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John McDonnell is committed to borrowing - from Ed Balls and Ed Miliband

The shadow chancellor's fiscal stance is most notable for its familiarity. 

It’s as if Ed Balls never went away. John McDonnell regularly denounced his predecessor as “austerity-lite” but his new “fiscal credibility rule” is strikingly familiar. In his speech at the RSA this morning, the shadow chancellor pledged that Labour would run a current budget surplus if elected, reduce debt as a share of GDP and only borrow to invest - a near-identical stance to that adopted by Balls in 2015 (and close that of Gordon Brown in office). “If you’re putting the rent on the credit card month after month, things need to change,” McDonnell said, adopting George Osborne’s analogy of choice. Elsewhere, he echoed Liz Kendall’s words during the Labour leadership contest, declaring that “There is nothing left-wing about ever-increasing government debts, or borrowing to cover day-to-day expenses.” What, many are asking, was the fighting all about?

McDonnell would point out, as he did at the end of his speech, that his rule comes with caveats. The most notable is that when monetary policy is “constrained” (“by hitting a lower bound as it did after the global financial crisis”), the promise of a current surplus is suspended. At such times, McDonnell said, expansionary fiscal policy would be needed “to get the economy moving again”. But with interest rates still at a record low of 0.5 per cent (and unlikely to increase significantly), it was unclear when, if ever, the rule would be operational. But since McDonnell, unusually, left without taking questions, journalists didn’t get the chance to ask him.

Similarly unclear was whether the shadow chancellor was prepared to countenance spending cuts, rather than merely tax rises, to ensure a current surplus. “I am making no announcements today about our spending commitments,” McDonnell said.

Much of the rest of the speech on boosting productivity, raising skills and increasing exports was also familiar. McDonnell even went so far as to praise Peter Mandelson, the bête noire of the Labour left, for his “prompt action” as business secretary in the aftermath of the financial crisis. With some exceptions (a new “Right to Own” for employees), many of the policies were first floated in the Miliband era (a National Investment Bank, reduced tax avoidance, increased housebuilding).

If there is a defining difference it is rhetorical. Though their rules allowed borrowing for investment, Miliband and Balls were always fearful of saying so. Labour’s profligate reputation led them to act by stealth. McDonnell has no such shame, proudly declaring his intention to invest and harnessing the support of “the Financial Times, the Economist, every single economist who appeared in front of the Treasury Select Committee”. Yet while Labour’s commitment to spend is clearer than ever, it is its willingness to save that voters need to be convinced of. McDonnell embraced that cause today but the tough questions have been deferred. 

Update: One Labour MP told me in response: "John McDonnell's speech is tonally a tribute to Ed Balls. John is either now the ultimate 'Red Tory' or he, Jeremy and their followers lied and should apologise for accusing the mainstream of the party for being so, because this speech is an admission that the rest of us were and are not Osborne austerians." 

George Eaton is political editor of the New Statesman.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.