Shadow cabinet told to clear spending pledges

By George Parker, Political Editor

Published: February 16 2011 22:46 | Last updated: February 16 2011 22:46

Ed Miliband and Ed Balls have laid down ground rules to their Labour shadow cabinet colleagues on how they intend to exert an iron grip on everything the party says between now and the election.

The “two Eds” have moved into adjoining offices in a suite once occupied by David Cameron and George Osborne in opposition, and clearly want to enjoy the same kind of central control over their own party.

Mr Miliband, Labour leader, and Mr Balls, shadow chancellor, have written to shadow cabinet members telling them that every policy announcement and spending commitment must be cleared first from the centre.

But the letter is almost as much about laying down the rules of the game between Mr Miliband and Mr Balls as it is about laying down the law to the shadow cabinet.

The Labour leader and his shadow chancellor were once Treasury colleagues who became rivals for the party leadership in 2010; their relationship has been marked by mutual suspicion in recent months.

Mr Miliband gave the post to Mr Balls only after Alan Johnson resigned for personal reasons. The Labour leader wants to ensure he retains control over all aspects of policy.

The letter, therefore, stresses the unity of purpose between the two men: “As leader and shadow chancellor, we are as one in our determination that those pledges on spending and on taxation that we do make at the time of the next election are clear, costed and affordable and consistent with our overall strategic objectives.“

To that end, the letter says shadow ministers must clear anything that changes Labour’s position on tax and spending with the shadow Treasury team “in addition to the leader’s office”.

To underline the unity theme, it adds: “Any new statements with spending or economic implications will be cleared with the leader’s office and shadow treasury teams working closely together.”

Angela Eagle, shadow chief secretary to the Treasury, will have the task of ensuring Labour does not promise to reverse unpopular Tory decisions unless it can show how it will fund those commitments.

However Mr Miliband makes clear that Mr Balls’ writ does not extend to those policies with neither spending nor economic policy implications. “They will be cleared with the leader’s office,” the letter says.

“We very much hope this process will support rather than hinder your work in developing a clear and ambitious agenda for a future Labour government,” the letter concludes.

The Conservatives scoffed at the idea that Mr Balls and his colleagues were showing any responsibility on fiscal issues, arguing that the shadow chancellor opposed the value added tax rise to 20 per cent without saying where Labour would find the replacement for the £13.5bn of revenue it raised.

Mr Balls’ team said while he was critical of the VAT rise he had never committed himself to reversing it.