Balls: Crisis more extreme than 1930’s

By staff

The financial crisis is more extreme than that of the 1930’s, Ed Balls has said.

The schools secretary and former economic adviser to Gordon Brown made the comments at Labour’s Yorkshire conference over the weekend.

According to the Yorkshire Post, he said: “The economy is going to define our politics in this region and in Britain in the next year, the next five years, the next 10 and even the next 15 years.

“These are seismic events that are going to change the political landscape.

“I think that this is a financial crisis more extreme and more serious than that of the 1930s and we all remember how the politics of that era were shaped by the economy.”

Shadow Treasury minister Phillip Hammond described the comments as “staggering”.

The Tories said the comments indicate the government considers the crisis more severe than it has previously acknowledged.

“This is a staggering and very worrying admission from a cabinet minister and Gordon Brown’s closest ally in the Treasury over the past ten years,” Mr Hammond said.

“We are being told that not only we are facing the worst recession in 100 years, but that it will last for over a decade – far longer than Treasury forecasts predict.

“Is Ed Balls spilling the beans here and telling us that the government sees the situation as slightly more serious than they have tried to portray?”

Vince Cable, the Liberal Democrat economic spokesman, highlighted contradictions in the government’s statement on the crisis.

“Instead of giving clear and consistent leadership, government ministers are oscillating between complacent optimism and this doom-laden picture of Armageddon,” he said.

“Surely the truth lies between the two?”

The comments are being seized on as further evidence of a deep-seated concern about the crisis in the halls of government which is not being communicated to the public.

Last week, during prime minister’s questions, Mr Brown used the word “depression” for the first time, although it was put down as a slip of the tongue.

Mr Balls added: “We now are seeing the realities of globalisation, though at a speed, pace and ferocity which none of us have seen before.

“The reality is that this is becoming the most serious global recession for, I’m sure, over 100 years as it will turn out.”