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Ed Balls apologises for failing to see crisis

Shadow Chancellor Ed Balls has apologised for his and Labour’s failings in the run up to the financial crash saying they should have been more stringent in regulating the banks.

Last night, in his Budget response broadcast, Balls dismissed Conservative claims that the deficit was down to Labour profligacy saying the “irresponsible actions” of banks were to blame.

He said: “But it was also the fault of governments and central banks – including the UK’s – who did not see the financial crisis coming and should have been tougher in regulating the banks. I would like to say sorry for the part that I and the last Labour government played in that.”

The coalition’s deficit reduction plan leans heavily on cuts to public spending and Balls said this is why the Government pins the blame for spending cuts on overspending by Labour.

He said: “The Conservatives want you to believe it was too much spending on schools, hospitals and police which caused the recession and the deficit, because they want an excuse to cut spending on those services now.”

He called on the Government to repeat the bank bonus tax this year and to use the money to build affordable homes, invest in job creation and to “strengthen the economy”.

He also attacked Chancellor’s George Osborne’s economic policy saying the economy has stopped growing, prices are rising and that Government borrowing was higher in February this year than last year when Labour was in Government.

He said: “For the sake of our country’s future, he needs to think again and start putting jobs and growth first, and he needs to do it now.”

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. Half an apology. True in terms of regulating banks and banks irresponsible actions.

    No apology for Labour govt irresponsible spending of money we did not have, creating structures and cost bases that we could not afford, or planning to further increase deficits with greater levels of unaffordable spending.

    Whilst I don’t agree with Osbourne’s strategy and policies, Balls and Labour should keep quiet for a while to let the dust on their incompetent actions fade into the background.

    Labours spending plans were built on sand and the impending implosion was plain for all to see. The banking crisis was the straw that broke the camel’s back, but the implosion was coming.

  2. In normal life you’d be sacked for such big errors and you wouldn’t get the same (or a better) job back. Politicians shouldn’t be allowed to carry on once they’ve shown they’re not competent. Millions of people are going through misery as a result of the last governments errors and yet most of the same politicians are still in jobs trying to get back into the jobs they had before. Once you’ve been involved with a government that’s made such a mess of things you shouldn’t be able to go back into government again.

  3. Keith L Jackson 25th March 2011 at 1:22 pm

    Ill give you a good example of Labours wasted millions- the Millenium Dome! Ill thought out, badly located and it is beleived they din’t even know what they were going to do with until half way through the build!

    Money wasting idiots the lot of them.

  4. Couldn’t agree more – Labour continually hide behind bank failing when they can not deny one ounce that their spending and waste was wildly out of control. “There’s no money left” was the note left for the new Treasury team.

    We all know Labour created 100,000’s of public sector jobs and increased benefits for the feckless to shore up their support. Wish they’d stop banging on about “frontline services” and “hard working families”.

  5. Not good enough. My grandmother left school at 14 but knew enough about economics to make sure she didn’t spend money she didn’t have or borrow funds that she had no chance of repaying. The last Government not only failed to understand that basic point but they allowed a spirit of profligacy to take hold of the nation. Now we have to live with the consequences.

  6. I expect to receive an apolgy from the current chancellor in two years time for failing to see the economic problems he has create this week! It’s very easy with hindsight to blame somebody to failing to see a potential problem. How many Financial advisers told their clients to invest money in year 2000 and watched their clients investments plummet for three years? Did you see that coming and did you apologies to your clients? I doubt it.
    Can we also have less anonynimity in the future.

  7. Why are we complaining about what the previous government has done, when the current group seems to be leading us in to another recession?

    Cuts will indeed reduce a deficit but only if the situation remains stable or grows.

    What is wrong with investing in education, health, policing etc, I think we all hope some of our taxes go towards paying for something.

    If we look back at the early conservative regime of Lady Thatcher, the privatisation windfall from the sale of the UK’s oil assets, disappeared in to the hole of a six million unemployment line created due to severe public sector cuts. This ended putting the UK in to a large recession.

    Why do you complain about the Dome being built? When the previous conservative government sold the rail network to the highest bidder, in short term cost cutting only for us to now have to pay for 20 years of neglect of privatisation.

    I believe that Labour made mistakes, but the conservatives are not pointing us in the right direction either.

  8. To Anonymous at 1:22 pm, please get your facts right.
    Direct quote from Wikipedia “The Dome project was conceived, originally on a somewhat smaller scale, under John Major’s Conservative government, as a Festival of Britain or World’s Fair-type showcase to celebrate the third millennium. The incoming Labour government elected in 1997 under Tony Blair greatly expanded the size, scope and funding of the project”
    So it wasn’t just Labour’s fault, it was the Tories, too, and seems as though perhaps the Tories should take most of the blame.
    Just goes to show that when we switch governments from Right to Left to Right to Left, no-one has a clue who started what.

    But I do agree with you that they are all ‘money wasting idiots’.

  9. Ok, so John Major wants a small Gazebo somewhere useful, and Tony Blair decides to build a big dome in the middle of nowhere and they’re equally culpable?

  10. anonymous 2.12. There’s nothing wrong with investing in education, health, policing etc and I am more than happy for my taxes to be used in these areas.

    What sickens me is the obscene waste that occurs. I mean taxes (direct or indirect) have soared since 1997 and i dread to think how much is wasted.

    Take the wage credit system that operates – a massive bloated public sector scheme employing thousands of people effectively taking money through tax from a person and then giving it back to them through a credit. All you really needed to do was increase thresholds – job done. thank you. £billions saved.

    Thats before we talk about the £billions wasted on benefits system that makes it profitable to stay out of work, £billions wasted in pen-pusher jobs for life. The list is endless.

  11. Anonymous 4:00 pm, what you are not taking in to consideration with your wasted money, is that most of the government workers earn less than 16k per annum, I think its around 78%. For example most rubbish collectors earn around 13.5K, work for 40 years and would receive a pension of around 6.8K per annum.

    I very much doubt you would get up at 4am and collect rubbish for the same wage.

    You obviously must be a Sun reader, with such narrow mindness and disregard to what will happen to your services once they are privatised.

    From Telecoms, Gas, water, Rail network etc, they all now cost us a fortune.

    The post office allows you to send a first class letter for 42p, try and find a private company to provide the same service.

    I agree that Labours attempt to provide an easy life for lay abouts who do not want to work has been very successful. Such an open social system has been abused to beyond belief and the conservative party are at least attempting to solve this problem.

    What didn’t help is Conservatives scrapping of the Social ID card system which had 6 months left to complete. The system had been developed over the last 4 years at a cost of £3.5 billion. With around £500 million left in development costs, the card system would have stopped all the duplication fraud which estimatly costs the government around £2 billion a year.

  12. When the economy’s booming so do tax receipts and it is those additional tax revenues that should be used to pay down money borrowed during lean times when the economy is in need of a boost from public spending.

    What Crash Gordon did was exactly the opposite. Instead of paying off past borrowings, he just borrowed more and more and more. Given the unavoidably cyclical nature of all economies, how and when did he ever think all that extra borrowing was going to be repaid?

  13. History is a great teacher, its a shame most people have short memories. In 1982, 300 economists wrote a letter to the government stating that the cuts being announced would continue the woes of the country. They were ignored and the country greatly benefited from the increase in GDP there after.
    Things have to be dealt with sooner rather than later, and yes New Labour went back to being old Labour and spent way more than we could afford now or in the future. Childish really, a school boy would have done a better job of the finances.

  14. The main problem is we have a system that deals with short term politics, the demographic profile of our population has been long known, and part of our current problem is our increased spending on pensions and health care, because we are living longer and there are more pensioners than before. Labour should have fixed the roof while the sun was shining, it’s spending policies were unsustainable, and it seems it’s main concern is to be re- elected. If ever there were a time to have a halt to party political bickering it is now. We have to sort our financial mess out before it is too late, we also need to look to future sustainability of essential resources ie fuel and food. We are far too dependant on imports, need to restore some self sufficiency and a stable manufacturing base in the UK. Global power HAS shifted, and will continue to do so, we need to adjust to a “new reality” as our current problems are the foretaste of issues that will become more pressing.

  15. Given many western economies are in effect “broke” something has to change and to expect us to be able to continue paying for the “welfare state” at ever increasing cost is utter madness.

    The problem has not been solved and does not look like being so and the present Government is trying to keep the roof over our heads but with everyone wanting “more” we will continue on the same road of until there are no other options left.

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