Much of the information that follows is from a Graun article so will need pruning to rid it of the anti-Corbyn bias.
John McDonnell, the shadow chancellor, will promise to match Jeremy Corbyn’s new politics with a new economics, including a pledge that the next Labour government will live within its means but run a different kind of economy.
In his first setpiece speech to the party conference, McDonnell will propose a review of the major economic institutions, a new remit for the Bank of England and a bigger economics role for the business department as opposed to the Treasury.
McDonnell will insist he understands the need to bring the current account deficit under control. He has said he will vote for the new charter of budget responsibility set out by George Osborne and due to be endorsed by parliament shortly.
McDonnell has promised he will review the role of the Treasury so that it focuses on fiscal policy and revenue collection. He will promise a drive to end corporate tax evasion and, like the party leader, will point to specific firms deemed to be involved in tax evasion.
He is likely to call for the 15-year-old mandate of the Bank of England to be broadened so that it has a wider brief to achieve economic growth, as opposed to keeping inflation under 2 per cent a year.
McDonnell told the Guardian: “We are just reassuring people … we will tackle the deficit, we will live within our means. What I am also saying is that everything we put forward as a policy we are going to test and test again rigorously.
“I am asking George Osborne if he will allow us access to the Office for Budget Responsibility (OBR) and to the Treasury model. I will also be asking Mark Carney if we can have access to the Bank of England models to be able to test all these policies. My argument is these are all paid for by taxpayers’ money. It should be open to any political party elected to parliament to have access to that sort of information and resource. When we go into government, we will introduce that as a parliamentary convention as well.”
McDonnell will make clear he does not support local council leaders setting illegal budgets in the face of spending cuts.
All the above seems pretty good, which is probably why the Grauniad‘s original article sprinkles in plenty of sceptical extras to encourage doubt among that paper’s readership. The pledge to live within the UK’s means, within a different kind of economy is said to come “after his predecessor Chris Leslie told him to tone down his negative rhetoric to business and spell out what he planned to do to make Labour an anti-austerity party”. Chris Leslie is a former Shadow Chancellor with less than four months’ experience in the role. He was a caretaker. He has no authority to tell John McDonnell anything. All he can do is suggest.
His decision to support the Charter for Budget Responsibility is said to have “caused confusion among some party moderates who find that decision hard to square with McDonnell’s attacks on Ed Miliband’s economic policies”. Translation: Right-wingers have been trying to spin it to suggest hypocrisy. But McDonnell has already shown that the Conservative Party cannot balance the budget by 2019-20 using austerity policies, and is putting forward alternative proposals based on investment and economic growth.
Incidentally, when did “moderate” become a euphemism for “right-wing”? It’s misleading and all members of the mainstream media need to stop using it.
Oh, and there’s a degree of editorialising in the Graun story, too. The line that “McDonnell faces a stiff task to overhaul Labour’s reputation on economic competence and advance a tougher anti-austerity agenda” has no place in an article that should be reporting the facts. Labour’s reputation on economic competence was trashed by a Tory propaganda machine that pumped the lie down our throats that Labour government overspending caused the financial crisis, when we know that it was poor business practices by the major banks that caused a global financial crisis. Labour policies started to restore the economy after the crisis was over, but then the Conservatives came into office as part of the Coalition Government and it was George Osborne’s policy that killed the recovery stone dead. Only a fool would believe that Labour is economically incompetent.
Finally, the Graun tells us Mr McDonnell’s aides “insist he is not seeking to interfere with the Bank [of England]’s independence”. Nobody else suggested otherwise.
Spin. See how it works?
Update: The BBC is reporting that McDonnell is to advocate a so-called ‘Robin Hood’ financial transaction tax on stock market trading. David Hillman, of the Robin Hood Tax campaign, is reported as saying it would be levied on stock and foreign exchange trades, “to have the banks and hedge funds pay for, or at least contribute to paying for, the immense economic damage their gambling… had caused.”
The BBC also says Mr McDonnell will announce a review of Her Majesty’s Revenue and Customs to find out how it could beef up its efforts to collect the billions of pounds avoided by UK companies and individuals every year. “During his Labour leadership campaign, Jeremy Corbyn claimed £120bn could be recovered from tax avoidance and evasion – enough to pay off the deficit without cutting welfare or public spending. But critics, including the then shadow chancellor Chris Leslie, said it was not a plausible policy and would not work.”
See why we shouldn’t trust Mr Leslie’s claims?
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