Jeremy Corbyn faces major test to force Labour MPs to back economic U-turn

The Labour leader has imposed a three-line whip on his party to oppose George Osborne’s plans to balance the books

John McDonnell’s policy U-turn reflected the divisions within his party (Rex Features)

Jeremy Corbyn faces a major test of his authority on Wednesday as he attempts to force fractious Labour MPs to line up behind a key economic policy.

He has imposed a three-line whip on his parliamentary party to oppose Chancellor George Osborne’s plans for the government to balance the books and then run a budget surplus.

Many Labour MPs are in uproar over the change of heart by the shadow Chancellor John McDonnell, who announced two weeks ago that the party would back Mr Osborne’s proposals for a fiscal charter.

On Monday he informed MPs by email that he had changed position and wanted them to vote against the charter.

Mr McDonnell will tell the Commons that he had altered his stance because of the global economy and fears the charter would mean more cuts to public spending.

Writing online for Independent Voices, he said: “We have changed our position with regard to the vote, or the Parliamentary tactics around what is clearly a political stunt, but we have not changed in our clear and consistent principles.”

Several prominent Labour backbenchers are expected to abstain tonight, effectively challenging the new leadership to discipline them.

Harriet Harman, the former acting leader, added to the pressure on the leadership, ing: “It’s not surprising, bearing in mind that this is the most important issue in terms of public confidence and trust in the Labour Party that there was some anxiety and concern about changing our position.”

We have changed our position with regard to the vote, or the Parliamentary tactics around what is clearly a political stunt, but we have not changed in our clear and consistent principles

&#13; <p>John McDonnell</p>&#13;

Asked twice whether she saw Jeremy Corbyn as a future Prime Minister, she dodged giving a direct answer.

She said: “He is putting himself forward as the leader of the party to be the next Prime Minister, but… at the end of the day, the voters are always right.”

A meeting of the Parliamentary Labour Party (PLP) on Monday degenerated into acrimonious exchanges over Mr McDonnell’s about-turn and afterwards MPs protested that Mr Corbyn had taken a back seat during the election. One backbencher described him as a “spare prick at a wedding” during the meeting.

The veteran Labour MP David Winnick rebuked Mr Corbyn at the PLP for failing to develop any strategy to win the election. He warned that the party needed to capture 94 seats to secure an overall majority but appeared to be on course to lose seats rather than gain them.

Recriminations over the volte face by Mr McDonnell intensified yesterday. His predecessor, Chris Leslie, warned: “To go from one extreme to the other is wrong in economic terms but also it sends the wrong message to the public.”

The Bassetlaw MP John Mann said the U-turn was a sign that Mr McDonnell was “very inexperienced” and had “had his fingers badly burnt”.

The Ilford South MP Mike Gapes complained bitterly about the lack of leadership being shown by Mr Corbyn.

He said: “I’m not going to be lectured by someone who has voted more than 500 times against the Labour whip.”

Ilford South MP Mike Gapes: 'I’m not going to be lectured by someone who has voted more than 500 times against the Labour whip' (Varinder Singh) (Varinder Singh/Creative Commons)

One MP said: “There was real derision. While McDonnell was speaking, people were rolling their eyes and shaking their heads.”

There was surprise that, at the end of the meeting, Jeremy Corbyn did not try to smooth over the differences. It was left to Richard Burgon, the newly elected MP for Leeds East, to put up the most vigorous defence of the leadership, pointing at one of Corbyn’s critics and saying: “You’re a disgrace.”

Q&A: Labour's fiscal U-turn

Q | What is the Labour Party arguing about?

A | Chancellor George Osborne is expected to put before Parliament his Charter for Budget Responsibility, which commits the Government by law to balancing the country’s books within three years. At the end of the debate, there will be a vote. The Labour Party is divided about whether to vote for or against the measure, or abstain.

Q | What is John McDonnell’s position?

A | The shadow Chancellor told his party’s conference that Labour would vote for the charter, so disproving the claim that Labour MPs are “deficit deniers”. On Monday, however, he emailed MPs to tell them to vote against it.

Q | Why did Mr McDonnell change his mind?

A | He says global economic circumstances have changed since the conference two weeks ago, but that notion was not accepted by Labour MPs on Monday. It is thought he was influenced by Scottish Labour leader Kezia Dugdale, who fears the party will suffer north of the border if Labour votes for the charter and the SNP votes against. More damagingly, it is rumoured that McDonnell had not read the charter properly and thought it could be amended.

Andy McSmith