Latest Update from the Waugh Zone Titled LITTLE JOHN, BIG IDEAS

* Paul Waugh

by Pau WAUGH | Politics

Monday of Labour conference is traditionally the day of the big set-piece speech by the Shadow Chancellor (and Chancellor, for those who can remember that far back). But John McDonnell is proving that he’s not going copy the way Ed Balls and Gordon Brown have filled this slot ever since 1994.

Just as Little John was Robin Hood’s right hand man, McDonnell is Jeremy Corbyn’s most trusted ally, and wields similar muscle in the new, old Labour party. So it’s perhaps apt that the Shadow Chancellor is set to announce that a Robin Hood Tax will be included in a review of economic policy. The idea is totemic of the new era under Corbyn – very popular with the grass roots, while making many senior figures nervous as business rolls its eyes. 

In another break with tradition, McDonnell bust the midnight embargo on bits of his own speech at a Unite fringe last night, declaring “either we introduce a financial transaction tax unilaterally in this country, or Europe or globally”. He stressed that Angela Eagle had agreed on a review, though she has big doubts about unilateral fiscal rearmament (the Times quotes a senior party source today describing a non-global Robin Hood tax as ‘idiotic’). Clarifying his remarks on Today, he said he wanted a global tax not a unilateral UK-only one.

More widely, McDonnell wants to shift taxation away from low and middle earners and onto big corporates but also wealthy households. Just how he plans to do the latter remains to be seen, but aides were stressing last night that ‘redistribution’ is key. Yes, that EdM ‘predistribution’ complexity is out, down-the-line redistribution is back.

McDonnell also told the fringe last night that his speech would be ‘stupefyingly dull’ (he told BBC News this morning it would be ‘pretty boring’), in that he will talk about living ‘within our means’. But there’s trouble ahead on this, as some Corbynistas are already sniffing betrayal with the Shadow Chancellor’s talk of signing up to Osborne’s fiscal charter. 

This morning, Ann Pettifor, one of his new economic gurus, told Today’s Business section (it was a lovely dawn here in Brighton as she did her interview) that she was ‘unhappy’ with the shift to living ‘within our means’. “No Chancellor” can do that, she said, without the economy growing, pointing out even Osborne had to ditch Brown’s fiscal rules to avoid further recession. Pettifor said she was pleased McDonnell was shifting from ‘the fetish of the deficit’. 

The man himself told Today that he wanted to test how much of the £120bn ‘tax gap’ could be recovered. He also refused to back down on ‘People’s QE’, saying he and Mark Carney were ‘going to have a chat’. A review of the Bank of England’s mandate is also now Labour policy, he said.

* Paul Waugh is the Executive Editor, Politics, HuffPost UK.