Ed Balls will thrash out plans with ex-US Treasury Secretary Larry Summers to spark economic growth for families of all incomes in Britain.
Balls’ co-operation with Summers, under whom he studied over 20 years ago at Harvard, comes they are set to co-chair the “Inclusive Prosperity Commission”, which will propose “robust” proposals to ensure the economic recovery is felt by lower and middle-income families and not just the wealthy.
Writing in the Guardian, Balls said he wanted to learn from the US, which grew four times quicker than the UK since the autumn of 2010, after Obama brought in a fiscal stimulus.
"Campervanning through New England three years ago, I was struck by the fear gripping America. Business leaders and commentators saw that another 'global economic hurricane' was brewing. They called loudly for government action to boost growth.
"Most striking then was the contrast between US anxieties and the complacency of Britain's Conservative-led government. Events since have proved their hubris was woefully misplaced, causing lasting damage to the country. Very different policies have resulted in different outcomes for the UK and US economies."
By contrast, Balls criticized Osborne's economic management and warned: "To catch up the ground we have lost since 2010, we would actually need to see growth of 1.3% a quarter for the next two years."
"Ministers will claim this modest return to growth is proof that Osborne's plan has worked. This is a little like Australia's cricket team scraping a draw in the next Test and proclaiming their tour a success."
“This week former US Treasury secretary Larry Summers and I will launch a transatlantic commission on inclusive prosperity to investigate what reforms our countries need to generate more high-wage jobs for the future. Instead of complacent claims that everything is going to plan, Osborne should this week recognise that for ordinary families life is still getting harder. And with risks and uncertainties in the global economy ahead, he should finally act to secure the recovery he squandered three years ago and ensure it benefits the whole country."