Bill Carmichael: Labour economic shambles shows deficit of ability

SO, just over a month into Jeremy Corbyn’s leadership of the Labour Party and what is the verdict?

I can’t do better than the words spoken by his IRA-supporting Shadow Chancellor to the House of Commons on Wednesday night: “Embarrassing, embarrassing, embarrassing, embarrassing, embarrassing.”

Yes, John McDonnell used the word no fewer than five times when explaining the Shadow Cabinet’s spectacular U-turn over George Osborne’s Charter for Budget Responsibility, which commits future governments to not spending more than they collect in tax “in normal times”.

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First McDonnell said he was in favour of the Charter, then suddenly this week, without consulting with his party or even apparently informing his own leader, he performed a dazzling backward summersault and ordered baffled and demoralised Labour MPs to vote against.

When Labour MPs were informed of this dramatic shift in a key plank of economic policy the normally mild-mannered MP Ben Bradshaw declared the party had descended into a “total f***ing shambles”.

Who can argue with that?

McDonnell insists that the Charter is meaningless – and in many ways he is right. What does “in normal times” mean? I suspect anything the Government at the time wants it to mean.

He also correctly identified the Charter vote as little more than a giant trap designed to cement the image of Labour as “deficit deniers” in the public mind. But then, having identified the danger, he inexplicably jumped straight into said trap.

How in heaven’s name did this happen? Some within Labour say that McDonnell didn’t bother to read the Charter before pledging his support. Others think he did actually read it but didn’t understand it. I’m not sure which is worse.

Either way this is catastrophic for Labour, which, don’t forget, lost the May election precisely because they were not trusted on the economy. As of this week Labour’s new policy of tax, spend, borrow – and give the magic money tree a hefty shake – is hardly likely to reassure anxious floating voters that Corbyn and Co can be trusted with their hard earned money.

And it is not as if the current fiasco was the first misstep in Corbyn’s reign. We have already seen the chaos over choosing the Shadow Cabinet, the petulant refusal to sing the National Anthem, the silly row over the Privy Council and the deep confusion over defence policy (Labour now says it will spend £100bn on a new nuclear deterrent, but Corbyn has promised our enemies he will never use it).

The problem here isn’t just the far left ideology, but also a matter of basic competence. Corbyn and McDonnell have spent their entire careers carrying placards and shrieking into megaphones. They have never actually run anything in their lives, and they are discovering that you can’t manage a serious political party as if it were a student protest.

Labour MPs who are not fully paid up members of the Corbyn Cult are either in deep despair or open revolt. Twenty-one of them, including many big names, rebelled against the party leadership on Wednesday night.

The grown-ups in the party are seriously asking themselves the question: “How much longer can we go on like this?”

The real tragedy for Labour is that Osborne and the Government should be horribly vulnerable when it comes to the economy.

Despite all the hysteria about austerity and “savage cuts”, total Government spending continues to increase from £673bn when Osborne took control of the books to £759bn this year.

Under the Chancellor’s watch the national debt has almost doubled 
and will reach an eye-watering £1.6 trillion by the end of this Parliament – and far from balancing the books we are adding to this at the rate of some £70bn every year.

While interest rates remain low and economic growth powers ahead, the UK can just about get away with this massive debt burden.

But once interest rates rise (as they inevitably will) and if world economic growth falters (some indicators are pessimistic) then we will be in deep, deep trouble.

These figures represent a wide-open goal for any decent Opposition. If Labour is incapable of simply tapping the ball into the net, then what is the point of it?