Charter for Budget Responsibility

Jim Cunningham Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell]

I remind the hon. Gentleman that under his own Government’s fiscal rule, the deficit should have been completely eliminated last year, and debt should have dropped but it has increased. I will send him a reading list.

[Mr Jim Cunningham (Coventry South) (Lab)]

When the Prime Minister was first elected last week, she said that she would govern for the many and not for the few. However, in response to questions today about the fact that poverty is affecting many people in this country, she gave the usual answer, which was that we have to have a strong economy. That suggests that she is departing from what she said in Downing Street a few days ago. Does my hon. Friend agree that this has been the longest recession resulting from punitive measures since the second world war? The second world war lasted for six years; this has lasted longer. It is brutal and it is punishing the needy in society.

[John McDonnell]

I was trying to take heart from the fact that when she spoke in Downing Street, the Prime Minister recognised just how divided Britain is between the wealthy and those at the sharpest end of the austerity measures. I was hoping that that would be translated into an acknowledgement today that the fiscal rule must go.

--- Later in debate ---

[John McDonnell]

Good try. Initially last year I thought the fiscal charter was so ludicrous that I was just going to rubbish it or ignore it. Then, as people remember, I made a U-turn because I thought we could defeat it, because we had virtually all the Labour party and others demonstrating that it was ludicrous. We predicted that every target set in the fiscal charter would be missed, and we were right. The Labour party is an anti-austerity party. We will campaign against austerity, but more importantly now, we are campaigning for a long-term future plan of investment.

I think we are winning the argument right across the piece. As I said, from partners in industry and across the political parties—even in the Conservative party now, as we saw in the leadership campaign—there are voices calling for hundreds of billions of pounds of investment. We are winning that argument. The problem is now that we need decisive change from Government with regard to the fiscal rule; otherwise Britain will remain on hold.

[Mr Jim Cunningham]

I am sure that one of the things that my hon. Friend learned, as I did, during the referendum was that, as I mentioned, the British people have had enough of austerity. They want politics to change. They want investment. Some of my hon. Friends have mentioned the areas of investment. It is important that we learn the lesson of the referendum—that people have had enough of austerity.

[John McDonnell]

Many voted to leave on the basis that they and their towns and regions felt left behind as a result of seven years of austerity, which have brought about high levels of poverty, lack of investment, and low-paid jobs and insecure jobs. As a result, I think there was an expression of anger in the referendum about a whole range of issues. People were saying to the Government, “We’re not satisfied with your performance, we’re not satisfied with the way we are being governed and we want change.”