Labour: ‘We are not deficit deniers’

On the eve of the conference in Brighton, Mr McDonnell said Labour will support George Osborne’s fiscal charter and insists Labour will cut the deficit.

The chancellor‘s proposed charter commits governments to keep debt falling as a share of GDP every year and achieve a budget surplus by 2019-20.

Future governments will be required to ensure there is a surplus in “normal times” – which does not include years of recession.

Speaking to The Guardian, Mr McDonnell said: “We will support the charter. We will support the charter on the basis we are going to want to balance the book, we do want to live within our means and we will tackle the deficit.”

We accept we are going to have to live within our means and we always will do – full stop. John McDonnell

He added: “We accept we are going to have to live within our means and we always will do – full stop. We are not deficit deniers.”

“We will tackle the deficit but the dividing line between us and the Tories is how we tackle it.

“Our basic line is we are not allowing either middle or low-earners or those on benefit to have to pay for the crisis. It is as simple as that.”

The Conservatives have attacked Labour’s economic credibility after Jeremy Corbyn was elected leader two weeks ago. His choice of Mr McDonnell – a leftwing backbencher and opponent of austerity – as shadow chancellor led to criticism from senior figures within the party.

Mr McDonnell told the BBC Labour had to “respect dissent” over policy among its members amid talk of a move to a more democratic decision-making process.

He said: “There’ll be proper debate, much more time given to delegates from the constituency Labour parties or from the trade unions, to actually have a voice, less time of shadow cabinet members and others in the past who’ve talked down to members.

“What we’re trying to do is get the policy-making process as inclusive as possible … some people will dissent from individual policies. We’ve got to respect people’s views. We’ve got to respect dissent in the party.”

A Conservative spokesman said: “Nothing’s changed. Labour are still saying they would run an overall budget deficit – that means they would carry on borrowing forever, risking higher mortgage rates.

“By burdening our children with more debt than they could ever hope to repay, Labour are a threat to the future security of our economy and your family.”