John McDonnell dismisses plea to Labour ‘rebels’ as ‘stunt’

The shadow chancellor’s comments come after a dramatic U-turn on the fiscal charter, which two weeks ago he said Labour would support, arguing it was a “trap” by Chancellor George Osborne designed to enable the Conservatives to paint Labour as “deficit deniers”.

But at Monday’s gathering of the Parliamentary Labour Party (PLP) at Westminster, Mr McDonnell stunned MPs by saying the party should now vote against the charter, which requires governments to run budget surpluses in “normal times” when the economy is in good shape.

New leader Jeremy Corbyn is now facing the biggest test of his authority so far, with Labour moderates refusing to say whether they will obey the party whips tonight in a crunch Commons vote on the government’s updated Charter of Budget Responsibility.

As Mr McDonnell left his home, he denied the policy was in “chaos” and dismissed the chancellor’s appeal to disgruntled Labour MPs to rebel.

‘Stunt’

“Oh, that’s an Osborne stunt, isn’t it really? I don’t think anyone will rise to it. They’ll see it for what it’s worth: just another stunt,” he said. “We are trying to get on to serious economic debate today, not those sort of stunts anymore.”

Asked if the late shift in stance had confused MPs, he conceded: “Most probably, yes. We have had to change position on a couple of issues but today we’ll clarify everything.”

The U-turn was greeted with open derision by some MPs. Even among those who had been unhappy at the prospect of voting for the charter, there was anger at the way the abrupt change had been handled.

‘Messy’

A senior Labour economic adviser said Mr McDonnell had eventually settled on the right policy but conceded it had “taken some time” and been “messy”.

Former Bank of England monetary policy committee member Danny Blanchflower, one of a number of well-known economists appointed to the opposition’s economic advisory committee, said the panel would always, if consulted, have recommended voting against the government.

Other MPs angrily complained that their economic policy was in disarray and the party had “no credible leadership”. One former minister said it was a “total f****** shambles”, while a senior backbencher was said to have accused Mr Corbyn and Mr McDonnell of acting like “student union presidents”.

Former shadow chancellor Chris Leslie and former shadow business secretary Chuka Umunna were among those who expressed their disappointment at the situation.

Mr Osborne was quick to exploit the Labour leader’s discomfort, saying the party had shown it wanted “to go on borrowing forever”, loading debts on to future generations which they could never hope to repay.

‘Economic cruelty’

“This is not socialist compassion, it’s economic cruelty,” he said. “With Labour’s economic policy in obvious chaos, I call on all moderate, progressive Labour MPs to defy their leadership and join with us to vote for economic sanity.

“Failing that, they should at least follow the advice of the former shadow chancellor – abstain.”