Who should be the next Chancellor?
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Contributing editor
Emily Hohler Jun 05, 2009
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Will Ed Balls step in?
"Labour is in a state of nervous breakdown", says Andrew Porter in The Daily Telegraph. On Wednesday, Communities Secretary Hazel Blears became the second cabinet member (after Home Secretary Jacqui Smith) to resign in 24 hours.
With grim European election results expected, Brown is under intense pressure to deliver a cabinet reshuffle that "wrestles back some semblance of authority for his administration". And it looks like the highest-profile head to roll could be Chancellor Alistair Darling, who looks set to lose his post to Ed Balls, Brown's closest ally.
Appointing Balls would be an "extraordinary gamble", says Rachel Sylvester in The Times. Balls has always wanted the post, but he is a "deeply divisive figure" who has never been forgiven by the Blairites for suggesting that Brown, not Blair, was "really in charge". One former minister claims that if Balls is appointed "all hell will break loose", while another claims "it would be the ultimate act of cronyism, the final retreat into the bunker as the last few streets of Berlin are defended".
Nonsense, says Irwin Stelzer in The Daily Telegraph. Brown's only hope of snatching "victory from the jaws of defeat" is to "recapture some portion of his reputation for economic competence" and Balls could help him do that. "Blairites will be miffed, but they are more or less in a permanent state of miffiness." Other politicians may not like him much, but Balls is respected in the City. He studied at Harvard under some of the best macroeconomists in the world. Even if they couldn't persuade him markets generally do a better job than ministers, "they did teach him about the relation of excessive borrowing to the health of the economy".
So while Balls may not be able to "persuade his boss that an ever-expanding welfare state is the road to economic ruin", he may manage to "rein in spending, cut a tax or two to stimulate growth, forswear the tax increases Darling has scheduled and bring in an emergency Budget that persuades the financial community and world markets that Britain is not intending to follow the fiscal polices that have made Mugabe famous". And he deserves a chance – after all, "he did devise the tests that kept Britain out of the euro".
But dumping Darling now would be a mistake, says the FT. "Few portfolios benefit from inexperience at the helm. At this stage in parliament, with only a year left until a general election is required, the only reason to change ministers is if they lack the authority required to do their job."
Darling has been "caught up in the expenses fiasco but his offences are trivial, and he is a solid chancellor". He took office in June 2007 at the outset of an "epochal financial crisis, inheriting a weak fiscal position and an unwinnable argument about raising income tax on poor people". His only notable failure is his lack of credible plans for retuning the UK to fiscal balance.
But Balls is not the man to set the deficit straight. After all, Balls served as chief economic adviser when Brown was chancellor; his background simply implicates him in the crisis. Darling, by contrast, has unique experience in cleaning up after Mr Balls' mistakes. He should "stay where he is".
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