John McDonnell has busied himself today on the airwaves setting out Labour’s five key demands for the budget. His call for an end to austerity would mean pausing the roll-out of Universal Credit, ditching the public sector pay cap, more money into infrastructure, health, education, and local government along with a large-scale house-building programme.
All very well. Only the shadow chancellor’s Today programme interview took a turn for the worse when McDonnell tried to explain how his party would fund this. He appeared to concede this would mean borrowing – along with a mega-crackdown on tax avoidance and changes to corporation tax. But the most telling point in the interview came when he was asked about a comment he made at Labour conference when he said that his party was ‘wargaming’ and this included preparing for a ‘run on the pound’ if Labour were elected. It’s a comment that the Conservatives have latched onto ever since as an effective attack method – with Theresa May citing it as recently as Wednesday during PMQs.
Keen to correct himself, today the shadow chancellor attempted a change of tack. He said that he is now certain that ‘there’s never going to be a run on the pound’ – and, in fact, always was:
‘There’s never going to be a run on the pound. The question was raised with me about the run on the pound and the first thing I said is there will not be a run on the pound. I said we would war game every option that would face us. Before I said that I said there will not be a run on the pound.’
McDonnell’s ‘explanation’ is somewhat curious given that Jeremy Corbyn previously said McDonnell was right to plan in case there was a ‘run on the pound’ when Labour took power. The fact Labour’s top command are now changing their language around it shows that concerns over the economy continues to be their Achilles’ heel.
It’s clear from the snap election that Labour’s policies – and the demands of this ’emergency Budget’ – are popular with the public. The issue that remains unresolved is whether voters believe they can actually deliver it – and if they were to deliver it could they do so without causing long term economic damage. At the end of the interview, McDonnell went so far as to say Labour would mean a ‘strong and stable’ government. We all know how things turned out for the last person to claim that.