Thursday, 15 October 2015

Elephant Traps

In this article for the Total Politics web site, Labour MP John Mann explains how the party's new shadow chancellor, John McDonnell, walked headlong into an elephant trap set for him by the Conservative Government.

Now everyone knows that the Conservatives are making a great play of the need to balance the nation's spending books which is just smart politics, especially after the worst recession the country has faced since the great crash of the 1930s.

The UK's massive debt mountain is a real problem and the solution cannot be found in borrowing ever more money unless, of course, we want the economy to become a 'basket case' along the lines of our European neighbours in Greece.   

But accepting that the UK has to have a plan for living within its means is not the same as saying that Labour has to sign up to policies and economic programme as the Conservative Government, even if both parties agree that the country's debts have to be paid down to avoid passing the problem onto the next generation of taxpayers.

So it seems that John McDonnell has ended up in the worst of both worlds because  while Labour finally decided to oppose the Government, the party leadership behaved like rank amateurs which makes it even more difficult to persuade an already sceptical electorate that Labour can be trusted again with the economy.           

John Mann MP: John McDonnell’s big climb down

John Mann MP criticises Shadow Chancellor John McDonnell for having "haplessly fallen for the Osborne trap that has been around for many months to debate."

It is strange times that we live in. The three Labour members now on the Treasury Committee have argued, including in public hearings in July, that George Osborne’s Charter for Budget Responsibility is a dangerous straight-jacket for the UK economy.

Set up as a political trick to trap Labour, Ed Balls and Chris Leslie, it has totally ensnared John McDonnell within weeks of his appointment.

Everyone knows that anti-austerity was Jeremy Corbyn’s key political theme and yet McDonnell has haplessly fallen for the Osborne trap that has been around for many months to debate.

A week ago John McDonnell was creating a complex logic to announce that Labour was supporting Osborne’s charter, trying to excuse this through definitions within the Charter. In fact the Charter is a simple document and concept, indeed its simplicity is its inherent weakness.

Then, after some of us informed the Labour whips on Sunday that we were continuing our consistent position and voting against Osborne, McDonnell has done a complete U-turn. He cites changes in the international economy that are so large, so significant and that have only happened in the last two weeks for his change of heart (I honestly am not exaggerating this!).

Just one hour before the Parliamentary Labour Party was due to meet, without McDonnell choosing to speak, he announced his U-turn. Yet in all of this time there has been no debate, nor any consultation within the Labour Party. So two contradictory policy announcements, without a single collective discussion.

The reality is that to have voted with Osborne would have led to political meltdown in Scotland and McDonnell’s political judgement faces some big questions. New Corbyn supporters would have been bemused and demoralised. It would have been a political disaster with huge consequences.

But the economic arguments are much more important than this. Tying a Chancellor’s hand through legislation is shockingly bad economics. Nobody knows what is around the economic corner, be it rises in oil prices, fall-out from the EU referendum or Syria. To straight-jacket the economy in this way commanded no support whatsoever from the economists the Treasury Committee interviewed on the subject and clearly does not command support from the Governor of the Bank of England.

If McDonnell had got his way it would also have been a ringing endorsement for Osborne’s reduction in the amount the state spends on public services, undermining every argument that Labour is making.

Osborne set a trap, McDonnell fell into it and ironically it has been the consistent stubbornness of me and others that have saved the day. We cannot afford another misjudgement like this.

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