Green Party calls for an end to “economic egos”

In light of Ed Balls’s speech to the LSE on Thursday morning,(1) the Green Party welcomes his refutation of the government’s deficit reduction strategy, but the Shadow Chancellor failed to apply his most powerful arguments to his own policies.

Mr Balls correctly argued that the regressive VAT increase and drastic fiscal austerity, combined with interest rates that can be lowered no further, have shaken our economy by stoking inflation and driving unemployment up to 7.9%.(2) Chancellor George Osborne’s shock therapy has forced an increase in UK borrowing by an additional £46 billion on top of what was forecast after the Spending Review.

But Ed Balls’s most profound insight was one that the Green Party has been articulating since 2010. He admits that he only recently realised that George Osborne’s decisions on the UK’s economic course were made for party political benefit. Britain is suffering because the Conservatives have decided it will make them more electable if they can eliminate the deficit in a single parliament – whatever the cost.

Yet Ed Balls has failed to apply his new found rationale to himself and the Labour Party’s economic strategy; because the Coalition has made the decision to eliminate the deficit in a single parliament, Ed Balls has tried to trump them, calling for the deficit to be halved in the same amount of time.

As with the government, the figure and time frame has been dictated by political opportunism and lacks intellectual economic justification.

The Green Party calls for an end to arbitrary, ego-driven economic policy making, and for an open and rational debate driven by an empirically drawn understanding of our economy and society. Greens would dispose of political time frames and focus on green investment rather than austerity, pressing for a Green New Deal that could flexibly respond to long term economic and social trends rather than simply serving to prop individual political egos.

Notes:

1) Ed Balls speech on the economic alternative, full transcript, LSE, 16 June 2011
http://www.newstatesman.com/politics/2011/06/george-osborne-growth-deficit

2) 7.9% unemployment in the first quarter of 2011 according to the Office for National Statistics (ONS)
http://www.statistics.gov.uk/pdfdir/lmsuk0611.pdf

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