LABOUR’S economic policy has been branded a “total shambles” by one of its own MPs after the party leadership performed a dramatic u-turn, deciding to vote against the UK Government’s charter for budget responsibility.
The change of heart by Jeremy Corbyn and his Shadow Chancellor John McDonnell, while welcomed by some of their supporters, caused consternation among other Labour MPs at a meeting of the parliamentary party in the Commons on Monday evening.
The Tories ridiculed the Labour move with George Osborne claiming the Opposition’s economic credibility was in tatters. The SNP welcomed the u-turn but said it showed Labour was “in chaos”. It claimed it had come about because of Nationalist pressure.
Ben Bradshaw, the former Culture Secretary, could not hide his dismay, saying as he left the PLP meeting: “Total f***ing shambles.”
A senior party spokesman was unable to say whether the shadow cabinet had met to discuss or approve the change in policy or if Labour MPs would be under a three-line whip to vote against the charter.
Last month, as Labour gathered for its party conference, John McDonnell, the Shadow Chancellor, made clear neither he nor Mr Corbyn were “deficit-deniers” and said: "We will support the charter. We will support the charter on the basis we are going to want to balance the book; we do want to live within our means and we will tackle the deficit."
The charter, which will be debated in the Commons tomorrow, legally commits the Government to balancing the books within three years and running a surplus provided there is no global economic downturn.
But at the PLP meeting Mr McDonnell explained to MPs the party leadership had now changed its mind because circumstances had “moved on”, noting how a series of reports had highlighted the economic challenges facing the global economy as a result of the slowdown in emerging markets.
He also told MPs: “We have to support our comrades in Scotland.” THe SNP has opposed the charter from the start.
Later in a statement, Mr McDonnell explained: “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 London MP added: “Labour 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.”
The Chancellor responded by saying: “Labour's economic policy has lurched from chaos to incredibility."
He added: “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."
Meantime, the SNP welcomed the u-turn but called for “absolute clarity” from the party that all its MPs would oppose the charter.
Angus Robertson, the Nationalist leader at Westminster, stressed how tomorrow’s Commons vote was now a “major test” for Mr Corbyn’s leadership, adding: “Every single Labour MP must now join the SNP and vote No to Tory austerity or their credibility will be in ruins.”
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