Bernard Ingham: Balls must go if Labour is to be taken seriously

This is the lesson from another continuingly severe bout of market jitters that wiped £200bn off UK shares – $3trillion globally – in one week and downgraded the mighty United State’s credit rating.

Why did panic take hold of the stock markets? Not because we are not spending our way out of recession – to Balls’ apparent disgust. It is because most bankrupt countries in the EU and the US are not doing enough to restore their national finances to some sort of respectability.

Essentially the politicians are tinkering with the problem when they are not lining Greek featherbeds with more down. They show all the urgency of people who hope somehow debt and why it has built up will go away. It won’t.

That is why Balls must go. He is a total liability – all brains and no judgment, as Aneurin Bevan is once reputed to have said rather unfairly of Harold Wilson.

I recognise, of course, that Balls’ supporters – and there is no accounting for stupidity – argue that it wasn’t the ordinary people who caused this mess, so why should they suffer. It was the bankers and they are still raking it in. Well, up to a point, Lord Copper. The bankers were given far too much rope by the authorities. Governments were only too happy to ride the boom and our then Chancellor, Gordon Brown, closely advised by Balls, spent money like water. He is still of a mind to do so according to his weekend Plan for World Salvation Mark II. He left us in hock to the moneylenders when the credit bubble burst.

The longer we fail to tackle spending and borrowing the worse it will be for the ordinary people who always have to bail out bad judgment by their so-called betters. Balls would merely compound their pain.

I have my doubts whether David Cameron and George Osborne are doing enough quickly enough to bring the economy into better balance. But so far their record is better than most. At least, they recognise that we have drastically to reduce our deficit and debt.

I also readily admit my doubts about anybody who calls himself an economist. In my experience, they are mostly too clever by half. Over the last 30 years 364 of the blighters could not have been more wrong in telling Margaret Thatcher she would wreck the British economy.

It was Nigel Lawson’s shadowing of the deutschmark behind her back that led to a resurgence of inflation. They still campaigned for the UK to join the EU exchange rate mechanism to help manage our affairs. No sooner had we been forced out of it than the economy bounced back.

And then we had the Blair/Brown/Balls decade of mismanagement, which partly explains why we are where we are now. As the Queen once asked: why did no one tell us the crash was coming?

I rest my case.

After all that, you may find it difficult to believe I have no wish to suppress bright ideas, even from economists. But we have to recognise that Mr Micawber had it fundamentally right. Either we live within our means or we risk pain.

In the 1980s, Thatcher took it as a compliment that they insultingly called her careful approach housewifely economics

We need more rather than less housewifely economics that redeems not incurs debt. Balls is incapable of providing that.

But we need one other thing, too – something the coalition is very bad at. I refer to patient explanation by Ministers. If I had my way, I would require the entire Government and its supporters on the Backbenches to go out like itinerant preachers to explain, according to a brief, the essential economic facts of life.

Nor would it stop there. They would also be required systematically to explain, according to factual briefs, their plans for education, the NHS, welfare, criminal justice – indeed whatever they are trying to do. We never get beyond a soundbite these days.

There is a chasm of understanding between Government and people. It has to be bridged.

Ed Miliband has exactly the same problem. Not until he ditches Balls will Labour reach first base on the comeback trail. Only then will people recognise things have changed.