Ed Balls: Things Should Be Cheaper

John Rentoul

In my capacity as the Shadow Chancellor’s auxiliary press officer, here is a transcript of him on BBC Radio 4 The World at One explaining why petrol should be cheaper.

Ed Stourton: I imagine that this step would be extremely popular but would it be wise?

Ed Balls: I think it would be wise and popular and the reason is because at the moment, as you heard [in preceding package], even though the economy is just out of recession people are under real pressure. Businesses and families, their budgets under real pressure – taxes up, living standards down and the petrol price is higher than at the election and higher than it was when George Osborne postponed this rise back in the summer following calls from Labour. So if he is being consistent what he should be doing is agreeing with us that this is the wrong time to go ahead with this hit for families.

ES: The government of course make the point that it was your government that introduced this system?

EB: But the Chancellor is in charge and he makes decisions Budget to Budget and he has confirmed these tax rises to go ahead and I don’t think he should  now because the petrol price is too high and it’s too risky for the economy. When Labour was in government I think there were 13 different occasions when Labour in government either didn’t go ahead with a rise at all or only held the rise in real-terms, didn’t go ahead with an extra rise because governments have to be flexible and even if your approach is to get the tax revenues in to pay for public services and to get the deficit down, when the petrol price is very high and it’s very painful for people then the right thing to do is to postpone – that’s what he should do.

ES: And how would you make up the financial shortfall – it’s a lot of money?

EB: Well we have proposed that the government closes a tax avoidance abuse that is happening at the moment which is happening in the agency employment sector where individuals are being employed by umbrella companies and then certain companies are then claiming a whole load of expenses for those people to offset against tax which is estimated to be costing £750 million, even more. We are saying on a cautious estimate, half of that money would pay for the postponement from January to April. The Chancellor should do it right now, he should announce his intention to go ahead and do that.

ES: Well if there is a bit of extra cash available shouldn’t that be used to pay off a bit of the deficit?

EB: Well that is an interesting debate Ed because the problem we have at the moment is that the borrowing, the deficit this year so far, is higher than last year. The deficit is going up not down…

ES: Well that makes the case stronger doesn’t it?

EB: Well I’m not sure actually because the reason why that’s happened is two things. First of all we have had a double dip recession which means you’ve got fewer people in work paying tax and confidence is down but also businesses and families are under pressure and they’re struggling and they are not spending and what you’ve got to do is get some confidence back into this economy. If not, the deficit it is going to carry on, as with George Osborne this year, it’s going to carry on going up and I think it’s very complacent if I’m honest with you for the government to cross their fingers and hope for the best. This recovery is not secured, families are under pressure, the government should act to kick-start the recovery, to build homes to get people back to work and not go ahead with the petrol price rise. That is the way to secure the recovery and get the deficit down.

ES: Are you expecting support from rebel Tories with your motion today?

EB: Well I hope so and on Friday there were clearly Conservative MPs who are in touch with their constituents and know that this is the wrong time for them to be voting for a rise in petrol tax. There have been nods and winks again from the Chancellor in the last 24 hours. He is hoping that people will stay away tonight and not vote on the Conservative side, but I think I would say to Conservative MPs, I wouldn’t take a nod or a wink from this Chancellor as sufficient. I would want to make a clear statement to my constituents this is the wrong thing to do and I am going to vote with Labour.

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  • john

    Why do people even listen to this Balls person? His only argument is the specious spend more now, and come up with vague unproven plans as to how you might pay some of it off. He is the clown responsible for the current deficit, so his views on how to spend our way out of it are just irrelevant.

  • creggancowboy

    Whatever happened to Alan Johnson?

  • Toocleverbyhalf

    It’s pathetic isn’t it? Just before the last Tory government collapsed it introduced a fuel price accelerator and then tried to score a few points off the incoming Labour government by demanding its repeal.

    And just before the last Labour government collapsed it introduced a fuel price accelerator and now is trying to score a few points off the incoming Conservative-led government by demanding its repeal.

    Will no opposition party ever admit that governments have to charge taxes to pay for all the things they do? Or must they go on pretending, as they have from the days of Ronald Reagan, that we can all have everything for nothing?

  • Kippers

    Supposedly fuel tax increases (mandated by politicians) are supposed to signal to us that in the long run fuel prices will inevitably be higher. They are a warning about how dependent we are on something that will inevitably get more expensive. However, as soon as that signal begins to be heard, it is the politicians that get into a panic about how it will affect the public (and the economic sectors that have got themselves most dependent on expensive fuels). Do our politicians believe in this kind of price signal or don’t they?

  • spurnlad

    Petrol would be cheaper if there wasn’t a HUGE amount of tax on it!!!!

  • saffrin

    Such short memories does the Liebour party scumbag have.

    Things would be cheaper Ed, had your lot not bust the countries economy and dumped us with a £1 trillion debt.

    Thanks to you Ed, VAT is now 20%.

  • Pacificweather

    Or VAT could be reduced which would benefit people with lower incomes but, of course, that is not the intention of either party.

  • pyrrho48

    h resigned for personal reasons.

  • HJ777

    Balls is both an idiot and dishonest.

    “First of all we have had a double dip recession which means you’ve got fewer people in work paying tax…”

    In fact, the number of people in employment has increased.

    The government can’t make things cheaper, it can only move money around. Balls is advocating a popularist measure just to delay the petrol price rise by three months.

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