U-Turn If You Want To

October 13, 2015

Despite accusations of a u-turn, the decision by John McDonnell and Jeremy Corbyn to oppose the government’s “Charter of Fiscal Responsibility” is absolutely the right thing to do. It’s a shame that McDonnell chose to be so mealy-mouthed about wanting to “balance the books” and out-compete George Osborne on deficit reduction.

The charter was never anything more than a trap to ensnare the opposition, and so it has proved. It intends to mandate that the government must run a budget surplus during what it calls “normal times” outside of an economic crisis.

McDonnell writes that “I believe that we need to underline our position as an anti-austerity party by voting against the charter on Wednesday.” This is key. Regardless of how the Labour Party plan to cut the deficit, they need to hammer away at this issue – the major dividing line in the public eye between them and the Tories.

Until it is not seen as irresponsible to make the poor pay for the excesses of the rich, there is no moral excuse for Corbyn and McDonnell to change tack.

At this point, talking about cutting the deficit in a more responsible is not helpful. The next election is five years away. We cannot know how the economy will look in 2020. We do know that people are angry at the government, and that Osborne’s recent cuts to tax credits are increasing that anger considerably.

When confronted with an open goal, you don’t turn around and dribble around the centre circle. You smash the ball home.

Regarding the Charter itself, there is a pressing need to ensure that such measures are rejected. The Tories kicked off the coalition by passing a bill which bound Parliaments to a certain fixed period. They now want to try to bind Parliament to a fiscal orthodoxy of their choosing. This is not democratic in any way, and Labour should make that point very clearly.

Economic policy shifts with circumstances, and in any situation there are many different policy options available. To lay down a single measure of fiscal probity is to reject both democratic input into economic policy making and the contribution of economic experts on a contingent basis. It is fundamentalism dressed up as sound money – and it won’t wash.

Labour has a panel of some of the world’s finest economic minds, ready to advise on how to counterpose this Tory trash with a productive, democratic economic policy. They need to use them, regardless of how many Labour Parliamentarians bemoan the shift away from austerity.

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