Surprised? This Writer was – but perhaps we shouldn’t be.
Labour’s position on the Charter for Budget Responsibility, which was trailed by the Tories in the run-up to the general election, has been interpreted and reinterpreted to death by the party’s political opponents.
Initially, under Ed Balls and Ed Miliband, the party supported the charter – on the assumption that the Tories weren’t going to win the election and wouldn’t have a chance to put their idea of what it means into practice.
Others, such as the SNP, immediately claimed that this meant Labour supported the Tory plan to cut £30 billion of public spending. This was nonsense, as This Blog pointed out at the time.
In fact, SNP leader Nicola Sturgeon herself performed a U-turn within weeks of the election. On May 26, she said: “The Charter for Budget Responsibility allows the UK government flexibility to increase spending over its current plans, while still reducing the deficit and debt.” This is a far cry from her previous claim: “The cuts that are required to meet the fiscal criteria in the Charter for Budget Responsibility is £30 billion over the next two years.”
In fact, the Charter does not mention any money figures at all.
Now the SNP – and all the others – will be accusing Labour of U-turning, and of copying the Scottish nationalists; both will now be opposing the Charter and publishing their own alternative proposals.
Shadow Chancellor John McDonnell has announced his reasons in a letter to fellow Labour MPs. The Charter commits the government to balancing the books within three years, provided there is not another global crisis. Mr McDonnell wrote: “In the last fortnight there have been a series of reports highlighting the economic challenges facing the global economy as a result of the slowdown in emerging markets.
“These have included warnings from the International Monetary Fund’s latest financial stability report, the Bank of England chief economist, Andy Haldane, and the former Director of President Obama’s National Economic Council, Lawrence Summers.”
The parlous state of the global economy seems to have provoked a change of heart from Mr McDonnell – or given him an opportunity to underline Labour’s new economic policy. He wrote: “As the nature and scale of the cuts Osborne is planning are emerging, there is a growing reaction not just in our communities but even within the Conservative party. The divisions over the cuts in tax credits to working families are just the first example of what we can expect as the cuts in other departments are exposed and the failure to find additional resources to bridge the growing expenditure gap in service areas like the NHS is revealed.
“I believe that we need to underline our position as an anti-austerity party by voting against the charter on Wednesday. We will make clear our commitment to reducing the deficit in a fair and balanced way by publishing for the debate our own statement on budget responsibility. We will set out our plan for tackling the deficit not through punishing the most vulnerable and damaging our public services but by ending the unfair tax cuts to the wealthy, tackling tax evasion and investing for growth.
“We will rebuff any allegation of being deficit deniers by publishing for the debate our own statement on budget responsibility. We will set out our plan for tackling the deficit not through punishing the most vulnerable and decimating our public services but by ending the unfair tax cuts to the wealthy, tackling tax evasion and investing for growth.
“I have consulted members of the economic advisory council … and the general view is the same. Although we need to continue to bear down on the deficit, they believe that this is not a time in any way to undermine investment for growth strategies.”
According to Paul Mason of Channel 4 News, Labour had planned to move its own alternative to the charter, and to table amendments – but he wrote: “I understand both these possibilities have been ruled out by the clerks of the Commons.”
According to the BBC, George Osborne said Labour’s economic policy had “lurched from chaos to incredibility
“Two weeks ago they said they were going to vote for a surplus – now we know they want to keep on borrowing forever. That would be a grave threat to the economic security of working people.”
Interestingly, Vox Political has already published a response to these claims:
Mr McDonnell’s decision cements Labour’s position as an anti-austerity party – eliminating criticisms from several areas of the political arena, not least the Labour Party itself. But they’ll try…
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