to full employment, we focussed on providing macroeconomic stability and reforms to increase competition, encourage enterprise, support science and improve skills.

But since the global financial crisis and following the pioneering work of Peter Mandelson as Business Secretary, a consensus has now emerged that focusing on specific sectors is not only essential; it is inevitable.

Chuka Umunna and I commissioned the Executive Director of Jaguar Land-Rover, Mike Wright, to build on this by telling us what we need.

His report last week on manufacturing and the supply chain made clear there is a clear role for government to give strategic direction, bring sectors together to foster long-term planning and tackle issues like the cost base and skills.

Vince Cable might have belatedly bought into his predecessor’s approach to industrial policy, but there are still glaring gaps.

Although the government is focused quite rightly on aerospace, automotive and some low carbon technologies as part of their eleven industrial strategies, there are glaring gaps.

Why is there no place for the creative industries? No sector aside from real estate has grown faster in recent years. From Americans watching Downton Abbey, to Asians listening to Adele, to Africans tuning into the Premier League, British content is global content.

It’s for this reason that Harriet Harman and Chuka Umunna commissioned John Woodward, former Director of the UK Film Council, to carry out a creative industries and digital review, which will report in the next few months, with a strategic review of industrial policy every five years.

And while the government focuses on life sciences – which are a major British asset – why is there so little focus on health and social care?

Both sectors employ many more people, mostly in low paid jobs, and the ageing population is creating significant additional demand.

And then what is the government doing to support regional growth?

From Silicon Valley to the City of London, the world’s best industries tend to be clustered. In the UK, our automotive sector is concentrated in the Midlands and North East; the offshore wind sector brings jobs to many coastal regions; aerospace is predominantly based in the North West; and our creative industries are centred major cities like London, Manchester, Bristol and Leeds.

The government cannot create clusters – but it can do a lot to support those that already exist, especially at the local level.

Tomorrow Lord Adonis will join Ed Miliband to set out the results of his work.

He will set out how we should nurture help small business thrive, ensure innovation flourishes and empower independent and properly funded Local Enterprise Partnerships alongside Combined Authorities.

We will examine all of his proposals but will transfer £30bn of funding to city and county regions over the course of a parliament to achieve his vision.

And Andrew and I are working closely on how taxation can be used as a tool to drive growth and investment in city and county regions.

At a national level, we also need clear long-term direction.

We need action, as Sir George Cox’s report said last year, on boardroom pay, and corporate governance.

We need more competition in banking and a British Investment Bank to support small and growing companies.

We need an independent infrastructure commission, as Sir John Armitt has proposed, to put aside the dither and squabbling that has dogged our approach to infrastructure for decades.

And we need a new long-term framework for science and innovation.

Mike Wright and Lord Andrew Adonis’s reports have both looked carefully at Government support for innovation and science. They both come to similar conclusions, in particular that the ten year framework for science funding, set up by Lord Sainsbury as science minister , and which ends this year, has provided the stability and long-termism that our research base and companies need.

Liam Byrne launched a consultation on how we can build on this last week.

I believe that a similar long-term funding framework for innovation policy, covering initiatives like the Technology Strategy Board and catapult centres, will be equally important to delivering an inclusive prosperity.

And I am determined to ensure that long-term funding frameworks for science and innovation will emerge as key conclusions from Labour’s Zero-Based Review of spending priorities.

CONCLUSION

I started by saying that, in the face of seismic global and technological changes, stagnating median incomes and rising inequality, our challenge is to earn our way out of this deep-seated cost of living crisis.

We must deliver rising prosperity for all, not just a few.

That means creating more good jobs, boosting skills and encouraging long-term investment as we restore the broken link between the wealth of the nation and family finances.

As Ed Miliband has said, Labour’s approach is about big reforms, not big spending.

A new plan for Britain and business to succeed together.

Pro-business, but not business as usual.

Not laissez faire complacency…

… or protectionism and anti-Europeanism.

But together building a long-term consensus to embrace open markets…

…and to work together to secure the skills, long-term investment and market reforms we need to deliver rising prosperity for all.

Because if we are to maintain public support for an open market economy, we need to address public concerns, promote competition and long-term investment and make sure markets like energy and banking work better for consumers and businesses alike.

That is the One Nation approach that Ed Miliband, my Shadow Cabinet colleagues and I will set out in the days, weeks and months to come.

…hard-headed internationalism…

…more good jobs and skills for everyone…

…and a new industrial policy….

A new inclusive prosperity for the 21st century.

I do believe the future of our country depends upon it.

Posted June 30th, 2014 by Ed
June 29th, 2014

Transcript of Ed’s interview on The Andrew Marr Show

ANDREW MARR:
Now with the recovery apparently on course, unemployment falling, inflation low, is
it time for a change of emphasis from the opposition? Will the cost of living crisis feel
as acute by the time of the General Election? Well Ed Balls is with me now. That
really is the first question, isn’t it? Things are getting much better. You’re going to
have to change your tone, if not your policy.

ED BALLS:
Well the European Elections were a wake-up call for politicians in all parties because
the country said look, you may say there’s a recovery, Andrew, but there’s not a
recovery for me, for my family, our community. Living standards are falling month
on month. They have been for years and they’re not getting better, and I think out
there in the country people are saying – and this is the new argument – who will
actually deliver an economy which works for me? And they’re not saying George
Osborne. We’ve got to win the argument. Labour’s got the ideas and the vision to
answer that question.

ANDREW MARR:
But economic confidence, or optimism rather, is now at 50 per cent and rising.
Unemployment is getting much lower. You know inflation is not a problem. You’ve
got another sort of ten months or so before the election with consistently probably
good economic news. You can’t simply just say it’s all terrible, can you?

ED BALLS:
No, but I’m saying to you, Andrew, the way you just described it is not how people
see it in our country. Their living standards have been flat and stagnant for now over a
decade and that’s carrying on because people are worse off this month than last
month. So George Osborne can say complacently my plan is working. Most people
are saying well that just makes you completely out of touch and is right – there is a
deep issue which we’ve got to solve, which is how we make sure if the economy gets
better, that’s actually shared with most people in our country. And I think that needs
big reforms. That’s what Ed Miliband and I are setting out.

ANDREW MARR:
Yes.

ED BALLS:
I think it’s really complacent to say things are going well at the moment because most
people are saying that’s not really true.

ANDREW MARR:
So Jon Cruddas in The Sunday Times this morning says it is the big reforms that are
being parked. You’re saying no, no, we have to have some big reforms, so let’s talk
about some. What about your plans for the North in particular? You’ve got a speech
this week. Andrew Adonis has been working on some big plan. You’re going to take,
what, 30 billion from central government and give it to the big Northern cities. Is that
right?

ED BALLS:
Yes and we’re going to come up with big ideas. And just to answer that question, look
I understand Jon Cruddas’ frustration about a newspaper headline. We’ve all been in a
situation where a big report or a big speech is reduced down to just one policy. Jon
Cruddas, with me and Ed and others, has been working for months, years on big
reforms. They’re going to come out in the next few months. People will see the policy
review he has led has been a big deal. One aspect of that is saying if we’re going to
have growth and jobs, not just in London and the South East – four fifths of the new
jobs have been in London since 2010 – we’ve got to have more devolution of power
to our cities and to our county regions, more devolution of housing spending, job
spend, skills, business support. The local economic partnerships that government set
up are a sham. We will reform.

ANDREW MARR:
(over) So why is he talking about … why is he talking about the “dead hand of the
Labour centre”?

ED BALLS:
I don’t think he is because, look, he is part …

ANDREW MARR:
(over) He is. That was his phrase.

ED BALLS:
(over) … of the Labour centre and we are all working together on these big reforms.
Look, it’s always, as I said, going to be frustrating …

ANDREW MARR:
(over) “Cynical nuggets of policy” was his other phrase. I mean it is quite an attack on
the way things have been going, from a frustrated man quite clearly.

ED BALLS:
I think … Look I talked to Jon a couple of days ago. He’s not frustrated. He’s excited
about his policy agenda. He’s frustrated the way in which one report of 250 pages gets
reduced down into one headline.

ANDREW MARR:
(over) So it’s our fault really.

ED BALLS:
Look it’s the way we live in the world we live and that’s how it goes. But I think
we’ve got big ideas, big devolution. We’ve got reports this week on long-term
infrastructure spending and new manufacturing industrial policy, new investment in
skills. Big changes which, let’s be honest, aren’t really on George Osborne’s agenda.

ANDREW MARR:
Well let’s talk about one big change where last time Ed Miliband was on, he said that
the current system of rail privatisation was not working for the country and he was
open to offers. There’s been a lot of talk about kind of creeping nationalisation – doing
it one by one by one, as happened to the East coastline. Is that on your agenda?

ED BALLS:
Well, look, we want a more strategic approach to the railways, definitely, and the fact
that Network Rail has now come back onto the government balance sheet provides an
opportunity for that. But I think actually the franchising process of the last years has
delivered more passenger numbers. There’s been big public investment as well. But
actually in the East Coast, there a public operator has been doing a really good job, so
we’re going to look at what we can do.

ANDREW MARR:
So why not spread that idea?

ED BALLS:
Well look what we want to say is, without ideology, we’re not going to say this is
about nationalisation or privatisation. Let’s make sure the franchising process in the
future gets the best deal for the taxpayer and the best deal for passengers and on fares,
matching investment with reform. And I’m not going to say it’s a matter of a
ideology. That should always be private or always public. If the East Coastline wants
to bid into that process, that’s a good thing.

ANDREW MARR:
You’d like to see more investment in infrastructure, however. Andrew Adonis has
been one of those people who’s behind your big policy review saying you could
simply take back the railway system, bit by bit by bit, by not reopening the bidding
process when one franchise comes to an end.

ED BALLS:
Well, as I said, I think it’s a good thing for us to say in the bidding process we’re
happy for private and East Coast to bid into that process on a level playing field. I’m
not going to take an ideological approach. I don’t want to go back to the
nationalisation of the 70s. I think many people would say that some of these
franchises have operated in a pretty unfair way to consumers and in the East Coast it
failed. So let’s get to a level playing field, not be ideological.

ANDREW MARR:
But we’re not going to see any great big renationalisation of the rail system under
Labour?

ED BALLS:
I don’t think people want to go back to the British Rail of the 70s and the 80s.

ANDREW MARR:
That’s not quite what I was saying. Not the British Rail system, but an overall state
owned system with lots and lots of different companies inside it.

ED BALLS:
There is big public investment going in currently to attract infrastructure which is now
state owned and on balance sheet because Network Rail is there. And that investment
is going in from the public sector. What we want to know is we’re getting value for
money and the best deal on fares and for passengers for the future, and the right way
to do that is to say let’s have a competitive process on a level playing field. But I’m
saying to you look if East Coast – which is currently in public ownership or a franchise
which is not a private franchise – can bid into that process, that’s a good thing.

ANDREW MARR:
Right, so we may see a creeping system of effective nationalisation. But we won’t
carry on talking about that because we’re running out of time.

ED BALLS:
Well, as I said, it’s a national system already.

ANDREW MARR:
Alright. So let’s move to Europe, which is the other great big story of the week. Do
you think that Britain is heading towards the exit door?

ED BALLS:
Well David Cameron has told us that seems to be what he’s now doing after this
summit. I’m really worried about where we are. I think this weekend was a
catastrophe for Britain and the British national interest. I’ve never seen a negotiation
so cack-handed. Although to be honest, Andrew, from the Prime Minister who left the
EPP because his party demanded it, walked out of a summit two years ago because he
was bowing to party pressures, what did you expect? We won’t be influential in the
world unless we are influential in Europe, and we’re now being ignored in …

ANDREW MARR:
(over) So would you not have fought the Juncker battle? Would you have allowed
Juncker’s name to go forward as a government?

ED BALLS:
Look, we would have gone into that summit and said what is our vision for Europe?
We need reform and the test is who can deliver that reform?

ANDREW MARR:
That is what Cameron was saying.

ED BALLS:
No he didn’t. He went into the summit and said you’ve got to give me something
because my party demands it and I need the head of Jean-Claude Juncker. And what
happened was people in the rest of Europe said we’re not going to be treated in that
way. You can’t dictate to us on the basis of a party …

ANDREW MARR:
(over) But given that Jean-Claude Juncker is a kind of avowed old-fashioned
federalist, you can see why he didn’t think that Juncker would be the right man to be
leading the EU in the next few years …

ED BALLS:
Sure.

ANDREW MARR:
He was right about that. Was he right about that?

ED BALLS:
And that was our view. The issue is, Andrew, why did he fail so catastrophically to
persuade anybody to join him? He says in private they were supporting him and in
public they didn’t. What has happened when the British Prime Minister can’t win an
argument because if he’s associated with it other people have to peel away. And what
it tells you is …

ANDREW MARR:
(over) I’m just slightly unsure how you’d have done it differently. That’s all.

ED BALLS:
We’d have gone in and said we need to have reform in Europe. And we’ve have said
the test for this is which candidate can deliver that reform. I don’t think Jean-Claude
Juncker was the best candidate, but David Cameron …

ANDREW MARR:
(over) But you wouldn’t have demanded his head?

ED BALLS:
Well I think to go in that way and attempt to blackmail our European partners …

ANDREW MARR:
(over) So it was about tone and tactics, not about picking the battle? The battle was
right; the way it was fought was wrong?

ED BALLS:
Well of course, but it goes to a deeper point, which is, ‘what is David Cameron’s
European policy?’ Does he think we should be in Europe? I do, and I think that we
will only be influential in the world if we are influential in Europe. Does he want
reform? He says he does, but he can’t tell us what his reforms are. He set an arbitrary
timetable for a referendum which everybody knows is deeply destabilising. And why
has he done that? Because European policy is not being decided by the national
interest, Britain’s future jobs and investment, but by what Tory backbenchers are
demanding. He’s weak, he’s lost control, he’s on the backfoot …

ANDREW MARR:
(over) Go on, tell us what you really think. Okay.

ED BALLS:
Well I think it’s catastrophic for Britain.

ANDREW MARR:
And are the Labour Party really going to come forward and argue more vociferously
for Europe because you know if there is going to be a referendum somebody
presumably is going to have to take that role? The Liberal Democrats say Labour
can’t. Will Labour?

ED BALLS:
Labour is absolutely united. We want to stay in Europe but we want reform. Tough
reforms, reforms to immigration rules, reforms to the CAP, to the Budget. But a year
ago, but a year ago, Andrew, David Cameron said, “I’m going to launch the
pro-European campaign.” Twelve months on, that looks to be a complete sham. Only
Labour will go into this …

ANDREW MARR:
(over) And to be absolutely clear, Labour’s position on a referendum after the next
election is no – not unless there is a huge change?

ED BALLS:
Any transfer of powers from Britain to Brussels, we’d have an in/out referendum.

ANDREW MARR:
Otherwise not.

ED BALLS:
No.

ANDREW MARR:
Right, that’s very clear.

ED BALLS:
But setting an arbitrary timetable now for a referendum in two years’ time is deeply
destabilising, bad for business, bad for jobs, bad for investment, bad for Britain. The
right thing for us to do is to argue for reforms, but we’ve got to be listened to and
we’re not being listened to at the moment.

ANDREW MARR:
We’re not because we’ve run out of time. Ed Balls, thank you very much indeed for
that.

ED BALLS:
Thank you.

Posted June 29th, 2014 by Ed's team
June 28th, 2014

Fantastic Armed Forces Day in Robin Hood

For my annual Armed Forces Day coffee morning today  I joined local residents and members of the armed forces community for coffee, cakes and a round of bingo.  It’s always a wonderful occasion in which people come together to show their appreciation for the work of our armed forces and our support for veterans and the families of those serving overseas.

Kalvinder and her husband arrived proudly carrying a photograph of their son who was spending Armed Forces Day serving in the Royal Air Force in the Falkland Islands. Veterans displayed their medals. And everyone chipped to the raffle to raise funds for the local branch of the Royal British Legion.

I hold an event for Armed Forces Day in the constituency each year. As well as tea, coffee and cakes – which this year were kindly sponsored by the local Morrisons – we also always have a raffle and this year raised £204 in funds for the Royal British Legion.

Congratulations to Peter Aldred on winning the star prize – a special limited edition Royal Air Force plate. And to the lady from Robin Hood who (eventually) won House of Commons chocolates in the bingo. And thank you everyone who was able to come along and show support.

Posted June 28th, 2014 by Ed
June 25th, 2014

The Office for Budget Responsibility should be allowed to audit election manifestos of the main parties – my article on Politics Home

Over the last four years the Office for Budget Responsibility (OBR) has become an established part of the framework of British economic policy with broad-based and cross-party support.

I believe now is the right time to enhance the role of the OBR to help restore trust in politics. So in an Opposition day debate in the House of Commons today I will argue that the OBR should be allowed to independently audit every spending and tax measure in the manifestos of the main political parties.

I want that tough, rigorous and independent scrutiny for Labour’s election manifesto and I believe the Tories and Lib Dems should be willing to subject their manifestos to such an audit too.

Because in tough times it’s even more important that the policies of all the parties are properly costed and funded. People rightly want to know that the sums add up.

But to give the OBR the legal power to do this before the next election we need cross-party support for my proposal.

The policy has already won the support of some Conservative and Lib Dem MPs. The Conservative Chair of the Treasury select committee Andrew Tyrie has been a long-standing advocate of this reform and says the idea could “enhance the quality of public debate on tax and spend”.

The Liberal Democrat Chief Secretary to the Treasury Danny Alexander has said it is “well worth further consideration”. And the Chairman of the OBR himself Robert Chote believes “independent scrutiny of pre-election policy proposals could contribute to better policy making, to a more informed public debate”

Back in 2010 George Osborne suggested he was interested in the idea and said that it was “a legitimate matter for the House to debate and decide”. Sadly, now that the election is approaching, he seems to be resisting it.

Robert Chote has said cross-party agreement would be needed by the early summer to do this for next year’s manifestos. He has told me that an in principle agreement would be needed by this end of this month, so it could still happen if MPs do the right thing today.

George Osborne should change his mind, stop playing politics and stop blocking this important reform. If he fails to do so people will rightly ask – what is he so scared of?

Posted June 25th, 2014 by Ed