Tuesday, 13 October 2015

Labour chaotic U turn over whether to try and balance the books sort the deficit out

Last night at 6pm in the House of Commons the Parliamanetary Labour Party met. Amongst many issues they were told by John McDonnell, their new shadow chancellor, that the labour leadership had now changed their mind and we're going to oppose the charter for budget responsibility. This caused uproar. The shouting and the row genuinely could be heard a long way away in the corridors of Parliament. By all accounts, from Labour MP friends of mine, the meeting was the most chaotic and aggressive they had ever been to. 
What does this mean? The issue is whether labour accept the country's deficit, and are resolved to sort it out... Or they are not. Put simply, are they a serious party willing to make the tough decisions required to sort out the fact that we spend more than we earn as a country? This is not about the causes of the deficit - or how we sort it out. The British people decided their verdict on that at the last election. It is about whether you sign up to a balanced budget. The proposal commits the government to keep the debt falling as a share of gdp each year and then run a surplus by 2019-2020, and then continue to budget to run a small surplus in future times. This is an approach no different to a family's or a business. Two weeks ago labour agreed this was sensible policy. Now they have changed their mind and will oppose it when the Parliamanet votes on it on Wednesday. 
The full BBC report is here. It makes for interesting reading: