June 4, 2012 5:58 pm

Two Eds grow together as Balls’ star rises

Ed Balls and Ed Miliband

When Ed Miliband became the Labour party leader almost two years ago, he was determined to block one man from becoming shadow chancellor: Ed Balls.

Fast-forward to today, and Mr Balls has now cemented his authority over Labour’s economic policy and, crucially, appears to have won the internal debate within the party over whether to lean towards austerity or growth.

With the party’s mid-June national policy forum fast approaching, the changing dynamic between the “two Eds” is the subject of increasing political scrutiny.

When Alan Johnson was appointed shadow chancellor in autumn 2010, after David Miliband turned down the job, the message was clear: Ed Miliband did not want Mr Balls, with his fierce anti-cuts message, to fill the role, despite his obvious expertise in economics.

Four months later, Mr Johnson stepped down for personal reasons and, once again, Mr Miliband asked his brother David to take the job, the Financial Times has learnt. He refused – and the party leader turned to Mr Balls.

The Balls approach now appears far less isolated than it once was, with figures across Europe such as Mario Draghi, the European Central Bank president, and President François Hollande of France echoing his “anti-austerity” stance. Labour, meanwhile, has surged in the polls, partly because of hostility to the coalition’s March Budget and subsequent U-turns.

Although the party is still fleshing out its policy ideas, it has abandoned any suggestions of a “shadow Budget”. In a sign of Mr Balls’ increasing power within the party, members of the shadow cabinet have been told they do not need to produce “masochistic” lists of cuts that Labour would perform in office.

Ed to Ed: Bruiser vs Zen master

Background

Ed Miliband: Born in north London in 1969 and educated at a comprehensive. Studied at Oxford and the LSE before becoming a TV journalist and Labour researcher. Later became a junior aide to Gordon Brown alongside Balls.

Ed Balls: Born in Norwich in 1967 he went to a private school in Nottingham before studying at Oxford and Harvard. He joined the FT in 1990 then became economic adviser to Gordon Brown in 1994.

Strengths

Ed Miliband: Possesses complete confidence and is capable of occasional ruthlessness. Demonstrates a “zen” manner in a tight spot. Has strong team of aides.

Ed Balls: The most intellectually capable of the Labour front bench and a political bruiser who relishes fighting the Tories. Iron self-belief. Has tight posse of MP friends.

Weaknesses

Ed Miliband: Has been accused of indecision. The Balls camp see Miliband as a dreamer who enjoys nothing better than indulgent four-hour “wonkathons” with intellectual fellow travellers from the left.

Ed Balls: Has been accused of overbearing manner and arrogance. The Miliband camp see Balls as part of “continuity New Labour”, preferring to put pragmatism over idealistic “breaks from the past”.

Career high and low

Ed Miliband: High: beat elder brother David to win the leadership in 2010 against the odds. Low: took a year out from the Treasury in 2002 to teach at Harvard because he felt overshadowed by Balls.

Ed Balls: High: Kept Britain out of the euro and gave Bank of England control over interest rates while Treasury aide. Low: ended a poor third in the 2010 leadership race.

Outside interests

Ed Miliband: Married to lawyer Justine a year ago and has two young sons. Favourite song is “Take on Me” by Aha. Supports the Boston Red Sox baseball team.

Ed Balls: Father of three and married to shadow home secretary Yvette Cooper. Enjoys travel and cooking. Is a belligerent but effective football player and a fan of Norwich FC.

At the turn of the year, two shadow cabinet members flagged cuts they would enact in their own departments in an attempt to improve Labour’s fiscal credibility.

Jim Murphy, the Blairite shadow defence secretary, called on Labour to avoid a “populist approach” of opposing all government cuts, outlining £5bn of acceptable defence cuts, and Maria Eagle, shadow transport secretary, said she backed £6bn of transport cuts.

That approach annoyed Mr Balls, who complained during one shadow cabinet session that the Murphy intervention had disrupted his own message.

Mr Balls has said: “Of course we need spending cuts and tax rises.” He says he accepts a tough fiscal landscape until 2015 with no headroom for public spending giveaways.

But he has been loath to produce too much detail on either, although he surprised some with his acceptance of the public sector pay freeze. Instead, he has repeatedly attacked “too deep, too fast” cuts.

“When they [Ms Eagle and Mr Murphy] were doing that at the start of the year, we were barely ahead in the polls, and now we’re more than 10 points ahead,” said one ally of Mr Balls. “That speaks for itself.”

Some within the party now suggest that Mr Balls is regarded as the “chief executive”, while Mr Miliband acts more as “chairman”.

This brings challenges for the party leader, who was the junior partner when the pair were both aides to Gordon Brown in the Labour Treasury.

When Mr Balls was in limbo as shadow home secretary in the early months of opposition, he showed visible frustration, talking down to the new leader at shadow cabinet meetings – sometimes even blocking Mr Johnson with his legs as he tried to edge past.

Aides now emphasise the positive relationship between the two Eds, despite the initial tensions. At regular question-and-answer sessions around the country before the local elections they often appeared as a double-act.

However, some Blairites are uneasy. “There is still scope for shadow ministers showing how they would make savings,” said Paul Richards, founder of the Progress centre-left group. “Labour should still be prepared to make tough decisions.”

Liam Byrne, another Blairite, has been removed from the brief of overseeing Labour’s policy review to be replaced by the more leftwing Jon Cruddas, although My Byrne retains the shadow work and pensions brief.

“Ed [Miliband] is the leader, absolutely everyone accepts that,” says Chuka Umunna, the shadow business secretary. “We all saw the destructive impact of poor relations between people under the last two leaders and everyone has accepted we need to work together.”

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