Balls defends recession comments

Ed Balls defends his 'financial crisis' comments

Ed Balls has defended his comments at the weekend that the global recession was the "most serious in 100 years".

The children's secretary suggested that the current crisis may be "more extreme" than the 1930s one.

But he told the BBC on Tuesday he was making it clear, as he said Gordon Brown had done, that the global nature of the crisis was "unprecedented".

The Tories said Mr Balls, who was Mr Brown's closest adviser for years, should clarify his "worrying" remarks.

Mr Balls told Labour activists in Yorkshire that the current economic situation was "more extreme and more serious than that of the 1930s".

Political landscape

He said the current difficulties would change the political landscape for possibly the next 15 years.

He added: "The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years as it will turn out."

Mr Balls told the BBC on Tuesday that he had been drawing attention to the unique extent and speed of the global financial crisis, describing it as a "once in a lifetime" sequence of events.

The comments were no different from those made by Gordon Brown and by leading economists in recent months, he claimed.

He also insisted he was not saying that the UK economy could be in recession for 15 years but how the country dealt with its current challenges could shape political debate for a generation.

Mr Balls attended a Cabinet meeting on Tuesday at which the state of the economy was top of the agenda.

Asked about his remarks, a No 10 spokesman said Mr Balls had stressed the "unprecedented" global nature of the economic crisis, the speed with which it had swept across the world and the fact it was "very heavily focused" in the financial markets.

"Those are the points Ed Balls was making," he said. "He wasn't saying anything beyond that."

'Unprecedented'

The Conservatives said Mr Balls' comments contrasted starkly with recent forecasts from the Treasury which suggested the economy could begin to grow again in the second half of 2009.

"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?" said shadow Treasury secretary Philip Hammond.

Liberal Democrat Treasury spokesman Vince Cable said government assessments of the economy were all over the place, Mr Balls' comments coming soon after fellow minister Baroness Vadera talked of the "green shoots" of economic recovery.

He said: "Instead of giving clear and consistent leadership, government ministers are oscillating between complacent optimism and this doom-laden picture of Armageddon. Surely the truth lies between the two?"

Last week, Mr Brown used the word "depression" during prime minister's questions, but his spokesman later said this had been a slip of the tongue.

The Conservatives urged him to clarify his comments and be careful with language.