Labour U-turns on budget surplus plans

Labour is set to perform a dramatic economic policy U-turn by voting against Chancellor George Osborne’s plans to force future governments to operate a budget surplus, according to reports.

According to the BBC, shadow chancellor John McDonnell has told MPs the party will oppose the measure in a vote in the House of Commons on Wednesday. He previously suggested Labour would support the Government’s proposals.

McDonnell said by doing this Labour would “underline our position as an anti-austerity party”.

Speaking on BBC Radio 4’s Today programme, former Labour shadow chancellor Chris Leslie said: “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.”

“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.”

Wednesday’s debate will see MPs vote on Osborne’s Charter for Budget Responsibility, a measure that would legally block future governments spending more than they receive in tax revenues when the economy is growing.