Far more than Jeremy Corbyn, John McDonnell is pursuing a hasty rebranding strategy. Ahead of his first conference speech as shadow chancellor, the man who once called for the IRA to be “honoured”, joked about assassinating Margaret Thatcher and declared of Tory welfare minister Esther McVey, “Why aren’t we lynching the bastard?”, said that his address would be “pretty boring” and “like talking to your bank manager in the old days”. Acknowledging that one of the biggest causes of Labour’s defeat was the lack of economic trust in the party, McDonnell, like Ed Balls before him, is on a mission to reassure.
He vowed to eliminate the deficit through infrastructure investment, curbing tax avoidance and evasion, and reversing some tax cuts such as the reduction in inheritance tax. There was no suggestion, contrary to some of this morning’s headlines, that taxes on middle-income earners would be hiked (“fantasy coming out of Tory HQ” was how he described it to the GMB).
McDonnell insisted that “people’s quantitative easing” (under which the Bank of England would create new money to invest in infrastructure, rather than buy bonds) would not be inflationary as it would “only be used at the right time in the economic cycle”. The rejoinder will be that it offers no stable means of financing investment if it can be turned on or off depending on the performance of the economy. With interest rates so low, many economists argue that Labour should instead pledge to use the government’s borrowing power. But McDonnell, aware that this is hazardous territory for the party, wants to avoid the b-word. He said that he and the country’s top bank manager, Mark Carney, would “have a chat” about people’s QE and announced a review into the Bank of England’s mandate, while vowing not to challenge its independence.
His quest to reassure ran into trouble when he was inevitably asked about his past support for “insurrection” or “direct action”. He defended his stance, pointing to the example of UK Uncut: “Tax Justice Campaign, I’ve been in it for years, we got nowhere. I have meetings in the House of Commons with three people in the room. All of sudden, UK Uncut, a group of young people, come along, occupy a few offices of the companies that are not paying their taxes, the companies start paying their taxes and the government starts earning.” He also maintained that the three-year sentence received by a protester who threw a fire extinguisher from the roof of Millbank tower was “too much for him”. The rights or wrongs of McDonnell’s stance aside, it is hard to imagine any bank manager taking this position. It is this disjuncture that leads many MPs to conclude that he has no hope of succeeding where Balls failed. Others on the left fear that McDonnell’s quest to be “credible” is undermining Corbyn’s promise to be “radical”. Ed Miliband’s doomed mission was to attempt to be both, too often alienating all sides. When he speaks in a few hours’ time, McDonnell’s task is to show that he is not merely repeating this strategy.
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