Ed Balls to take fight to government on economy

LONDON (Reuters) - The Labour Party named Ed Balls as its shadow chancellor Thursday, a combative figure who is expected to give the Conservative-led coalition a rougher ride on the economy.

Britain's Labour Party education spokesman Ed Balls speaks at the party's annual conference in Manchester, northern England September 29, 2010. REUTERS/David Moir

A close ally of former prime minister Gordon Brown, Balls lost out in a Labour party leadership contest last year and was overlooked for the finance job which he coveted.

Balls, who has considerable experience of economic policymaking from years at the Treasury under Brown, replaces Alan Johnson who quit for family reasons after only three months in the role.

Balls said Prime Minister David Cameron and Chancellor George Osborne were damaging the economy with their deep cuts to public spending to try to erase a deficit of more than 10 percent of national output.

“Our task ahead is to take on George Osborne and David Cameron’s decision to cut too far and too fast, recklessly putting jobs and growth at risk,” Balls said.

“We will hold them to account for the decisions they have taken ... We will set out to the public that there is an alternative: a fair economy which puts jobs and growth first.”

Labour leader Ed Miliband, who has found it difficult to make a big impact as opposition leader, said there would be no big changes to economic policy.

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Economists said Johnson had made a series of gaffes about the economy and the change would help Labour.

“Ed Balls will bring more clout to the role and is likely to be more assertive in attacking the coalition government’s policies,” said Alan Clarke, UK economist at BNP Paribas.

“The coalition is having to make tough decisions with regard to cutting the deficit and this will make a tough job even tougher.”

The Conservatives seized on Balls’ close links to Brown.

The Conservative-led coalition, which took power last May, blame 13 years of Labour rule for the austerity measures now needed to slash the deficit.

“It beggars belief that Ed Balls has been appointed as Shadow Chancellor. The man who is responsible for Britain’s economic mess has returned,” Conservative Party Deputy Chairman Michael Fallon said.

“The Labour Party has learnt nothing and is now led entirely by Gordon Brown’s old team.”

Balls said that drastic cuts to public services would see the government repeating the mistakes made by the Conservatives under former prime minister Margaret Thatcher in the 1980s when unemployment soared and ordinary people suffered.

“We are going to say loud and clear to George Osborne and David Cameron get back in touch, don’t make these mistakes,” he told Sky News.

“We don’t have to do to our country what we did in the early 1980s -- I don’t see why young people, why families, should pay the price.”

Additional reporting by Stefano Ambrogi and Christina Fincher; editing by Tim Pearce and Jason Neely