Labour ditches its economic policy after two weeks
Labour’s new leadership faced anger and ridicule among its MPs last night after it executed a dramatic U-turn on a key economic policy.
One senior MP stormed out of a heated session of the Parliamentary Labour Party (PLP) addressed by Jeremy Corbyn, protesting that the meeting had been a “total fucking shambles”.
Tempers boiled over after the shadow Chancellor, John McDonnell, announced an about-turn on Labour’s stance in a vote tomorrow over proposed new rules requiring governments to balance the nation’s books.
A commitment to back the Conservative plan was among the key moves set out by Mr McDonnell in his conference speech to the Labour conference two weeks ago.
However, in a letter to MPs he switched his position, citing gloomy reports on the state of the world economy over the past fortnight.
There have been fears on the left that adopting George Osborne’s “fiscal charter” would undermine Labour’s efforts to portray itself as an anti-austerity party and play into the hands of the SNP.
The charter enshrines in law the Chancellor’s target of achieving a surplus by the end of 2019-20 and delivering surpluses every following year “in normal times”.
Aparty spokesman was unable to say-whether the Shadow Cabinet had met to discuss or approve the change in position – or whether Labour MPs would be under a threeline whip to vote against the Osborne charter.
The Bassetlaw MP John Mann described the rapid
change of position as a “huge joke”, while the former cabinet minister Ben Bradshaw left the meeting early, complaining of a “total fucking shambles”.
There were also clashes over a new pro-Corbyn activist group called Momentum, which was set up last week by his leadership campaign team. Blairites have warned that establishing the group could be a first step towards allowing local activists to purge moderate MPs.
Mary Creagh, a former member of the Shadow Cabinet, told the BBC on Sunday that she believed a “purge” was a possibility, and called on Mr Corbyn to clarify the purpose of Momentum.
Speaking before the PLP meeting l ast night, Mr McDonnell said: “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.
“We will underline our position as an anti-austerity party by voting against the charter on Wednesday.”
The Labour spokesman denied that the tone of the meeting had been angry. He said: “There was some discus- sion about the business this week. I thought generally the meeting was quite positive. The only disagreement really was that there needed to be more discussion.”
The spokesman said Mr McDonnell was “quite clear in the meeting that he had spoken to the Shadow Cabinet”. He rejected suggestions that Mr Bradshaw represented the wider tone of the meeting.
Mr Osborne said last night: “Labour’s economic policy has 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.”
Responding to Mr McDonnell’s announcement, the SNP’s leader in Westminster, Angus Robertson, said: “This is promising news but it’s disgraceful there has had to be any doubt that the Labour Partywould oppose Tory cuts, and it is astonishing that they were ever considering voting for the charter.”
Mr Robertson said this week’s vote was now a major test for Mr Corbyn, adding: “Every single Labour MP must now join the SNP and vote no to Tory austerity, or their credibility will be in ruins. However, once again it shows that Labour is a party in chaos, and is deeply divided on the issue of austerity as with so much else.”
Mr Corbyn also urged his party’s MPs to “treat each other with respect” on social media after his shadow International Development Secretary Diane Abbott was accused of being an “internet troll” by a Blairite MP, John Woodcock.
Ms Abbott took to Twitter to denounce Mr Woodcock and fellow Labour MP Jo Cox after they signalled they would support government efforts to launch air strikes in Syria.
Ms Abbott said it was “sad that Labour MPs want to support Cameron in his longheld desire to bomb Syria”, and accused them of “defying the membership” of the party by wanting to “join with the Tories and vote to bomb Syria”.
Labour’s economic policy has lurched from chaos to incredibility