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| Version 7 | Version 8 |
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| Labour to oppose budget surplus rule after U-turn | Labour to oppose budget surplus rule after U-turn |
| (35 minutes later) | |
| Labour has withdrawn its support for plans to force future governments to keep a budget surplus, prompting anger among some of its MPs. | Labour has withdrawn its support for plans to force future governments to keep a budget surplus, prompting anger among some of its MPs. |
| Shadow chancellor John McDonnell told MPs they would oppose the chancellor's plan in Wednesday's vote, despite previously saying they would back it. | Shadow chancellor John McDonnell told MPs they would oppose the chancellor's plan in Wednesday's vote, despite previously saying they would back it. |
| He said it would "underline our position as an anti-austerity party". | He said it would "underline our position as an anti-austerity party". |
| Former shadow chancellor Chris Leslie criticised the U-turn and said Labour should set out its own motion. | Former shadow chancellor Chris Leslie criticised the U-turn and said Labour should set out its own motion. |
| The BBC's Eleanor Garnier said some at the meeting of the Parliamentary Labour Party reacted in fury at the decision. | The BBC's Eleanor Garnier said some at the meeting of the Parliamentary Labour Party reacted in fury at the decision. |
| Some at Monday night's meeting also called the situation a "shambles", our correspondent added. | Some at Monday night's meeting also called the situation a "shambles", our correspondent added. |
| "To go from one extreme to the other is wrong in economic terms but also it sends the wrong message to the general public as well," Mr Leslie told BBC Radio 4's Today programme. | "To go from one extreme to the other is wrong in economic terms but also it sends the wrong message to the general public as well," Mr Leslie told BBC Radio 4's Today programme. |
| "I think to be fair to John McDonnell this is a very difficult balancing act, it's a very difficult topic, but it's incredibly important that he is clear and consistent and explains fully not just what Labour's position is but also why he backed George Osborne's surplus a couple of weeks ago and is now against it apparently." | "I think to be fair to John McDonnell this is a very difficult balancing act, it's a very difficult topic, but it's incredibly important that he is clear and consistent and explains fully not just what Labour's position is but also why he backed George Osborne's surplus a couple of weeks ago and is now against it apparently." |
| 'Calm down' | |
| One of leader Jeremy Corbyn's allies, shadow international development secretary Diane Abbott, said some in the party were "only slowly coming to terms with the fact that Jeremy won" the leadership contest. | |
| She said the row over Mr McDonnell's change of heart was "a process story" and said most of the Parliamentary Labour Party were comfortable with the position being taken. | |
| "I suspect my colleagues, on reflection, will calm down," she added. | |
| Chancellor George Osborne said Labour's policy was a "grave threat to the economic security of working people". | Chancellor George Osborne said Labour's policy was a "grave threat to the economic security of working people". |
| The turnaround comes two weeks after Mr McDonnell pledged support for Mr Osborne's plans, saying Labour were not "deficit deniers", at the Labour Party conference. | The turnaround comes two weeks after Mr McDonnell pledged support for Mr Osborne's plans, saying Labour were not "deficit deniers", at the Labour Party conference. |
| MPs will debate and vote on Mr Osborne's Charter for Budget Responsibility on Wednesday. | MPs will debate and vote on Mr Osborne's Charter for Budget Responsibility on Wednesday. |
| The charter would legally prevent future governments from spending more than they receive in tax revenue when the economy is growing. | The charter would legally prevent future governments from spending more than they receive in tax revenue when the economy is growing. |
| The proposal commits the government to keep debt falling as a share of GDP each year and achieve a budget surplus by 2019-20. Governments will then be required to ensure there is a surplus in "normal times". | The proposal commits the government to keep debt falling as a share of GDP each year and achieve a budget surplus by 2019-20. Governments will then be required to ensure there is a surplus in "normal times". |
| Analysis | Analysis |
| By BBC political correspondent Eleanor Garnier | By BBC political correspondent Eleanor Garnier |
| It was a long and difficult meeting of the Parliamentary Labour Party. One MP said it was the worst they had ever been to. | It was a long and difficult meeting of the Parliamentary Labour Party. One MP said it was the worst they had ever been to. |
| Jeremy Corbyn was apparently "read the riot act" and said nothing. Another described it as lacking "any aspect of democratic politics". | Jeremy Corbyn was apparently "read the riot act" and said nothing. Another described it as lacking "any aspect of democratic politics". |
| A former shadow cabinet member told me that it was "without doubt one of the most heated" PLPs and "passions were running high". Others were clearly outraged at the shadow chancellor's change of plan. | A former shadow cabinet member told me that it was "without doubt one of the most heated" PLPs and "passions were running high". Others were clearly outraged at the shadow chancellor's change of plan. |
| As he left the meeting, former cabinet minister Ben Bradshaw branded it a "total shambles". | As he left the meeting, former cabinet minister Ben Bradshaw branded it a "total shambles". |
| John Mann MP was furious; he shouted so loudly at the party's leadership that he was easily audible in the corridor outside. | John Mann MP was furious; he shouted so loudly at the party's leadership that he was easily audible in the corridor outside. |
| Despite that anger, a spokesman for Mr Corbyn said the meeting had been "warm and friendly" claiming the only disagreement had been on the need for there to be more discussion on the issue. | Despite that anger, a spokesman for Mr Corbyn said the meeting had been "warm and friendly" claiming the only disagreement had been on the need for there to be more discussion on the issue. |
| It all shows the seriousness of the cracks within the party and many in Labour will worry about how much worse it could all get. | It all shows the seriousness of the cracks within the party and many in Labour will worry about how much worse it could all get. |
| 'Chaos to incredibility' | 'Chaos to incredibility' |
| But on Monday, Mr McDonnell said there was a "growing reaction" to the "nature and scale" of public spending cuts, which had prompted the change of position. | But on Monday, Mr McDonnell said there was a "growing reaction" to the "nature and scale" of public spending cuts, which had prompted the change of position. |
| "We will underline our position as an anti-austerity party by voting against the charter on Wednesday," he said. | "We will underline our position as an anti-austerity party by voting against the charter on Wednesday," he said. |
| "Labour will set out our plan for tackling the deficit, not through punishing the most vulnerable and decimating our public services but by ending the unfair tax cuts to the wealthy, tackling tax evasion and investing for growth." | "Labour will set out our plan for tackling the deficit, not through punishing the most vulnerable and decimating our public services but by ending the unfair tax cuts to the wealthy, tackling tax evasion and investing for growth." |
| Mr Leslie said Labour should set out its own motion in response to Mr Osborne's plan. | Mr Leslie said Labour should set out its own motion in response to Mr Osborne's plan. |
| "We certainly shouldn't be ideologically wedded as George Osborne wants to be to having a surplus regardless of what's happening to the economy and public services," he said. | "We certainly shouldn't be ideologically wedded as George Osborne wants to be to having a surplus regardless of what's happening to the economy and public services," he said. |
| "But I don't think it is right either to be ideologically wedded against the idea of a surplus. | "But I don't think it is right either to be ideologically wedded against the idea of a surplus. |
| "Sometimes a surplus is necessary and can be a good thing." | "Sometimes a surplus is necessary and can be a good thing." |
| Austerity battle | Austerity battle |
| Mr Osborne said Labour's economic policy had "lurched from chaos to incredibility". | Mr Osborne said Labour's economic policy had "lurched from chaos to incredibility". |
| "Two weeks ago they said they were going to vote for a surplus - now we know they want to keep on borrowing forever. That would be a grave threat to the economic security of working people," he said. | "Two weeks ago they said they were going to vote for a surplus - now we know they want to keep on borrowing forever. That would be a grave threat to the economic security of working people," he said. |
| At the weekend, SNP leader and Scottish First Minister Nicola Sturgeon challenged Labour to join her party in voting against the charter. | At the weekend, SNP leader and Scottish First Minister Nicola Sturgeon challenged Labour to join her party in voting against the charter. |
| Welcoming the U-turn, Angus Robertson, SNP leader at Westminster, said it was "promising" but added it was "disgraceful there has had to be any doubt that the Labour Party would oppose Tory cuts". | Welcoming the U-turn, Angus Robertson, SNP leader at Westminster, said it was "promising" but added it was "disgraceful there has had to be any doubt that the Labour Party would oppose Tory cuts". |
| He said the vote would be a major test for Jeremy Corbyn's leadership, claiming Labour's credibility "would be in ruins" unless every one of its MPs voted against the charter. | He said the vote would be a major test for Jeremy Corbyn's leadership, claiming Labour's credibility "would be in ruins" unless every one of its MPs voted against the charter. |
| The independent Office for Budget Responsibility would be responsible for policing the new rules. | The independent Office for Budget Responsibility would be responsible for policing the new rules. |
| It would also have the power to decide when the government should be able to spend more than it is taking in revenue - for example, when the country is in a recession. | It would also have the power to decide when the government should be able to spend more than it is taking in revenue - for example, when the country is in a recession. |