In recent days I have been asked to share my reasons for taking the decision to abstain on the vote on the Government's Charter for Fiscal Responsibility.
In my view it is better not to engage with George Osborne’s political game-playing than allow him to label Labour MPs as ‘deficit deniers’ – something our Shadow Chancellor John McDonnell was himself anxious to avoid when in September he advocated that Labour actually vote for the Chancellor’s fiscal charter.
I could not support the Conservative fiscal charter because it would insist on an overall (current plus capital) surplus regardless of the impact this could have on our economy and public services. However, I do not believe it would be right either to set our face against achieving a surplus if this could be done in a responsible manner.
Far better, in my view, was for us to set out a series of tests which, if passed, could allow the surplus to proceed. For example, if a surplus would not undermine the viability of our public services, our NHS or national security. Or a test that would ensure the most vulnerable in society were not adversely affected by the operation of an overall surplus. Such a series of tests would ensure that the needs of the public and our public services came before an ideological position.
I am acutely aware that the British people do care about taxpayers’ money and trying to live within our means as a country – and it is important therefore for Labour to be consistent and clear on this question. I disagreed with the view that Labour should somehow support George Osborne’s fiscal rules and while I am glad that now our frontbench has changed its mind on this, I do not think that opposing the principle of ever obtaining a surplus is the right approach either.
I abstained on the vote in the Commons because I believe Labour should table its own, separate, clear set of fiscal rules – setting out the tests and safeguards we should care about as a country before running a surplus. I am disappointed that Ministers did not agree to incorporate these safeguards in their Charter for Fiscal Responsibility.