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
June 23rd, 2014

A mansion tax will make the housing market fair for all – my article in the Evening Standard

A house is, for most of us, the biggest thing we will ever buy, the most long-term investment we’ll ever make. Buy or rent, we need a place to live we can afford and which we can make our home.

So how the housing market works really matters. And it’s not currently working too well. House prices are soaring out of reach for many. And while foreign investors continue to buy up multi-million-pound properties, for everyone else the prospect of an early rise in mortgage rates is now on the cards.

What should we do? The first big problem is that the supply of housing is simply not keeping up with rising demand. For decades we have simply not built enough homes. Ed Miliband and I are determined to put that right — here in London and across the country — by getting at least 200,000 new homes built a year by the end of the next Parliament.

Getting more homes built is essential if we’re to tackle the deep-seated cost-of-living crisis and secure a strong and balanced recovery that is built to last. So we will commit to a new generation of new towns and give real Treasury guarantees to get them off the ground. We need to match a reformed Help to Buy scheme with a Help to Build scheme for small and medium-sized builders.

We should be giving towns a right to grow and ensuring land with planning permission is built on quickly. And Sir Michael Lyons’s review for Labour will soon set out more of the reforms that need to be made.

I have spent the past four years urging the Chancellor to act to get more homes built. Revenues from the 4G licence auction should have been used to build 100,000 affordable homes — creating thousands of jobs and apprenticeships too. But on his watch we’ve seen the lowest peacetime level of housebuilding since the 1920s and the number of affordable homes built has fallen year on year.

This failure to act has made it harder than ever for the aspirational majority who want to own their own home to get on the ladder. And this imbalanced housing market now poses risks to the wider economy too.

A premature rise in interest rates to rein in the housing market in some parts of the country will have an impact on millions of families and businesses across the UK. The Chancellor’s aides have told the newspapers he is “relaxed” about the prospect, but millions of homeowners already struggling to make ends meet won’t be quite so laid-back.

The second challenge faced by London in particular is that so many people are buying properties solely as an investment and not as homes to live in. Overseas buyers who are snapping up property in the capital are not only pushing up prices but I believe are also failing to make a proper tax contribution in this country.

This unfairness needs to be put right. That is why Labour’s shadow housing minister Emma Reynolds has set out plans to tackle the number of empty homes, including ensuring properties are always advertised in this country first.

And it is also why we have proposed a tax on properties worth more than £2 million. How can it be right that the foreign buyer last month of a £140 million flat in Westminster will pay just £26 a week in council tax — the same as the average-value property in that council area?

We would put the revenues from a tax on ultra-high-value properties to cutting income tax for 24 million working people on middle and lower incomes — including more than six million across London and the South-East — with a lower 10p starting rate of tax. This is part of our wider plan to tackle the cost-of-living crisis and balance the books more fairly in the next Parliament.

But I am clear that the mansion tax must be done in a fair way and follow three principles.

First, the tax must only apply on properties worth over £2 million and that limit must be raised each year. Instead of simply raising it in line with the overall rate of inflation it should be raised in line with average rises in house prices to ensure that more modest properties are not brought into the scope of the tax.

Second, there must be protections in place for people who do not have a high income but happen to live in an expensive property — for example because they are long-standing residents in areas that have seen dramatic rises in property values. We will look at a relief scheme or allowing those on modest incomes to defer payment until the property is sold. Labour will only support a mansion tax that is fair to those who are asset rich but cash poor.

Third, the tax must be progressive so that those with properties worth tens of millions of pounds make a significantly bigger contribution than those in houses just above the limit.

But it must also be administratively simple. The original proposal by the Liberal Democrats for a one per cent annual charge on the value of the house above £2 million would require detailed valuations each year and fails that test.

I believe a better way would be to use a banded system, which avoids the need for detailed annual valuations. A banded system — £2-£5 million, £5-10 million, £10-20 million and over £20 million — already applies to the Government’s new tax on properties bought through companies.

In fact, we know the Government has done detailed work on how a mansion tax would work. Ministers should publish it now so that we can have a proper debate on how to do this in a fair and proportionate way.

Getting more houses built, cutting income tax for working people through a new 10p starting rate and making sure foreign buyers make a proper tax contribution to this country. This is how we tackle the housing crisis, back millions of Londoners and get the deficit down in a fairer way.

Posted June 23rd, 2014 by Ed
June 22nd, 2014

The union is the most successful multinational state in the world – my article in the Sunday Times

The union between Scotland, England and the rest of the UK is the most successful multinational state in the history of the world. For three hundred years, that union has sustained and deepened a single market based on open and barrier-free trade and mobility which has secured investment and jobs and a deep economic integration between our countries.

And that single market has been made possible only because we have made a success of one the world’s longest lasting and most successful single currencies – underpinned by a fiscal union, banking union and a common income and corporate tax system which shares burdens and pools risks. The Euro single currency struggled to survive after just a decade of existence. Our single currency has worked since 1710.

No wonder, then, that this September’s vote is of such great importance and concern, not just to Scotland but to all of us across Britain. Because a Yes vote is not a vote for continuity but for radical and jarring change.

And so closely bound are the nations of our isles that the break-up of the UK will not just be bad for Scotland, it would be bad for England, Wales and Northern Ireland too.

A Yes vote in September would, of course, mean the end of this multinational state. The UK would continue, but without Scotland as a member.

And Scotland leaving the UK will inevitably, radically and rapidly change our economic relations.

Today, firms in the UK have access to a home market of over 63 million people. That means they can buy and sell goods without any barriers. We share a currency, a regulatory regime and membership of the European Union.

Scotland trades more each year with the rest of the UK than with the rest of the world combined. It’s not just because we are closer geographically, but because there is nothing getting in the way of that trade. The physical border between Scotland and England is utterly irrelevant economically because both nations are part of a bigger unit.

But this deep and integrated single market will not survive a Yes vote. It is inevitable that a move to different corporate tax systems, labour standards and migration policies will increasingly, and rapidly, create barriers to trade and investment that will put these jobs at risk.

The weakening of our single market will also be accelerated by the end of our common currency area. A Yes vote in September will, by definition, bring to an end our fiscal union and banking union. Scotland will set its own tax and budget policy. Taxpayers in the rest of the UK will no longer guarantee Scottish bank deposits. The Bank of England will no longer be the lender of last resort for Scottish banks.

In these circumstances, trying to struggle on with a common currency area is impossible. It would be economically dangerous and politically undeliverable. That is why if Scotland leaves the UK there would be no deal to share the Pound. Because a currency union wouldn’t be in the interests of Scotland or the continuing UK. Currency unions without fiscal or banking unions don’t work. We need only look at the problems in the Eurozone to see that. Common currencies require deepening economic and political integration. A Yes vote takes us in the opposite direction.

The referendum on the future of Scotland is rapidly approaching. With less than 90 days to go, we are now at the business end of the campaign. It’s a time for people to speak out without fear. The stakes are too high for those with a view to remain silent.

And yet when we need an open and honest debate, instead Alex Salmond belittles any expert or employer, no matter how eminent or respected in their field or industry, who dares to criticise his economic plan for breaking up one of the most successful unions the world has ever known.

What we need to hear now from Alex Salmond is not why he alone is right and everybody else is wrong. The First Minister must set out his Plan B for what would replace the Pound in a separate Scotland. Would it be the Euro or a separate unproven currency?

Of course, this decision is for Scots alone to make. I do not have a vote, but like so many people living elsewhere in the UK I do have a voice. I passionately believe that the brightest future for Scotland and the whole of the UK is for our country to continue working together.

This is not merely about three hundred years of history and economic ties. To break up the UK now is to swim against the tide of history.

We live in an increasingly interdependent world, where the best way to tackle the big economic challenges is to break down barriers to trade, not create new ones.

Turning partners into competitors isn’t the solution to tackling the big economic challenges we face. To best take advantage of the opportunities of the future, we must stay together.

Posted June 22nd, 2014 by Ed
June 21st, 2014

Labour to force Commons vote on independent manifesto audits

Labour will this week challenge the Conservatives and Lib Dems to back a plan that would see party manifestos at the next election independently audited.

Ed Balls MP, Labour’s Shadow Chancellor, wants the Office for Budget Responsibility – the Government’s independent budget watchdog – to scrutinise the spending and tax commitments made by the main parties at the next election.

In an Opposition Day debate in the House of Commons on Wednesday, he will call on the Chancellor George Osborne to back the plan and force a vote in Parliament.

Ed Balls said:

“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.

“That’s why I want every spending and tax measure in Labour’s manifesto to be independently audited by the Office for Budget Responsibility. And I believe the Tories and Lib Dems should be willing to subject their manifestos to independent scrutiny too.

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

“This policy has already won the support of some Conservative and Lib Dem MPs. George Osborne used to say he was interested in this idea. But 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. This week’s debate is George Osborne’s last chance to stop blocking this important reform. I hope he will change his mind and do the right thing.”

Posted June 21st, 2014 by Ed's team
June 20th, 2014

Reserve your family’s summer newsletter here

With summer finally here, many local families will be making plans for the long summer holidays in a few weeks time. For the lucky ones the summer will include a family holiday either here in the UK or abroad. But for many families getting away this summer just isn’t an option. I know from my casework how difficult things still are for very many local families with many jobs still under threat and prices for many everyday essentials still high.

Local agencies tell a similar story. When I called into the Children’s Centre in Gildersome recently, Centre Manager Bernard told me how tough it is for many local families and how the centre is doing what it can, despite big cuts in its budget. As well as regular activities and drop in sessions for parents of under 5s, the centre also now offers fresh fruit and veg at cost price to help families struggling with the cost of their weekly shop.

Of course with less money around, there is less support for families via our children’s centres. But I know that over the summer the Gildersome Centre, along with Morley South Children’s Centre at Sevenhills and the Morley North Children’s Centre from its new home in Morley Town Hall will all be offering as much support and activities for families as they can.

And as usual, I’ll be compiling my annual families’ summer newsletter and survey with details of all the events and activities taking place at Children’s Centres and elsewhere over the long summer holidays. Please email me at ed@edballs.com or contact my office on 0113 253 9466 to reserve your copy.

Posted June 20th, 2014 by Ed
June 20th, 2014

Apprenticeships at Yarwood Leather in Morley

Local families lucky enough to be getting away for a summer holiday this year will probably spend the flight wondering whether they’ve packed everything or looking forward to a nap on the beach. But anyone flying on Ryan-Air will also jet off on their holidays sitting on seats made right here in Morley.

Yarwood Leather off Gelderd Road in Morley is a small local firm who manufacture and distribute leather for aeroplanes seats as well as for the automotive and marine sectors. It’s a competitive industry but the company are doing really well, exploring new markets in the Far East and winning new contracts – as well as fitting out Ryan-Air’s Bargain seats. That’s all great news back home in Morley as it means new jobs and investment.

Managing Director John Nicholls contacted me because the firm were expanding and wanted to take on young people in apprenticeship roles. As well as taking up their case I wanted to see for myself what goes on at their Morley headquarters.

As readers can probably imagine, the health and safety standards for seats on aeroplanes are high – and the leather and fabrics used have to go through a rigorous testing process – all of which can be done right here in Morley. Once tested, leather is then cut and packaged for delivery to fitters. And it’s not just manufacturing either. Because they want to stay at the top of the game, Yarwood Leather also invests in research and development so that their products can be constantly refined to meet the latest standards of safety and performance.

It’s good to see a local firm doing so well. And because they’re expanding, Yarwood are also actively taking on and training young people which is brilliant news. The last few years have been tough with long-term youth unemployment rocketing and thousands of local young people not getting the chances they need to get on and do well. Thanks to companies like Yarwood, opportunities are now coming through.

As young people complete their exams and make decisions about their futures, I’ve contacted all our local schools to make sure they’re aware of companies like Yarwood who want increase the number of young people they take on with apprenticeships.

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

My Column in the Morley Observer

Local families lucky enough to be getting away for a summer holiday this year will probably spend the flight wondering whether they’ve packed everything or looking forward to a nap on the beach. But anyone flying on Ryan-Air will also jet off on their holidays sitting on seats made right here in Morley.

Yarwood Leather off Gelderd Road in Morley is a small local firm who manufacture and distribute leather for aeroplanes seats as well as for the automotive and marine sectors. It’s a competitive industry but the company are doing really well, exploring new markets in the Far East and winning new contracts – as well as fitting out Ryan-Air’s Bargain seats. That’s all great news back home in Morley as it means new jobs and investment.

Managing Director John Nicholls contacted me because the firm were expanding and wanted to take on young people in apprenticeship roles. As well as taking up their case I wanted to see for myself what goes on at their Morley headquarters.

As readers can probably imagine, the health and safety standards for seats on aeroplanes are high – and the leather and fabrics used have to go through a rigorous testing process – all of which can be done right here in Morley. Once tested, leather is then cut and packaged for delivery to fitters. And it’s not just manufacturing either. Because they want to stay at the top of the game, Yarwood Leather also invests in research and development so that their products can be constantly refined to meet the latest standards of safety and performance.

It’s good to see a local firm doing so well. And because they’re expanding, Yarwood are also actively taking on and training young people which is brilliant news. The last few years have been tough with long-term youth unemployment rocketing and thousands of local young people not getting the chances they need to get on and do well. Thanks to companies like Yarwood, opportunities are now coming through.

As young people complete their exams and make decisions about their futures, I’ve contacted all our local schools to make sure they’re aware of companies like Yarwood who want increase the number of young people they take on with apprenticeships

Of course, for many families getting away this summer just isn’t an option. I know from my casework how difficult things still are for very many local families with many jobs still under threat and prices for many everyday essentials still high.

Local agencies tell a similar story. I called into the Children’s Centre in Gildersome on Friday, Centre Manager Bernard told me how tough it is for many local families and how the centre is doing what it can, despite big cuts in its budget. As well as regular activities and drop in sessions for parents of under 5s, the centre also now offers fresh fruit and veg at cost price to help families struggling with the cost of their weekly shop.

Of course with less money around, there is less support for families via our children’s centres. But I know that over the summer the Gildersome Centre, along with Morley South Children’s Centre at Sevenhills and the Morley North Children’s Centre from its new home in Morley Town Hall will all be offering as much support and activities for families as they can.

And as usual, I’ll be compiling my annual families’ summer newsletter and survey with details of all the events and activities taking place at Children’s Centres and elsewhere over the long summer holidays. Please email me at ed@edballs.com or contact my office on 0113 253 9466 to reserve your copy.

Posted June 18th, 2014 by Ed
June 16th, 2014

Results of my spring survey 2014

Here are some of the results of my spring survey.

31% of those who responded feel worse off than they did before this year’s Budget Statement, 65% think that nothing has changed and just 4% feel that the pressure on their family budgets is now off.

People are also not optimistic about the future; 52% said they were ‘not at all optimistic’ about their family finances over the next year, 20% were not very optimistic, 5% were optimistic, with just 3% being extremely optimistic.

Finding a bit of extra money for emergencies is putting the greatest pressure on family budgets, followed by having enough money to make ends meet.

In terms of the energy market and energy prices, most pressing for people was the need for urgent reform of the energy market at 30%, followed by more power the regulator at 25%, freezing energy bills at 21%, increasing supply at 12% and more help for customers to switch at 12%.

Looking to the future people were most concerned about utility bills continuing to rise (52%), followed by wages continuing to stand still (22%), other cost of living pressures (14%) and increases in interest rates (12%).

You can read the full results of my sprint survey here: Results of my spring survey 2014

Posted June 16th, 2014 by Ed
June 12th, 2014

Only Labour can offer the long-term economic plan Britain needs – my article in the New Statesman

Indiscreet comments from warring cabinet ministers have dominated our political debate for the last week. But buried under the unseemly row between Michael Gove and Theresa May was another cabinet-level disclosure which was just as significant.

The previous Conservative chancellor Ken Clarke’s public admission that most people have “not yet felt any sense of recovery” blew apart the complacent claims of the current Chancellor that the economy is fixed and there’s no cost-of-living crisis. As the election results last month showed, Ken was right. Growing numbers of people do not think the economy or mainstream politics is working for them right now. In the face of stagnating living standards and growing insecurity, they want real but credible change, not more of the same.

This is a challenge for all mainstream parties. And unlike the Tories, it is a challenge that Labour is determined to rise to. Because, despite Ken Clarke’s candour, it’s clear that David Cameron and George Osborne still don’t think there is a problem to solve. The Conservatives seem to believe that simply repeating the line that their policies are working, because GDP growth has finally returned, will see them home and dry.

Put aside the fact their plan has so far totally failed to deliver what it promised – the books balanced by 2015, sustained rises in living standards, the AAA credit rating maintained, a re-balanced economy, and all being in this together. Looking forward, the challenge for all mainstream parties is that working people just don’t believe they will share in rising prosperity, whether that is affording a home, securing a better paid job or saving for a decent pension.

And they have good reason to be sceptical. The stagnation in real wage growth is not just a problem of the last few years. It started in Britain over a decade ago as rapid technological change and global trade pressures put the squeeze on middle and lower income households. And the UK is not alone – real living standards for middle and low income households have stagnated across the developed world.

While low-wage and unskilled employment has grown, research shows that traditionally middle-income jobs, in manufacturing and services, have fallen as a share of total employment across all OECD countries. And as the recent publicity around Google’s driverless car shows, labour-substituting technological change is, if anything, set to accelerate further.

The hard truth is that there is no quick fix – we have to earn our way to rising living standards for all. And we can’t turn our face against change and the world. 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.

But nor can we succeed through a race to the bottom – with British companies simply trying to compete on cost as people see their job security eroded and living standards decline. We can only succeed through a race to the top – backing British innovation and investing in the skills of all as we make our economy more dynamic and competitive, and earn our way to higher living standards for everyone.

That is why we need a real long-term economic plan to make the reforms needed now to ensure we have a strong and sustained recovery that is built to last and which delivers rising living standards for the many, not just a few at the top. First, on housing, we need to match rising demand for housing with rising supply. The next Labour government will get at least 200,000 new homes built a year by the end of the Parliament.

We need to commit to a new generation of new towns and give real Treasury guarantees to get them off the ground. We should be giving towns a right to grow and ensuring land with planning permission is built on quickly. We need to match a reformed Help to Buy scheme with a Help to Build scheme for small and medium-sized builders. And Sir Michael Lyons’ review for Labour will soon set out more of the reforms that need to be made.

If we fail to act now, not only will the aspirational majority who want to own their own homes find it ever harder to get on the ladder, but an imbalanced housing market also poses risks to the wider economy. A premature rise in interest rates to rein in the housing market in some parts of the country will have an impact on millions of families and businesses across the UK.

After warnings from the Bank of England and the IMF, the Chancellor will belatedly claim today that the government is acting. But when housebuilding under this government has reached the lowest peacetime levels since the 1920s, we need bold action now, not tinkering that is too little too late.

Second, we need more good jobs and to make work pay. That is why we will introduce a new gold standard vocational qualification for 18-year-olds and give control over apprenticeship spending to business to ensure every young person gets the skills they need. We will repeat the tax on bank bonuses to ensure every young person out of work for more than a year has a paid starter-job. And we will task the Low Pay Commission with ensuring we restore the lost value of the minimum wage, introduce incentives for employers to pay the non-statutory living wage and expand free childcare for working parents.

Third, we need to end the dither and delay not just on housing but our wider infrastructure. Sir John Armitt has set out a clear blueprint plan for an independent infrastructure commission which will make it harder for future governments to kick vital decisions, like the need to expand aviation capacity, into the long grass.

Fourth, we need to reform uncompetitive markets that are not working for consumers or businesses alike. In energy we have seen again this week why we need Ed Miliband’s reforms when falling wholesale costs have not been passed on to customers. In banking, net lending to businesses is down by £122bn under this Chancellor. Labour will ask the Competition and Markets Authority to report on how we can increase competition with new challenger banks, establish a proper Business Investment Bank and cut business rates for 1.5 million business properties.

Finally, we need reforms in Europe – not an arbitrary referendum for reasons of internal Tory party management which is creating huge business uncertainty – and to make sure immigration is fair and managed with strong borders and tough controls. That means being properly engaged in Europe, not with one foot in the exit door. And it means reforms to ensure that EU citizens seeking work here contribute to our economy and society.

As I argued four years ago, we should extend the period of time that people from new member states have to wait before being able to come to the United Kingdom to look for work. We will work to stop the payment of child benefits to those not resident in this country, consult on changing the rules on deporting someone who receives a custodial sentence shortly after arriving in the UK, and have called on the government to double the time that an EU migrant has to wait before being able to claim the basic jobseeker’s allowance.

This is Labour’s agenda for economic change. It stands in marked contrast to Tory ministers burying their heads in the sand, repeating a hollow mantra and hoping that more of the same will restore public trust. We will only sustain support for an open and dynamic market economy if we show that it can work for all, and not just some. That is the long-term economic plan Britain needs.

Posted June 12th, 2014 by Ed
June 10th, 2014

Lofthouse Primary leads the way with their Code Club

It’s fair to say that when I walked into a ‘Code Club’ at Lofthouse Gate primary school with head, Mrs Savage, we were both a bit apprehensive. For most of us, ‘coding’ is a mysterious term that conjures up images of a lonely figure hunched over a big computer.

Not so! At Lofthouse Primary, year 5 and 6 pupils crowded round electronic workpads, eagerly ‘coding’ – making objects dance, sing and spin across the screen. They weren’t working in isolation. Instead they were all were talking to each other, sharing tips on how to do new tricks. Talking and sharing ideas is a big part of a Code Club.

Walk around any school in our district, as I do regularly, and you can’t help but be amazed at how much technology is now integrated into classrooms. There are laptops and tablets, white boards and even high-tech entrance systems. And it’s now very much part of a teacher’s job to keep up with changing technology, especially when it can improve children’s learning.

But some areas of new technology are pretty specialised. ‘Code Club’ is an organisation supported by the internet giant Google, that seems to be a great way to fill the gap. Clubs are run by parents or a local volunteer as an after school club. Teachers can get involved, but don’t need to run the clubs themselves. It’s a great way to get the school integrated into the local business community and to get kids learning new and useful skills too.

And with jobs in this sector on the increase, for some youngsters in our area, a Code Club could be just the start. So let’s make sure these opportunities are available not just to a few but to all our children.

Posted June 10th, 2014 by Ed