Swallow this, critics: Labour will oppose the Tories’ fiscal charter

[Image: Guardian.]

[Image: Guardian.]

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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12 thoughts on “Swallow this, critics: Labour will oppose the Tories’ fiscal charter

  1. Michael Broadhurst

    about time Labour starting ripping Tory austerity plans to pieces.if they had concentrated on this in the run up to the general election,they just might have won.

    1. Mike Sivier Post author

      I have never denied Labour’s support of the charter.
      My denials have been reserved for SNP (and other) interpretations (let’s call them that) of what that support has meant.
      For clarity: The charter never dictated how a government should achieve the aims it set out.
      SNP leader Nicola Sturgeon, despite attacking Labour for supporting the charter, spoke out in support of it herself on May 26 this year.
      Now both parties have decided – independently of each other – that supporting it isn’t a good idea.
      Oh, and Chris Leslie really should cross the floor of the House.

      1. Ron Wilson

        Mike, you were trying to paint Labour as the ‘real’ anti Austerity party, only yesterday, based on the erroneous view that SNP holding budget money over to the following financial year was a ‘cut’ – if that was the case, what does supporting Osborne’s charter mean re cuts?
        Nicola Sturgeon has never denied that UK needs to address the deficit BUT the difference between SNP & Tory/Labour is that the SNP wouldn’t hog tie itself to an arbitrary 2019-20 date, releasing much needed investment into the economy whilst gradually bringing down the overall deficit.
        If Labour had supported the SNP opposition to the Tory fiscal charter from the start they wouldn’t be the shambles they are today.
        Of course, it could be Labour U turned because they thought Corbyn would rebel!

      2. Mike Sivier Post author

        Labour is the real anti-austerity party. That’s not based on SNP activity in Holyrood but on Labour policies, which have trumped SNP policies on every occasion.
        It seems you still misunderstand the meaning of the Charter – and cannot bring yourself to accept that Nicola Sturgeon actively supported that Charter on May 26. If the SNP is to vote against it now, then that means the party has U-turned and cannot accuse Labour over its change of policy without opening itself up to charges of hypocrisy.
        Labour could not support SNP opposition to the Charter when the SNP leader supported it.
        So, why has the SNP U-turned over the Charter again?

  2. Hugorelly

    ‘Charter for Budget responsibility’? What a load of piffle.
    Osborne’s party is the most irresponsible in history, causng the deficit to run out of control – into the trillions now. Meanwhile, Labour actually saved the banks after the 2008 crash, remember – so who’s more ‘responsible’?
    This is just another Tory con trick!

    1. Mike Sivier Post author

      A word of caution: It’s the national debt that is now into the trillions – around £1.5 trillion at the time of writing.
      The deficit has come down – but only to around £100 billion a year, after five years of Osborne’s efforts.

  3. Ron Wilson

    We’ve been over this old ground Mike, what sticks out like a sore thumb is your desperation in painting Labour as anti Austerity. Labour are divided and rudderless on the economy, Trident and welfare. Your readers know it, the dogs in the street know it & Labour MP Mike Gapes knows it, tweeting that the party has “no clarity on economic policy and no credible leadership.” The only question left is when is Corbyn replaced?

    1. Mike Sivier Post author

      No – what sticks out is your inability to address the facts of this matter.
      Labour is providing leadership on the economy and social security – your use of the word ‘welfare’ shows how in-line with Tory thinking you are yourself.
      Vox Political readers are of many differing viewpoints and it is wrong of you to try to comment for them.
      You mention a comment by a single Labour MP in support of your claim – a comment made in the heat of the moment and that he may retract at any time. That’s hardly enough on which to base your argument!
      The only question left is when will the SNP get in line and support Labour’s leadership?

      1. Ron Wilson

        Vox Political readers are savvy enough to make up their own minds, I’m sure a little cut & thrust isn’t going to have them greetin’ in the corner.
        Interesting the phrase ‘get in line’, not sure if it’s a barely concealed authoritarian streak or the same frustrated sense of entitlement that has done for your Scottish branch as they watch the old order changing.
        As for Labour leadership, don’t make me laugh, right now they couldn’t lead a troop of girl guides with a Cabinet openly dissenting from Corbyn’s ‘leadership’ and a directionless ragtag of MP’s not knowing what is coming next.
        Things can only get worse.

      2. Mike Sivier Post author

        I already made that point about VP readers, thank you.
        Nah – “Get in line” means the SNP is not only the smaller party but also the follower, and always has been – despite the overblown claims of its leaders.
        Your comments about the Labour leadership have descended into pointless name-calling. Am I to take it that this is the standard of debate from the nationalists?

Comments are closed.