At last, a challenge to Svengali Osbornomics

- if you were running a business and realised it was in danger of folding because it did not have sufficiently up-to-date equipment, you could do one of two things: let the business gradually slide into oblivion, or borrow the money to re-equip it and make it viable in the long term

Option 3 is to tighten your belts
Option 4 is to live within your means
Option 5 is to diversify
Option 6 is to take advice
Option 7 is to borrow some equipment or share with a similar company/pool resources

Borrowing and borrowing was not working.

That's why McDonnell is not agreeing to it. I do hope the Labour refuseniks see sense tomorrow.
There were two important votes today and the government won by 40+ votes on both. How can that be if their majority is only 12?

In law, for instance, you would expect a term to be properly defined before you would agree to a contract. Has a specific definition been provided as to what times would be considered to be "normal"?

Even if you on the face of it agreed with it being obligatory for governments to always hold a surplus - and many economists and businesses don't agree - surely it would be dangerous to bring in a law to this effect? It could stifle government investment in modernising and extending vital infrastructure projects.

Exactly, Eloethan. Normal for who?

Anyway, what exactly are "normal" times?

It's easy enough for people to criticise McDonnell and Corbyn, but neither of them really expected to be in this position. They have had a lot of work to do to keep themselves up to speed on this and anything else.
They have had do all this in just a few weeks, whereas anyone else who had been in the opposition on the front bench would know what to expect.
I think they are doing brilliantly in the circumstances, particularly with all the criticism they get from all directions.

Interesting to read the five points the LP is voting against:

1. It commits every government to running a budget surplus in normal times from 2019 onwards. However since 2010, he has missed his own deficit targets and changing the law won't help him to do any better.

2. Effectively it is a big political stunt from George Osborne so that he has an excuse to keep making ideologically-driven cuts.

3. But it's a dangerous stunt because if the Charter is followed to the letter it binds the hands of future governments, making it illegal to borrow money for investment in infrastructure or housing, even at times when investment would lead to faster economic growth.

4. In fact, the best way to reduce the deficit now is to invest to grow our economy. It’s for this reason that most economists disagreed with George Osborne’s cuts.

5. It could also force a government to keep making cuts, irrespective of the impact they have on public services and working families.

www.taxpayersalliance.com/osborne_s_charter_is_a_meaningless_political_gimmick_say_taxpayers_alliance

The taxpayers alliance are usually on Osborne's side. On this they were not.
Doubtless they will attack McDonnell for changing his mind, which he did after he'd been to Teesside to see the steelworkers; however, they cannot attack him for being wrong.

Without commenting whether or not I agree, I had heard that it is not 'The Labour Party', more JBC and JMcD

I hear that there are rumblings of dissent amongst other Labour Parliamentarians.

Every year the government changes its laws on tax. It wasn't going to put up VAT, and it did.
There is no reason whatsoever for Labour to go along with Osborne. If those who are going to rebel let the plan through, I would not be surprised if Labour lost a lot of its new voters/members.

A good comparison Luckygirl. No business would run itself in the way that the Camborne Government suggests. First their workers would be laid off and then their business would go under - but no doubt they would have syphoned enough off to keep them going.

voxpoliticalonline.com/2015/10/13/labour-fiscal-charter-rebels-are-ignoring-the-evidence/

www.independent.co.uk/news/uk/politics/living-wage-not-being-paid-workers-proportion-falls-a6690451.html

I agree with you, Lucky. Why is it always thought that the rich need to be paid more, but the poor can live on less than they need to live decently?
1 in 4 British workers aare paid less than the living wage now. This is before the round of cuts coming next year, and before the next budget cuts pay even more.
Why would Labour back the Tories in this? I nearly gave up on them again when McDonnell said that. Thank heavens he's realised and is being sensible again.

When...yes, quite.

As far as u-turns are concerned, Osborne was the first to do so on fiscal responsibility. In 2010 he described attempts by the previous government to run budget surpluses as vacuous and irrelevant. So his Charter for Budget Responsibility is a big u-turn from that.
According to Full Fact, it's meaningless, because no government can tie down the next government like that. Governments make laws. That's what they are for.

fullfact.org/factcheck/law/paying_off_debt_one_law_time-46629/

Whatever Labour do and say tomorrow, they will be able to change the laws when they come to power.

Government borrowing is already at a record high. If only the solution were that simple.

Here's a thought....

- if you were running a business and realised it was in danger of folding because it did not have sufficiently up-to-date equipment, you could do one of two things: let the business gradually slide into oblivion, or borrow the money to re-equip it and make it viable in the long term.

This is how I see our economy:
We are in danger of "folding" - i.e. more people becoming poorer and our infrastructure and services mouldering away.

We can either:
- let this slide into more poverty continue by clobbering the poor; and let our services go into decline by taking away their funding.
- borrow what we need to keep standards of living up, finance our services and build up our infrastructure (thus creating jobs) and use these improvements to bolster our economy for the long term.

Just a thought.

Quite interesting to see the lunch-time interviews - by no means all anti from the LP. With much reporting of raised voices - which just tells me there is blood in the veins of the MPs - many seem to agree with the vote against.

Well, I would like to see JMs argument before I pass judgement.

Now there's a good idea Whitewave.

You are so right about Keynes. It is about running a government in a way that seems so sensible to most people when running a home, a business or a government. If run well - and there are problems with what a Labour government would be left with - you would have saved in the good times in order to carry out the right investment in the bad.

Hmm. Pity McD wasn't available to comment himself. Poor Diane!

She did say when he was going to Jbf. I think one of the things the media are learning is that the LP will not allow them to dictate the pace at which they are choosing to do things. Don't you find it irritating when they ask questions (of all parties) that they know they are not going to answer at that point and their silly show (the interviewers) of anger just makes me cross with the interviewer.

Not that this seemed to happen in this interview as Dianne seemed very in command of her brief and was not spouting those horrible "sound bite" that all parties have been guilty of up to now.

Well, I would like to see JMs argument before I pass judgement.

What I will say in passing though is that Keynsian economics argues that in times of economic growth and prosperity, a government should try to ensure a balance surplus.

Oh dear, what a shambles,is what I heard on the radio this morning, regarding the U turn by Labour, and what happened at the meeting. We will have to see how things go, but it doesn't look good for Corbyn, whatever his devotees say.

It was the "Svengali" combined with the "Osbornomics" that was slightly indecipherable.

Hmm. Pity McD wasn't available to comment himself. Poor Diane!

I did hear Dianne Abbott this morning. My sense was that, although it was one of those difficult "holding" interviews, which all parties have to do at times as the media want to run the "story" at there pace, she was more comfortable than I had heard her for a long time.