Labour’s £59bn elephant in the room

John McDonnell’s response to the Autumn Statement on this morning’s Today programme offered a fascinating insight into a growing political problem that seems to be passing unnoticed.  McDonnell, as ever, talked about fair taxation – dealing with tax avoidance, stopping tax giveaways to business and wealthy individuals, while struggling to defend Labour’s acceptance of proposed increases in the higher-rate tax threshold.

But there was a a £59bn fiscal headache that never got a mention – the effects of Brexit on the public finances, according to estimates from the OBR.  And that is based on growth forecasts that look distinctly optimistic – 2.2% in 2017.  And there are some ominous straws in the wind; yesterday’s prediction by a former CEO of Sainsburys that food prices could rise up to 8% next year, with a huge impact on those “just about managing”, looks all too credible to anyone who has visited a supermarket recently.  It’s obvious that both the cumulative effect of Brexit and, in particular, the effects on the poorest families  – who spend a much higher proportion of their income on food than the better off, and are already bearing the brunt of benefit cut and soaring housing costs, will be devastating.  (Incidentally, one of the more interesting aspects of the OBR calculation is that some of the Brexit fiscal black hole is a direct result of falling immigration).

So why is Labour failing to speak up for vulnerable people hit so hard by Brexit?  The answer seems to lie in statements recently from both Corbyn and McDonnell that, if Parliament gets to vote on Article 50, they won’t oppose or delay the decision; the pass has been sold.  It seems clear that, in defiance of Party policy as agreed at Conference, Labour’s leaders will continue in the line that they have followed all along – half-hearted at best opposition to leaving, with a calculated failure to challenge the terms on which Brexit will take place.

Labour should know that it’s not good enough just to accept the result of a plebiscite.  It’s duty is to challenge, to act in the best interests of those it speaks for by asking the right questions and by using its Parliamentary clout to hold the Government – in obvious disarray as it realises that it just can’t deliver what Leavers promised – to account, and to understand that democracy is a process of which voting is one part.  In this case, part of that process is speaking out as the consequences of a plebiscite vote become clear, especially when we now know how dishonest the leave campaign was.

There is a £59bn elephant in Labour’s room at the moment, and it’s deeply damaging to Labour’s fiscal credibility. It’s there because the Leadership is defying Conference policy and continuing to refuse to step up to the plate on Brexit; and therefore walking away from the interests of those it was set up to represent. Labour has to do far, far better than this.



One thought on “Labour’s £59bn elephant in the room

  1. Corbyn and McDonnell are perfectly happy to leave the EU. They went through the motions during the referendum and everything they have said and done since confirms that position.
    Put bluntly they have betrayed the party and its supporters. Worse, they have abandoned their responsibility to be an effective parliamentary opposition. This is unforgiveable. It’s one thing to accept the result; quite another to meekly accept a damaging brexit without mounting a serious and sustained challenge.
    Our position is shameful and will, I am sure, be hugely damaging.

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