John McDonnell, the chair of the Socialist Campaign Group of Labour MPs. Photograph: Getty Images.
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John McDonnell: Miliband will have to backtrack on spending cuts

Former Labour leadership challenger says bloc of 30-40 left-wing MPs would force party to end austerity if it won. 

For years Ed Miliband and Ed Balls have stated that Labour will impose "tough" spending cuts if elected. But with the party almost certain to fall short of a majority many have questioned whether this stance could be maintained in the face of left-wing opposition. Would Miliband risk being brought down by his own backbenchers over austerity? 

One who believes that he would be forced to backtrack is John McDonnell, the chair of the Socialist Campaign Group of Labour MPs and former leadership contender. "The first row will be around austerity unless we get this right ... I think it will change, inevitably it will change," he tells me when we meet in Portcullis House. "I think it will be clear from pressure coming back from constituencies and individual MPs that we need a Labour government quickly making a change". McDonnell, who vows to vote against any Budget or Spending Review that includes cuts, anticipates that "a bloc of 30-40 left MPs" will ensure that the leadership won’t be able to "ignore" their demands. Just as the Tory right have pushed David Cameron towards ever more strident stances on Europe and immigration, so the Labour left could exert similar influence on Miliband. 

The Institute for Fiscal Studies recently found that Labour would be able to end spending cuts after 2015-16 and still meet its pledge to eliminate the current deficit. But McDonnell believes the party would need to change course before this point. "You can’t have a situation where you’re planning for a five-year term and have a cuts policy in the first 12 months that people may have forgotten about after the fifth year - that won’t work."

Optimistically, however, McDonnell argues that there has already been "a shift in terms of the Labour leadership’s thinking and even in terms of Ed Balls’s thinking". They recognise that "you’ve got to offer an alternative; you can’t come in with austerity-lite, it won’t work. Coming in with arguments that you’re going to cut services, not necessarily as much as the Tories, but you will still be cutting services, I think that argument is beginning to creak, I think that argument is beginning to fade. Increasingly now, the Labour leadership has recognised that, actually, you can tackle the deficit over a longer period of time, that way you avoid any cuts whatsoever. More importantly, you can tackle it by making our tax system fairer and that means tackling tax evasion and tax avoidance."

Another split between the leadership and the left is Trident. Here, he is less hopeful of progress. "We’re not going to agree on that one ... From the left what we’re saying to the Labour leadership is ‘give people a free vote, just give people a free vote’. It’s ultimately a matter of principle about the morality of using nuclear weapons, which would cause such loss of life and destruction the planet ... If we can get to a free vote there’s the potential, then, of having a more rational debate".

He is encouraged by the number of Labour PPCs who oppose the renewal of Trident and by the growth of left-wing candidates. "It’s quite interesting, really, because the selections up until now have been so tightly controlled by the bureaucracy around the leadership and that that would mean that the left would be in permanent decline as people fell off the branch. It’s quite remarkable; this time round Ed made the promise that the Labour Party bureaucracy would not be allowed to be used by any particular faction and I think it’s largely been upheld.

"If you look at the selections that have gone on, although Progress is well-funded and has been extremely active on the ground in terms of promoting candidates of the right, nevertheless there’s quite a large number of candidates who have come back selected from their local communities and on the left."

But despite his differences with Miliband on austerity and Trident, McDonnell describes the Labour leader as a "breath of fresh air" compared to Tony Blair and Gordon Brown. "The good thing with Ed is that whereas to go and see Gordon Brown or Tony Blair you literally had to prise the door open, or bang it down with a sledgehammer, to get any dialogue whatsoever, with Ed, and I think he does to all sections of the party, not just the left, I think there’s an open door policy," he tells me. "When we’ve had issues that we’ve needed to raise, meetings have been arranged and there’s a proper dialogue."

Having been a permanent rebel during the New Labour years, McDonnell says that "the climate has changed dramatically within the party and within the PLP". "It’s so much more open and democratic, and, to be honest, friendlier, it’s just friendlier ... It’s a lot more comradely than anything I’ve experienced all through my time in parliament". The 63-year-old, who was elected as the MP for Hayes and Harlington in 1997, remarks with satisfaction that the left has "moved the party on to our agenda". "If you think, seven or eight years ago I was getting up in parliament moving alternative budgets to Gordon Brown and Tony Blair’s administration and I was moving things, for example, like building council houses again, investing in manufacturing, looking at the fair distribution of wealth, including taxation issues ... They’re now addressing that whole agenda."

At a recent meeting with Miliband he told him that any government he leads could be "the most radical" since Attlee and "perhaps more radical". After Miliband agreed with him, McDonnell declares that he is "more optimistic now about the role of the left in the Labour Party than at any time in the last 20 years". He praises the leadership’s support for a mansion tax (a "staggering" shift from New Labour), its opposition to NHS privatisation and its pledge to outlaw the blacklisting of trade union members.

McDonnell is more confident about the election than many of his counterparts, predicting that Labour will certainly be the single largest party and confessing to a "sneaking feeling that we could win a small majority - because I think the Tory vote is really soft". He acknowledges, though, that Scotland, where Labour is in danger of being almost wiped out by the SNP, is a formidable obstacle to an overall victory.

"Let me be frank, if Neil Findlay and Katy Clark had been elected I think we would have been in a much stronger position to demonstrate that we had a clear agenda that was attractive to Scottish people," he says in reference to the leadership candidates rejected in favour of Jim Murphy and Kezia Dugdale. "Without them, I think unfortunately we haven’t got the strength and the radicalism that they could have brought to the Scottish Labour Party. Even Jim Murphy, though, has shifted on a number of issue to demonstrate that the party up there needs to be more radical. I think the best hope that we’ve got is to try and make sure that we promote as radical an agenda as we possibly can. I think that’s what Katy [Clark] and others are trying to do on the ground."

Should Labour lose, McDonnell predicts a "fundamental reappraisal" of the party that will likely favour the left. But he rules out running for the leadership again. "I’ve done it enough times and been blocked from getting on the paper. How many times can I be hit by that?" He says that he has "no idea, honestly, no idea" whether a candidate of the left would emerge. But he maintains that the matter is unlikely to arise. "I think we could have a small majority and the left could be extremely influential when we go into government for the first time in a generation."

George Eaton is political editor of the New Statesman.

Photo: Getty
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Cabinet audit: what does the appointment of Liam Fox as International Trade Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for International Trade.

Only Nixon, it is said, could have gone to China. Only a politician with the impeccable Commie-bashing credentials of the 37th President had the political capital necessary to strike a deal with the People’s Republic of China.

Theresa May’s great hope is that only Liam Fox, the newly-installed Secretary of State for International Trade, has the Euro-bashing credentials to break the news to the Brexiteers that a deal between a post-Leave United Kingdom and China might be somewhat harder to negotiate than Vote Leave suggested.

The biggest item on the agenda: striking a deal that allows Britain to stay in the single market. Elsewhere, Fox should use his political capital with the Conservative right to wait longer to sign deals than a Remainer would have to, to avoid the United Kingdom being caught in a series of bad deals. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.