Why Labour MPs should support the fiscal charter

Members of Parliament will be voting on the fiscal charter this evening.

The Charter for Budget Responsibility would force the Conservatives to make a surplus by 2020 and mean future governments would have to maintain the surplus as well. The SNP has strongly opposed Chancellor George Osborne’s proposals.

In an article on their website on Monday, SNP Westminster Leader Angus Robertson MP said: “The SNP has been calling on Jeremy Corbyn to join us in voting against the UK government’s budget plans.

“Every single Labour MP must now join the SNP and vote no to Tory austerity or their credibility will be in ruins.”

A day later, the Labour Party made a U-turn. Labour MPs are now expected to vote against the new charter.

In a letter to Labour MPs quoted in The Guardian, Shadow Chancellor John McDonnell said: “I believe that we need to underline our position as an anti-austerity party by voting against the charter on Wednesday.”

He also wrote an article for The Mirror, where he said: “George Osborne is pretending he wants Parliament to tie his hands.

“What he’s really trying to do is play Westminster a trick, and tie ours.”

Voting is expected to take place at 8:30pm this evening.

 

Analysis:

If the charter is approved, then what we have to consider is that it won’t tie the hands of any political party in government. All future governments would have to deal with the charter, as well as the current government who would be under the pressure to reach the initial surplus by the end of 2019/2020.

In September, Jeremy Corbyn promised ‘a new kind of politics’ and Labour members believed him by voting him as their leader. However, the party still needs to keep the promises and regain the trust of the public on certain areas. In particular, Labour is often criticised by the Conservatives for constantly spending and borrowing. If Corbyn wants to deliver ‘new politics’ then surely Labour MPs voting in support of the charter will show that the party is moving in a positive direction? The charter will regulate future governments in borrowing and spending – why isn’t Labour supporting the charter when it may finally dispel the Conservative belief that they only spend and borrow all the time?

In their General Election 2015 manifesto, Labour said: “This manifesto sets out that we will only lay a Budget before the House of Commons that cuts the deficit every year, which the OBR [Office for Budget Responsibility] will independently verify.

“We will get national debt falling and a surplus on the current budget as soon as possible in the next parliament. This manifesto sets out that we will not compromise on this commitment.”

Of course, the party is now under the leadership of Jeremy Corbyn, but the aim of getting a surplus must still be present, surely? With this new charter, the Conservatives are forcing themselves to achieve a surplus by the end of 2020, so why is Labour voting against this?

Whilst an independent regulator – such as the OBR according to the 2015 Labour Manifesto – would help with the economic planning of a government, it is nothing concrete and it’s not legislation.

Not only will the new charter be a better way of regulating government finances, but in terms of the Labour Party, it will give party members and supporters the trust they need.

It’ll come at a time when the party is still recovering from the General Election defeat and is desperate to get rid of the Conservative idea that they borrow and overspend. The charter would be give reassurance to members of the party.

 

By Liam O’Dell

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