A Labour government would rip-up the basis for fiscal rules, to exclude borrowing for investment from targets “so it’s recognised as both a cost and as a benefit”.
Speaking from Liverpool Riverside, a seat held by former Labour MP Louise Ellman who quit last month over anti-Semitism concerns, John McDonnell told supporters a Labour government would shift the centre of power from London to the North.
Following a speech by his counterpart Sajid Javid, who confirmed a Conservative government would introduce new fiscal rules this morning, McDonnell also gave his own update on the subject.
His shake-up would ensure that the public assets created by the party’s flagship National Transformation Fund investment were “recognised both as a cost and as a benefit”
He attacked the Tories for creating “fiscal rules to minimise the costs on one side of your balance sheet, ignoring the benefits on the other. Labour won’t make that mistake”.
McDonnell said: “Our fiscal rule for the next Parliament will exclude borrowing for investment from our borrowing targets. It will mandate us to deliver an improvement in the overall balance sheet by the end of the Parliament. So that when we invest in the infrastructure our country desperately needs, it’s recognised both as a cost and as a benefit.
“Yes – adding to the government’s debt but also adding to the government’s assets and strengthening our public sector to deal with the future. With the rents on our new council homes and the electricity produced by our public sector energy agencies set against the cost of servicing the debt issued to build them. And a ceiling on that debt servicing cost – in normal times – of 10 per cent of tax revenue.”
McDonnell said there was “nothing radical” about this – “just common sense”.
“What families and businesses do every day when weighing up an investment After the corruption and lies of the Tories we need government – and those who want to be in government – to be transparent as possible.”
At the event – where yet again Labour activists were asked to be “respectful” of journalists “even if we don’t like the questions they ask” – McDonnell rubbished the Unite to Remain pact announced by smaller parties, saying the election would return a Corbyn government.
And he argued that Labour was “doing everything that has been asked of us” regarding anti-Semitism.
“One anti-Semite is too many, that is why we have done everything in our power.”
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