His remarks go further than most members of the shadow cabinet in saying Labour must be willing to negotiate changes from Brussels to secure what he describes as the fair movement of workers within the European Union.
Speaking at a Progress meeting at Westminster on Tuesday, he said: “Sometimes people talk as if free movement is a pillar of the 1957 treaty and therefore that cannot be debated and discussed, but it cannot be a free-for-all.”
He stressed he thought some reforms could be achieved without treaty change but added: “In order to raise the qualification period for unemployment benefit above six months, something people feel strongly about, in order to stop people sending child benefit back to families overseas while living in our country you might need to have treaty change. I do not think we should say anything that requires treaty change should be off the agenda.”
Balls argued that such treaty changes would not necessarily trigger a referendum in the UK under Labour policy since Labour is only committed to a referendum if there is a transfer of powers to Brussels.
He said: “What I am talking about is managing our labour market in a way that people see as fair. I do think there are some big and difficult issues here about how you manage a union of 28. You cannot bury your head in the sand and say you can have a union of 28 countries and say you will have movement of people that is free and unfettered any more that you can have a market where goods flows freely without proper rules of the game or free movement of capital without that being sound and regulated.”
He also stressed: “We cannot afford to turn away as a party from change or migration or turn the clock back – that is the Ukip position. But we have got to show it is not a free-for-all and that it is being managed.”
He said the phrases “‘free movement, free market, free for all” made people feel like this was not in control.
He added a precondition to voters listening to the party’s wider messages on the cost of living and the health service was a belief that it was tackling the issue of the deficit and immigration. He said: “If I want people in my constituency to believe Labour will deliver a free NHS and tackle the cost-of-living crises, there is a prior thing they also have got to need to know. That is that we are going to balance the books and that we will have tough and fair immigration controls. That is not to do with Ukip – that is just about persuading working people that we will respond to their priorities and what they are about.”
He said he sensed the immigration debate – an issue of “huge concern” in his Morley and Outwood constituency – had shifted from ethnicity to economics. He said: “For people of working age it is about terms and conditions and for some people who tend to be a little older, it is about what is happening to society around them and the pace of change.
“People want to know that when people come they will contribute and they will pay taxes. They are worried about the undercutting of wages, they are worried about the pressure on services. They think it is really important skilled workers come or people come to universities but they want the rules to be tough and fair. If people come to study they have to show they can pay for their courses, borders have got to be policed, we have got to check people in and out, the minimum wage must not be undercut, agency workers rules must not be abused.
“I don’t think they want to leave the EU or to shut the borders at all, they don’t want a free-for-all. They want it to be fair and controlled. “We can win the argument on migration, but not if you won’t talk about it. If you say: ‘There are some issues too difficult and we are not going to talk about it. We don’t know the answers,’ then other people that peddle sophistry and simple answers have a clear field.”
Although his willingness to countenance treaty change on the free movement of labour is new, his remarks would only take him beyond existing party policy if he started to talk about limits on unskilled labour from the EU, something Ed Miliband has not yet countenanced.
The party has in the past discussed requiring companies to train a UK apprentice if it wished to employ a skilled EU migrant, but the policy was criticised by the business sector.
Pressed on the unpopularity of the party leader, he said he believed Miliband would reveal himself in the TV debates, but stressed the party would be presenting as a team and the campaign would not be presidential. “The reality is that we don’t have a presidential system. We have a parliamentary democracy so the team is important,” he said.
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