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Ed Balls tells porkies about the deficit

25 October 2012

Ed Balls has just been given a thorough grilling by Andrew Neil on the Daily Politics — particularly on his past assertions that Labour were not running a structural deficit in the years leading up to the financial crisis. Here’s the relevant section of the interview:

In the past, we’ve accused Balls of deploying ‘Brownies’ — deliberately misleading half-truths. But in this case, what he says is flatly untrue.

Let’s start with Balls’ misquoting of his interview with Andrew Mar from January 2011. Here’s what he said then:

Andrew Marr: ‘It is true to say, is it not, that in the run-up to the financial crisis, Britain was running the worst structural deficit — that’s the extra beyond the cycle — of any of the G7 countries?’

Ed Balls: ‘I don’t think we had a structural deficit at all in that period.’

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But today, Balls said:

‘His question to me, which you mustn’t take out of context is: “Should you have acted differently in 2007?” Well at the time, the answer is no. In retrospect, ‘cos we now know the world was different, of course there was a structural deficit.’

And what about Balls’ claim that the government didn’t know ‘at the time’ that it was running a structural deficit? Here’s what he said today:

‘Let’s be clear. The charge is, in 2006-07, Labour was being irresponsible given the figures available. The answer is that at that time, given the figures available, there was not a structural deficit on the current account. In retrospect, of course there was. I’ve never denied that.’

So I took a look at the figures available in 2007, and guess what they show? That’s right: a structural deficit.

Here are the Treasury’s own figures from the 2007 Budget, published in March 2007. I’ve included two sets of figures: ‘Cyclically-adjusted public sector net borrowing’ (the structural deficit) and ‘Cyclically-adjusted deficit on current budget’ (the structural deficit on the current account, which Balls referred to).

And the Treasury wasn’t alone in saying the UK was running a structural deficit. Here are the IMF figures from April 2007:

So, yes, the IMF underestimated how big our structural deficit was back in 2007. But both they and the Treasury were saying we had one. Either Ed Balls had his fingers in his ears at the time, or he simply didn’t care. But did he really think no one would check?

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Show comments
  • Clive

    The trouble is that the people that he repeated his lies to, the viewers,would far outnumber the people reading your article so in net terms the lies work

  • les

    balls is well known as a compulsive liar it shows how weak milliband is in picking him as shadow chancellor balls used to send him to get the tea when they were in the treasury sounds about right to me

  • JahKnows

    “Either Ed Balls had his fingers in his ears at the time, or he simply didn’t care”

    He is simply a liar.

    His government used lying as a political strategy. Brown was a teller of half-truths and obfuscations as well as the odd out-and-out porky. Blair was one of the greatest liars this country has ever produced and his lies lead to the deaths of tens of thousands at least.

    Labour lie. It’s the only thing they do well.

  • Jimmy R

    There are three unnecessary words at the end of that headline.

  • Watcher

    The deficit was the cost of Brown & Balls’ campaign to oust Blair. The money was thrown into the Public sector to win Unite support in Labour’s NEC. Also benefits & Tax credits were bumped up to ensure Labour won the election so that B&B would progress smoothly to No 10& No 11. Our Grandchildren will pay for the Brown/Balls abuse of their position. This is why Balls pretends not to know about the structural deficit.

    • Ruby Duck

      I have a slight concern that by attributing it to the campaign to oust him you are letting Blair of the hook..

      You are right about buying the 2005 election. While canvassing I spoke to a lady who was quite open about it. She said that she liked what Michael Howard was saying, but that she would vote Labour because the tax credits paid for her house. I can only hope that she was not one of those who found, shortly after the election, that they had been overpaid benefits and were required to repay some.

  • Stephen Medlock

    Well done Brillo its worth a watch to see Balls skewered but still wriggling

  • Harry

    This all depends what you mean by “structural deficit”. You can manipulate the figures after the fact to make it look like there was some kind of underlying problem with the economy, but in all honesty there wasn’t really was there? It was the private sector that went bust remember?

    Further, Labour weren’t borrowing to spend on essentials which doesn’t sound like the “fundamental imbalance in government receipts” which is the technical definition of structural deficit. The UK was not in the same state as Greece which can be said to have a proper structural deficit.

    If you were to accept the above as the definition of structural deficit (which is essentially just not “balancing the books” for a period of time) then you would have to be honest about it and notice that the UK has had a structural deficit for decades – most of this century in fact – and the Tories are just as much to blame as Labour. You would also have to notice that Brown oversaw the largest budget surplus in over 40 years.

    Sometimes you can almost smell the desperation of the Right to blame Balls for the recession even though he was Minister for Children during the recession!

    • HooksLaw

      He was in the Treasury under Brown when he created the bogus regulatory regime.
      We had growth and went from surplus to deficit. So the govt was spending money the economy could not sustain at a time when it should have been paying debt back.

      Brown sold the G3 network bands. Thats a bit like getting a Post Office pensions windfall which this govt is not counting on its books.

      • Harry

        1.Tories were calling for even lighter regulation.

        2. “Should have been paying debt back” – the government WAS paying debt back. Bonds have a maturity date on them. The reason for the deficit is because government was borrowing more on top of that than it was getting in tax receipts. However, it is not true to say that the economy “could not sustain this”. Historically UK has sustained around 40% debt/gdp since 1980 and it was around 35% during 00s. Only the 2008 credit crunch, global banking crash and subsequent recession threw doubt on this outlook and started some people questioning past policies. Hindsight is a wonderful thing…

        3. As far as I’m aware, 3G networks were a one-off. Brown ran surpluses 1998-2001 inclusive.

        • HJ777

          The problem wasn’t the amount of regulation (there was, and remains, too much) it was the regulatory regime and the quality of it.

          Brown inherited substantial growth and a budget already headed rapidly towards a surplus.

  • BillyLieSpotter

    Table C1 in the Treasury Budget for 2007 shows minus signs in front of those numbers. A surplus. You are lying.

    • hexton

      Table C1 shows a negative percentage, yes, but it’s labelled as “surplus in cyclically-adjusted budget”. Aka a deficit.

    • kb4355

      Hahaha, deliberate mistakes in the Speccie ?? Shurely there must be shome mishtake….

  • ButcombeMan

    No comment on this I note-from telemachus!

    So far anyway.

    Balls is a fraudster.

  • HooksLaw

    Labour both ran a structural deficit and did not realise how big it was. Even if Balls only now says there was one but they did not realise it was there, this still does not excuse his and Browns laxity
    They should have not been running ANY deficit, they should have been paying down debt. Why, if we had years of growth, was there any deficit at all?

    The answer is that we were spending too much.
    In labours manifesto Brown promised to make 20 billion savings in the NHS. Why then if these savings were possible did Brown spend the money in the first place?
    Brown spent too much, he spent money that the economy could not sustain and he spent it unwisely.
    Add to this that he allowed the banks to almost bankrupt themselves and its easy to see why Brown and Balls are the worst things to happen to Britain since the Luftwaffe.

    • Andy

      Exactly right. Those idiots ought to have been running a decent surplus and paying down the debt. If they had been doing this we wouldn’t be in the mess we now find. Balls is a liar and he is incompetent. The mess he and that idiot Brown made of our economy will take a generation and more to repair, if it ever is repaired. The pair of them ought, by right, to be hanged.

      • HooksLaw

        Well, hung by their thumbs or better still in the stocks.

        Running a surplus would have also meant getting better value for the money we were spending. Instead we got a junkie economy addicted to public spending.

    • MarkAustin

      To be fair to both Brown and Balls (not that I particularly want to be given their spectacular incompetence) their problem was not spending: their spending was, by and large, exactly in line with their projections. It was revenue, which every year fell short of their expectations. Their fault was not correcting this, either by raising taxes or reducing spending.

  • HooksLaw

    I do not think anyone can take anything Balls says seriously. He makes it up as he goes along.

  • Daniel Maris

    Yawn-inducing. This isn’t the same as giving a signed pledge you are not going to increase student fees and then doing just that.

    • milliboot

      We have a co alition, didnt you notice ? which means you have to compromise.Promises were made on the basis of being in Government as one party.

    • HJ777

      You’re correct, it’s more similar to having a manifesto pledge not to introduce tuition fees and then introducing them.

  • Alefrith

    I think that in the Labour book of replies to awkward questions denial is the first and foremost tactic followed by changing the subject followed by telling even bigger lies followed by further denial and if all else fails the tried and tested “fatcher” gambit.
    I am not a labour party supporter but can honestly lay my hand on my heart and say to anyone in the labour party who is listening “one of the biggest problems with your economic credibility is this lying, two faced, worthless sack of shxx”.

  • Robert_Eve

    How is this news?

    It’s Balls.

  • TomTom

    Why shouldn’t Balls tell lies ? He is elected to tell lies. He was a journalist on the FT who became the organ grinder’s monkey at The Treasury. Balls should not be condemned for telling lies, he is a liar, and politicians tell lies, so what exactly is the problem ?

    • dalai guevara

      Absolutely right, lies are the game – at least BoJo gives us a good show as well.
      Am I making an case for neo-populism?

    • David B

      We need them to stop lying. We need to be able to trust our politicians

    • TomTom

      DE Gaulle commented:
      “Since a politician never
      believes what he says, he is surprised when others believe him.”

  • SonofBoudicca

    Like all pathalogical liars he simply adopts the policy of repeating the lie over and over again. A bit like the child saying “I wasn’t there, and when I was there I didn’t do it”. He also has the skin of a rhinoceros so he’ll never admit the truth.

  • Bruce, UK

    Ed Balls is a liar. And in other news, pond ripples when duck farts.

  • Eric

    The usual re-write of history that you can expect from Balls

  • ToryOAP

    This could be a measure of our journalists in the days to come. Mitchell and Osborne were portrayed as being less than honest and both were slated by the press. Now we have the second most senior member of the opposition, a possible future Chancellor, being caught out in bare-faced LIES. Do we expect this to run and run? Do we heck as like. This story will be buried and probably won’t even get the attention on Question Time tonight that Grant Shapps’ use of a pen name got from Dumblebore. In my youth, a senior politician caught out in even a small lie would have faced political oblivion. Since lying became the natural order as propogated by: Blair, Campbell, Mandelson, Brown, Milliband, Smith, Reid, Byers, McBride, Whelan, Bryant and Balls (to name just a few), it is now par for the course and only of interest when practiced by the right.

    P.S. Watch the video here:


      ToryOAP on the nail as ever!
      But why is the Spectator so coy in its headline above and earlier with reference to Nick Clegg? Are they less likely to be sued for using the word porkie instead of liar? Would the damages, were Balls to succeed in any action, be less? Any lawyers out there who know about these things?

  • BigAl

    Oxford English Dictionary definition of liar
    a person who tells lies:the man was a notorious liar[with modifier]:Shelley wasn’t a good liar

  • Sungei Patani

    Isn’t a headline
    “Ed Balls tells porkies”
    just stating the obvious?

    • HooksLaw

      A real headline would be, ‘Ed Balls tells the truth!’

  • L’Arse

    Anthony Wells, who, I’m sure you’ll all agree is pretty neutral in these matters, has this to say at UK Polling Report:

    Political coverage today is likely to be dominated by the latest growth figures which showed an increase in GDP of 1% and, therefore, that the economy is technically no longer in recession. My constant refrain on this site is that you shouldn’t overestimate the likely impact of events – most people aren’t reading the political news or the business pages and those that do tend to interpret events through the prism of their pre-existing party identification anyway.

    The announcement of GDP figures sometimes has an impact on the polls and sometimes it doesn’t. Unless they signal a particular turnaround they don’t normally register – they are a statistical number in the business news that says nothing about people’s real lives. When they can make a difference is if they trigger a media narrative that does say something people understand.For example, there was no obvious impact in the polls from the horrid GDP figures in July, or those last January. In April 2012 when the GDP figures produced headlines about Britain being in a “double dip recession” there could have been an impact (Labour’s lead did rise, but it was part of the whole omnishambles period so it is difficult to differentiate one factor from another). If the media make a big fuss about the country being out of recession then it may filter through into more positive feelings about the government and their economic policy, or it may not. However public perceptions about the state of the economic are very pessimistic indeed, I suspect it will take a lot more than some good GDP figures to make much of a dent in them.

    • L’Arse

      Oh, I love it when you lot dismiss an argument, even when it isn’t from a lefty. You’re all doomed, doooomed I tell ya’…

  • Tron

    Well done Brillo ! Balls is a bare-faced liar.
    Will the BBC show this on their News Channel ? I think not.

    • HJ777

      Brillo did well, but it’s unfortunate that he didn’t have the info to hand to challenge Balls’s new version of the truth, that he was referring to the “figures available at the time”.

      He should have him back on his programme.

      • realfish

        Didn’t he say that he is on the Sunday Politics this week-end? He can grill him then.
        Another question Brillo could ask him; ‘What is worse, a politician swearing at a copper…or a politician continually and habitually lying to the British people?’

  • L’Arse

    Ed’s cynical and callous use of bogus cyclically-adjusted public sector net borrowing figures is certain to mean a Tory victory at the forthcoming Corby by-election, surely?

  • Bob Dixon

    Cameron & Osbourne would be under greater pressure if Labour had a credible Shadow Chancellor

    • RMcGeddon

      Bring back Ed Millionaireband’s first choice: Alan Johnson.

      • milliboot

        Alan Johnson said himself that he was not up to the job of chancellor. He wont be back.,

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