Shadow Chancellor 2011-2015

Ed was UK Shadow Chancellor from 2011 to 2015. He was awarded the Spectator Parliamentarian of the Year and the Political Studies Association Politician of the Year in 2011. 

Read an extract from Chapter 23, 'Mistakes', in Ed's book, 'Speaking Out: Lessons in Life and Politics'

"...in the first few months of 2015, and the first few weeks of the election campaign, my strategy appeared to be working. The line we’d established on our approach to the deficit and public spending was holding, viewed as ‘tough’ but not the same as the Tories, so we weren’t under any great pressure. George Osborne’s January attempt to expose Labour’s spending ‘bombshell’ had imploded as we had successfully shown his claims were totally invented. In the election campaign proper, he was never able to land a single blow on us about the unaffordability of our Budget plans.

But if David Cameron wanted to ‘prove’ we had no economic credibility, he didn’t need data, he could simply point to Liam Byrne’s note or – even worse – Ed Miliband’s conference speech.

And this perception that Ed did not care about fiscal discipline left us vulnerable to the inevitable Tory attack that the SNP would be deciding our first Budget if we ended up with a hung Parliament. Once the Tories put our weakness on economic credibility together with the fear that the SNP would be calling the shots, we were sunk. We became the risky choice. I believe millions of English voters – most crucially ex- Lib Dems – genuinely felt that their taxes were going to be hiked at the whim of Alex Salmond and Nicola Sturgeon, and the only way to stop that happening was by voting Tory.

Of course, some people will argue that the real underlying problem we failed to deal with was the idea that people just couldn’t see Ed Miliband as a potential prime minister, or me as a potential Chancellor, and that our record in the Treasury before the financial crisis was playing a role in that. For my part, I was sufficiently worried that I constantly asked Labour’s pollsters to test the extent to which I personally was to blame for the slump in the party’s economic ratings, and I attended focus groups to watch behind the glass and hear the views from potential voters first-hand. I used to say to Yvette that I would stand aside in a heartbeat if I thought I personally was going to cost the party the election.

But the answers I heard were that, while there was no doubting the negative opinions of Labour on the economy, it dated back at least ten years, and wasn’t personal to me or Ed Miliband. If anything, when people were asked what they knew about me and my past in politics, the association was with my time as Children’s Secretary, and in particular the Baby P case, not anything to do with the Treasury

It may be why the Tories gave up portraying Ed and me as puppets of Gordon Brown, or the men who ‘crashed the car’ during the election campaign – we knew those adverts just left many voters a bit baffled. But when they struck on the idea of billboard ads portraying Ed Miliband as a puppet of Alex Salmond, that really did hit home, because it combined the persistent worries about Labour’s economic management with the new fear that Ed wouldn’t have the strength as a leader to stand up to the SNP on tax and spending in a hung Parliament.

Every politician has problems they brush under the carpet, hoping either that they’ll go away or that solutions will eventually present themselves. But, just like ignoring the alcohol limit or going too fast, it’s an unforgivable mistake. Whatever problems the current Labour opposition are debating, they have to confront them head-on, not wait and pay the price at the next election."

Read Ed's book, Speaking Out, here.

Extract from 'Striking the right balance for the British economy', Ed's speech at Thomson Reuters, June 2013

"Three years into this coalition government, and three weeks before the Chancellor completes his much-trailed Spending Review for 2015/16, it makes sense now to set out Labour’s approach.

In my speech today, I want to make three central arguments.

First, that this Spending Review is a sign not of strength but of weakness. It is happening because the Chancellor’s economic policies have failed catastrophically – on living standards, economic growth and on deficit reduction too. It is this economic failure that is the background to this month’s Spending Review. 

Second, the Prime Minister and the Chancellor are making a terrible mistake in ploughing on with their failing plan: increasing the price the British people will pay now and in the future for this failure. Action for growth this year, next year and the years after should instead be the purpose of any spending review this summer.

And third, the next Labour government must start planning now for what will be a very difficult inheritance. We can now expect to inherit an economy with families under real financial pressure, businesses that have lost vital opportunities to invest, and public finances in poor shape, despite deep cuts to vital public services. This bleak inheritance is now more likely because of the missed opportunity of this Spending Review. 

My message to David Cameron, George Osborne and the Tory-led coalition is this:

Our country should not be forced to put up with two more years of your failing plan. 

Your experiment with austerity economics has failed on living standards, jobs and growth and on deficit reduction too – and the British people are paying the price for this failure.

Your doctrine of so-called ‘expansionary fiscal contraction’ – that the faster you cut public spending, the greater the boost to private investment and growth – has been exposed as intellectually bankrupt. Even the IMF now says your plans are ‘a drag on growth’. 

And your fixation on unbalanced, old-style ‘trickle-down economics’ – the belief that cutting taxes only for the highest earners will lead to more investment and growth, with wage rises trickling down for everyone else – has been equally discredited."

Read the full speech here.

Extract from Ed's Bloomberg speech,'There is an alternative', August 2010

"I am very grateful to Bloomberg for giving me the opportunity to come here this morning to respond to the bullish speech given from this same platform by George Osborne 10 days ago.

That speech is the clearest articulation of the Cameron-Clegg Coalition strategy for this parliament.

In it, their Chancellor repeated his claim that fiscal retrenchment through immediate and deep public spending cuts to reduce the fiscal deficit would build financial market confidence in the UK economy, keep interest rates low and secure economic recovery by boosting private investment.

And the Chancellor once again declared that his was the only possible credible course ahead – dismissing anyone who doubts that fiscal deflation on this scale and at this delicate stage in the economic cycle is necessary or wise.

I was in America when I read about the speech, travelling across New England.

And after seeing first hand the worried and increasingly pessimistic mood in the US – in the media and in conversation with friends – it jarred to read the British Chancellor saying he was “cautiously optimistic about the economic situation”.

The prevailing attitude I saw in America was not optimism but fear.

Every newspaper I read highlighted people’s worries about their business, their jobs or their home and the growing concerns of US policymakers and business leaders and financial analysts at the emerging signs of a double-dip recession – and not just any recession.

They fear what Americans – especially on the Eastern seaboard – like to call a ‘Perfect Storm’.

A perfect storm where continued de-leveraging by banks and the private sector meets premature fiscal retrenchment from governments and a drastic tightening of consumer spending… as tax rises, benefit cuts and rising unemployment hit home.

And it is these fears – not just in the US but round the world – which in recent days have caused equity markets to fall sharply, bond markets to surge, well summed up by Wednesday’s Financial Times front page headline ‘Market jitters over growth’.

This is a risky and dangerous time for the world economy. History teaches us that economic recovery following a large-scale financial crisis can be slow and stuttering..."

Read the full speech here and watch it here.