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Fiscal row flags up tensions in Labour

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Issue 2475
Labour deputy leader Tom Watson
Labour deputy leader Tom Watson (Pic: Benjamin Ellis on Flickr)

Bungling baron George Osborne was set to push through a fiscal charter in parliament this week.

It is the fourth such vote in five years. Osborne is partly playing parliamentary games. 

He keeps changing his economic targets and then congratulating himself for not quite meeting them.

But it is also a repeated attempt to copperfasten austerity into legislation. Osborne’s handling of the economy is an assault on the working class disguised as fiscal caution. 

Instead of attacking this, the Labour Party has turned on itself.

In the run-up to the Labour conference shadow chancellor John McDonnell backed the charter. 

The new Labour leadership had blinked and wanted to appear to be reasonable. 

McDonnell claimed the charter did not define the “normal times” when borrowing was forbidden. 

And that, unlike Osborne, he would achieve a surplus by “investing” to grow.  

Except the charter did—and it rules out borrowing money to invest it. McDonnell was pledging to support something more pro-austerity than anything former Labour leader Ed Miliband had backed.


The shift back to opposing the measure was the right thing to do.

But Labour MPs pounced on the opportunity to denounce the left wing leaders of their own party. 

For all the noise none of them are calling for Labour to back the charter. So what is going on? 

The tension at the centre of Labour is simple. Thousands of people look to Corbyn and McDonnell to stand up to austerity. But very few of them are Labour MPs. There are sustained efforts to destabilise Corbyn’s leadership or blunt its effect.

This was a small indication of the pressure being put to keep the consensus in favour of attacking the poor.

Another was the concerted attack on deputy Labour leader Tom Watson over his campaigning over historical allegations of child abuse.

Getting to the truth about allegations of historical child abuse is difficult. 

But what is clear is that, at various points, sections of the police, security services and the establishment covered up information about politicians raping children.

That the same bodies now seem keener on giving the deputy leader of the Labour Party a kicking than revealing the truth is as tawdry as it is unsurprising.

The establishment is a little rattled at any potential for change. 

The question is whether Corbyn and those around him look to the thousands outside parliament rather than the hundreds of their opponents inside it. Workers’ resistance outside parliament will be key to beating the Tories.

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