Isabel Hardman

Labour U-turn on fiscal charter to ‘underline our position as an anti-austerity party’

Labour U-turn on fiscal charter to 'underline our position as an anti-austerity party'
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John McDonnell has just made his first U-turn as Shadow Chancellor, announcing that Labour will vote against the fiscal charter on Wednesday - having previously told the Guardian that it would support it. Labour’s support for the charter was previously to show that it wants ‘to balance the books, we do want to live within our means and we will tackle the deficit’, but in a letter today to MPs, McDonnell says:

‘I believe that we need to underline our position as an anti-austerity party by voting against the charter on Wednesday.’

Labour will publish its own statement on budget responsibility before the debate. The new politics does look rather like the old politics right now, with straight talking still apparently including rapid changes of heart. That Labour will oppose the charter isn’t a great surprise. It was more surprising that McDonnell was ever prepared to say his party would support it: but his intervention in the Guardian came at a time when he and Corbyn were trying to neutralise every attack line about them, from their foreign policy allegiances to their views on public spending, ahead of the Labour conference.

Many in Labour believe the party is currently in a critical window for defining itself economically for the 2020 election - though some believe that window shut during the leadership contest and will not open until after the nest General Election. At best, the party appears confused, but at worst, it appears anti-austerity, which those who’ve done the hard work of looking into why their party lost in May have argued is one of the things that turned voters off. Of course, John McDonnell and Jeremy Corbyn think that being anti-austerity is exactly what Labour does need to appear in order to win again, which begs the question of why they bothered to say anything else at all.

MPs will discuss this at PLP tonight: it will be interesting to see if any of those worried about that window for defining the party think it is worth speaking up about their concerns.