Shadow Chancellor Ed Balls this week went to Israel, saw the light, returned to England and felt the heat, writes Stephen Oryszczuk.

“The most surprising aspect of the trip was arriving back to find Britain was hotter and more uncomfortable than the Middle East in July,” he jokes.

He’s speaking to the Jewish News in between parliamentary votes, and comes across affable, as do all politicians when talking to journalists.

But he’s also got some interesting observations on Israel. In particular, he’s interested in the secret to why there are such a startling number of Israeli start-ups, and offers us his thoughts as to what he thinks are the foundations for this success.

“It starts with the entrepreneurial spirit and drive of the people,” he says. “For a range of different reasons, this is a very diverse, innovative and exciting place to be. That’s reflected in the commitment to learning, to try new things and to take risks through innovation. So you’ve got to start with the entrepreneurs themselves and the basic researchers.”

He’s clear that there is a lot to learn from Israel, and one of the most important learning points for Balls is the focus on public-private partnership.

“It’s certainly not UK-style public or private,” he explains. “It’s very much a partnership. There is a lot of government money but also a huge amount of private sector leadership.”

He’s right to take the lessons. With low inflation low, falling national debt levels, rising real wages and growth forecasts of 3.5% and above, Israel must be doing something right.

Applying those lessons to the UK, Balls suggests that he would bring back something akin to the now-defunct Regional Development Agencies, adding: “They were at the heart of the innovation process, working with universities and companies,” muses the Labour man.

He applauds the way the Israeli government acts as midwife to these ideas, helping embryonic companies get on the business ladder.

“You’ve really got to drive ideas out of the universities and into the marketplace, and the government comes into this start-up equation with early-stage finance,” he says.

“The [Israeli] chief scientist is heavily involved in these incubators and start-ups can access support through direct government grants when they wouldn’t otherwise get finance in the early stages… It works in Israel and I think it can work in Britain.”

Balls’ backing for UK government grants to risky start-ups is the ironic prelude to his subsequent observations of superstar Finance Minister Yair Lapid, with whom he discussed “keeping government spending under control while boosting economic growth”.

“He’s engaging and thoughtful,” says Labour’s second Ed. “It’s a baptism of fire for someone coming from the outside into politics. You’re either beaten down or invigorated by it, and he looked pretty invigorated!”

On his visit to Ramallah, he praises Sir Ronald Cohen’s Portland Trust for its help in the construction of emerging West Bank city Rawabi.

But when asked about how Britain could support the Palestinian economy, Balls’ drifts off into vague talk of John Kerry and the peace process. It is a woefully inadequate response for someone preaching the “vital importance” of Palestinian economic health.

Back on safer ground (UK-Israel bilateral ties), Balls regains his strength, and takes aim at London’s global suitors in the race for Israel’s heart.

“Israeli companies’ starting point tends to be a relationship with an American firm, but I think there’s a huge amount of strength the Israel-UK bilateral link,” he asserts, stressing that Britain is now Israel’s second biggest export market.

“A great many business leaders don’t understand the depth of expertise in Israel and who wouldn’t naturally think about an Israeli tie-up,” he says. “I don’t think British companies think enough about the potential for partnerships with Israeli companies. That’s something we want to do more of.”