Ed Balls’ resurrection as Shadow Chancellor of the Exchequer never looked like a positive move if like me you believe that the first step on the UK’s long and painful journey towards recovery from the financial crisis is to honestly appraise what went wrong.
However, even I must say that my dire view of the man’s ability or willingness to grasp reality was exceeded in a negative sense and in record time.
On the Andrew Marr Show on BBC1 on Sunday 30th January the following exchange took place:
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?”
To which Balls replied: “I don’t think we had a structural deficit at all in that period. We had a deficit but we were covering that by investment.”
I have no idea what Balls even suggesting “covering that by investment” means, and it is too much to expect the Labour supporting Marr to ask an effective supplementary.
However, what Balls seems to mean is that the money which was borrowed was spent, which is blindingly obvious. But what on? Was it invested in the sense that we understand it? Was it used to buy shares or bonds of other countries, gold perhaps (no - Gordon Brown sold that at a ridiculously low price), maybe it was used to build factories, offices, call centres, infrastructure or some other productive assets?
No, as my previous post on this website made clear, the majority of the increased spending went on categories such as pensions, welfare, and healthcare. I can’t figure out how that equates to investment.
Which all leads to the conclusion that either Balls is financially illiterate, which seems unlikely as he has a first class PPE degree, or that he’s telling a bare-faced fib and he knows he is.