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| John McDonnell dismisses George Osborne 'stunt' over budget charter | John McDonnell dismisses George Osborne 'stunt' over budget charter |
| (35 minutes later) | |
| Shadow chancellor John McDonnell says George Osborne's call to Labour MPs to rebel and back his planned government spending rules is a "stunt". | |
| Mr McDonnell acknowledged he "most probably" had confused his MPs after a U-turn on the Tories' policy - but he said the position would be made clear. | |
| The Charter for Budget Responsibility says "in normal times" governments should spend less than they get in tax. | The Charter for Budget Responsibility says "in normal times" governments should spend less than they get in tax. |
| Labour says it will oppose the move when MPs vote on it this evening. | Labour says it will oppose the move when MPs vote on it this evening. |
| Mr McDonnell said his party's approach, and the thinking behind the U-turn, would be made clear in the Commons when the charter - which his party calls a "gimmick" - is debated. | Mr McDonnell said his party's approach, and the thinking behind the U-turn, would be made clear in the Commons when the charter - which his party calls a "gimmick" - is debated. |
| "We have had to change position on a couple of issues but we will clarify everything," he added. | "We have had to change position on a couple of issues but we will clarify everything," he added. |
| On Mr Osborne urging "moderate" Labour MPs to back his plans, Mr McDonnell said: "I don't think anyone will rise to it they'll see it for what it's worth - just as another stunt," adding that he was focused on a "serious economic debate". | On Mr Osborne urging "moderate" Labour MPs to back his plans, Mr McDonnell said: "I don't think anyone will rise to it they'll see it for what it's worth - just as another stunt," adding that he was focused on a "serious economic debate". |
| 'Economic cruelty' | 'Economic cruelty' |
| BBC political editor Laura Kuenssberg said the vote was a "big test" for Labour leader Jeremy Corbyn, with a three-line whip imposed on MPs. | BBC political editor Laura Kuenssberg said the vote was a "big test" for Labour leader Jeremy Corbyn, with a three-line whip imposed on MPs. |
| The charter would legally force future governments to run a budget surplus - which involves spending less than they receive in tax revenue - when the economy is growing. | The charter would legally force future governments to run a budget surplus - which involves spending less than they receive in tax revenue - when the economy is growing. |
| Having previously said Labour would give it its backing, Mr McDonnell informed a stormy meeting of Labour MPs on Monday that he had changed his mind - and told the party to oppose it. | Having previously said Labour would give it its backing, Mr McDonnell informed a stormy meeting of Labour MPs on Monday that he had changed his mind - and told the party to oppose it. |
| Explaining his decision the following day, he insisted he had changed his mind on Parliamentary tactics, not economic policy, and pledged to draw up Labour's own charter to create a "new economic paradigm". | Explaining his decision the following day, he insisted he had changed his mind on Parliamentary tactics, not economic policy, and pledged to draw up Labour's own charter to create a "new economic paradigm". |
| What's George Osborne proposing? | What's George Osborne proposing? |
| Mr Osborne said Labour's U-turn "confirmed they want to go on borrowing forever - loading debts onto our children that they can never hope to repay". | Mr Osborne said Labour's U-turn "confirmed they want to go on borrowing forever - loading debts onto our children that they can never hope to repay". |
| "This is not socialist compassion - it's economic cruelty," he warned, claiming that "unsustainable deficits" hurt the poorest in society most. | "This is not socialist compassion - it's economic cruelty," he warned, claiming that "unsustainable deficits" hurt the poorest in society most. |
| He said the new fiscal rule would commit governments to "acting responsibly" and keeping the public finances in surplus "during normal economic times". | He said the new fiscal rule would commit governments to "acting responsibly" and keeping the public finances in surplus "during normal economic times". |
| He said Labour MPs should at least follow the advice of the former shadow chancellor Chris Leslie and abstain from the vote. | He said Labour MPs should at least follow the advice of the former shadow chancellor Chris Leslie and abstain from the vote. |
| The change in policy was played down by shadow home secretary and former leadership contender Andy Burnham. | |
| "We've come through a leadership election where everyone's taken different positions, and it's messy and the party needs time to regroup," he said. | |
| Mr Burnham said the new leadership needed time to "find its feet", adding that Labour would take a "clear stand" against George Osborne in the Commons vote later. | |
| The UK has run a budget surplus in 12 years since 1948. | The UK has run a budget surplus in 12 years since 1948. |
| Critics have dismissed the charter as a "gimmick" that will either bind the hands of future governments or have so may exemptions to be pointless - and Mr Osborne himself described similar legislation introduced by former Prime Minister Gordon Brown as "vacuous and irrelevant" in 2010. | Critics have dismissed the charter as a "gimmick" that will either bind the hands of future governments or have so may exemptions to be pointless - and Mr Osborne himself described similar legislation introduced by former Prime Minister Gordon Brown as "vacuous and irrelevant" in 2010. |
| Stephanie Flanders, of JP Morgan Asset Management, told BBC Radio 4's Today programme if the charter constrained a government's ability to respond to a downturn, "it goes from being silly to downright counterproductive". | Stephanie Flanders, of JP Morgan Asset Management, told BBC Radio 4's Today programme if the charter constrained a government's ability to respond to a downturn, "it goes from being silly to downright counterproductive". |
| She added: "If it's not going to constrain behaviour, what's the point of it?" | She added: "If it's not going to constrain behaviour, what's the point of it?" |
| Financial Secretary to the Treasury David Gauke defended the policy, saying it would increase the transparency and accountability of the government's economic plans. | Financial Secretary to the Treasury David Gauke defended the policy, saying it would increase the transparency and accountability of the government's economic plans. |
| "We have to ensure that will build up that buffer, that we bring debt down," he added. | "We have to ensure that will build up that buffer, that we bring debt down," he added. |