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Labour facing rebellion over opposition to government budget rules | Labour facing rebellion over opposition to government budget rules |
(about 1 hour later) | |
The Labour leadership is trying to contain a rebellion among MPs over its opposition to government spending rules - with a Commons vote being seen as a test of Jeremy Corbyn's authority. | The Labour leadership is trying to contain a rebellion among MPs over its opposition to government spending rules - with a Commons vote being seen as a test of Jeremy Corbyn's authority. |
Labour says it will vote against the Charter for Budget Responsibility, requiring governments "in normal times" to spend less than they get in tax. | Labour says it will vote against the Charter for Budget Responsibility, requiring governments "in normal times" to spend less than they get in tax. |
The opposition originally said it would back the charter but changed its mind. | The opposition originally said it would back the charter but changed its mind. |
It is thought up to 30 MPs could defy the leadership by abstaining. | It is thought up to 30 MPs could defy the leadership by abstaining. |
The BBC's assistant political editor Norman Smith said the actual number of rebels was likely to be lower than 30, but said it was an "important moment" for Jeremy Corbyn in terms of his ability to impose his authority on the party and turn Labour into an unashamed opponent of austerity. | The BBC's assistant political editor Norman Smith said the actual number of rebels was likely to be lower than 30, but said it was an "important moment" for Jeremy Corbyn in terms of his ability to impose his authority on the party and turn Labour into an unashamed opponent of austerity. |
The SNP and Lib Dems have also said they will vote against the fiscal charter, details of which were set out in July's Budget, but it is still expected to be approved by MPs. | The SNP and Lib Dems have also said they will vote against the fiscal charter, details of which were set out in July's Budget, but it is still expected to be approved by 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, shadow chancellor John 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? |
Speaking on Wednesday, 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 discussed. | Speaking on Wednesday, 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 discussed. |
Opening the debate in the Commons, Chancellor George Osborne said the UK must "live within its means" and help equip the UK economy to withstand future economic shocks, arguing that if the UK could not manage to get control of its deficit and debt by 2019, after nine years of successive growth, when would it be able to do this. | |
He accused Labour of being "profligate" and wanting "to spend money we don't have and borrow for ever". | |
"It is not a political gimmick to have sound public finances," he said. "I tell you what is a political gimmick - coming out on the eve of your conference with some policy suggesting you support what we are doing and two weeks later turning up in the House of Commons and voting against it". | |
Former shadow chancellor Chris Leslie, one of those Labour MPs who has said he will abstain, told MPs that the party "should not set its face" against a surplus but said the proposal would not give Mr Osborne sufficient room for manoeuvre in the event of a downturn. | |
The UK has run a budget surplus in only 12 years since 1948. | The UK has run a budget surplus in only 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". |