Secure and Properly Funded

John McDonnell writes:

The autumn statement on Wednesday will be the first time in 10 years George Osborne will be nowhere in sight for a major fiscal event. 

There will be many who breathe a sigh of relief at that alone. 

But his presence will be heavily felt. 

Not least as the Budget last March contained a black hole as the decisions he had made for the previous six years started to catch up with him. 

However, it also poses the first major test for the new chancellor, Philip Hammond. 

I ask him a simple question: will you genuinely change course on the economy? 

It is a simple yes or no question, but it defines the entire approach he takes to this year’s autumn statement. 

If the Brexit vote taught us anything it is that many people are demanding change. 

The Chancellor and the Prime Minister may want to blame Brexit for our current economic plight but, as a recent leaked Treasury document shows, the damage to public finances was done before the referendum. 

Brexit has simply exposed the fact that the last six years were wasted and that the Tory economic policy they supported every step of the way has failed so many in our country. 

The Budget in March was a prelude to Wednesday, when the Tories are set to fail by their own measure – breaching their own fiscal targets set out in the 2015 Conservative manifesto.

They said they would cap welfare spending and yet they have breached their own cap while punishing working families.

They said they would increase business investment with huge corporation tax giveaways, but it is decreasing and companies are sitting on huge cash piles, not investing.

Yet most of all they have failed because they did not equip our economy for the challenges that Brexit poses. 

The Tories have no answers to meet the task ahead.

Last week, I gave a speech in which I said we now need a positive approach to Brexit.

Let me be clear. I will continue to oppose a “hard Tory Brexit”.

That is because the Tories want to take a Trump-lite approach with a minuscule increase in infrastructure investment, a pernicious immigration policy, the destruction of workplace rights and environmental protections, alongside a race to the bottom in taxes for the rich and in wages for the rest of us.

Labour will oppose them every step of the way in parliament and insist on full accountability for their negotiating positions.

As a democrat, I respect the referendum result.

Not to do so would sow even deeper divisions within our society. 

But that does not mean we cannot use the period of the Brexit negotiations positively to work with our socialist, social democrat and progressive friends in Europe to construct a new relationship based upon solidarity, co-operation and democracy. 

Labour has long argued that there are aspects of current single market regulations that should be reformed. 

The Brexit negotiations provide an opportunity to work with European partners to advance those reforms, such as state aid rules and enforced deregulation and privatisation. 

Labour will press the government to take up that opportunity. 

We must move the debate on from the divisions of the referendum and bring people together. 

We must look to the future, not the past. 

The Tories have no more a plan for our economy than they do for Brexit. 

It is why their handling of the Brexit negotiations has descended into a shambles and why they’re now making up deals factory by factory. 

As the Foreign Secretary said, it looks like a Tory Brexit will be a “Titanic success”. 

In addition, they still put the rich ahead of the rest of us by making working families pay for the giveaways to a wealthy few. 

For instance, 0.3% of the population are getting a tax cut worth £3,000 a year on average, while cuts to universal credit will leave more than two million families on average of £2,100 a year worse off. 

Austerity was always a political choice, not an economic necessity.

That is why we need an autumn statement that is on the side of working families and with polices that are equipping our economy for the future.

The autumn statement must meet Labour’s three tests.

First, we need a credible fiscal framework, which is crucial not just for the public finances but also to help us to invest in our economy so we can create jobs and growth.

The Government should target a balanced current budget five years ahead and separate capital expenditure from day-to-day spending.

To best do this they should replace the fiscal framework with Labour’s fiscal credibility rule.

We would also set up a national investment bank with a regional banking network.

It would mean we could invest properly in our country and start to address regional inequality.

In contrast, the Government’s commitment to the “northern powerhouse” has always been a media exercise, just like the now-forgotten “big society”. 

The government is only paying lip service to people in the north of England, but it can’t continue to just re-announce old schemes, it needs to deliver on them. 

The fact that only one in five projects in the infrastructure pipeline is in construction shows that the government has not been meeting its own promises. 

The Hull-Selby rail electrification plan has been cancelled in the last few weeks and the Government is failing to commit seriously to develop HS3 for the North of England. 

Labour wants to set up a “Bank of the North” so that we can channel the vital funding and investment that the region needs. 

Second, we need actual support for those in work on low and middle incomes, who will struggle as prices rise. 

The Chancellor can start by introducing a real Living Wage.

He needs to provide honest solutions to the childcare crisis.

Furthermore, he should reverse the giveaways to the wealthy and reverse those cuts, such as universal credit and employment and support allowance, to low and middle earners.

Many people are indeed “just about managing”, but that is directly due to Tory economic policies that have favoured a rich few over the rest of us, and left many in our country behind while a few at the top have soared ahead.

Third, we need secure and properly funded public services.

With the NHS at breaking point, with a £2.5bn deficit, and social care in crisis, with one million people not receiving the care they need, there can be no more fudges on funding.

The same applies to local authority funding, which has been cut at nearly every fiscal event under the Tories. 

Ultimately, the autumn statement needs to be ambitious for Britain by signalling a genuine change by Philip Hammond, not more cuts and half measures.

Austerity should not be delayed, but ended – once and for all.

Otherwise it will just provide further proof why only a Labour Government can ensure no one and no community is left behind.