With the Budget due next week, George Osborne appeared on the Andrew Marr show to warn of the need for further spending cuts. Keen to put forward an alternative vision for the UK economy, Labour’s Treasury team have also taken to the airwaves this morning. John McDonnell told Marr of the need for more long-term investment, arguing that at least 3 per cent of GDP should be used for investment compared to Osborne’s 1.4 per cent.
Alas it seems that Labour’s shadow Chief Secretary to the Treasury had failed to catch this. When Seema Malhotra appeared on the Sunday Politics to help explain McDonnell’s vision she appeared to lack knowledge of any of the specifics. What followed was an awkward exchange as Malhotra repeatedly failed to answer Andrew Neil’s questions on Labour’s economic plan:
AN: You would balance current spending, day to day spending, which at the moment there is a deficit. What would you cut to balance current spending?
SM: You can do two things to balance current spending, and you are right on this. The first is about your spending decisions, the second is about your tax receipts. What we’re arguing is that if you want to see tax receipts grow, George Osborne has seen them fall as a result of the lack of productivity growth
AN: Tax receipts are actually rising
SM: Well we’ve actually gone backwards,
AN: But what would you cut, that’s the simple question. You’d raise some taxes, what would you cut?
SM: Well, we would want to see that growth increases and that you see tax receipts. You cannot spend if it’s not within your means
AN: I’ll try one more time. What would you cut?
SM: If I could just finish, you cannot spend if it is not within your means and what this weekend’s announcement from the Labour party was about is saying it’s about how we earn our way in the world…
AN: You’re not going to tell me are you…
SM: … and survive in a competitive economy
Given that Labour are currently on a mission to win back trust on the economy, Mr S suspects they send a different politician to fight McDonnell’s corner next time around.
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