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We'll balance the books without punishing the poor, says Labour

By Andrew Woodcock

Published 29/09/2015

Shadow chancellor John McDonnell and Jeremy Corbyn take applause after addressing the Labour Party autumn conference in Brighton yesterday
Shadow chancellor John McDonnell and Jeremy Corbyn take applause after addressing the Labour Party autumn conference in Brighton yesterday

A Labour Government would balance Britain's books "fairly", avoiding the cuts to benefits and services resulting from Conservative austerity, shadow chancellor John McDonnell has said.

In his first major speech in the post, Mr McDonnell set the scene for tax hikes on the rich, saying that when a Labour Government needs to raise money, it will do so by "fairer, more progressive taxation" which does not impose a burden on middle and low-earners.

He promised an "aggressive" drive to force corporations such as Starbucks and Google to pay "their fair share of taxes" and to cut "subsidies" enjoyed by business.

And he said Labour would boost growth through an "active monetary policy" - effectively printing money. But his blueprint won a wary reaction from business, with the CBI warning an active monetary policy could fuel inflation and drive up interest rates, while the British Chambers of Commerce said Labour "must not confuse supporting growth with state control of the economy".

And Vodafone said there was "no truth" in the shadow chancellor's claim it was dodging tax, insisting it has "always paid its taxes" and pointing to a £360m bill in direct UK taxes for 2014/15.

In his address to the Labour annual conference in Brighton, the Left-winger accused Conservatives of making middle-earners and the poor bear the burden of eliminating Britain's deficit while protecting the richest.

He said Labour would "halt Conservative tax cuts to the wealthy paid for by cuts to families' income", end the "brutal" treatment of disabled people subjected to fitness-to-work assessments and deliver a "real living wage", higher than the £7.20 offered by George Osborne.

"Austerity is not an economic necessity - it's a political choice," said Mr McDonnell. "The Conservative Party made a decision six years ago that the very richest would be protected and it wouldn't be those who caused the economic crisis who would pay for it. They represent the 1%."

Insisting that Labour would not be "deficit deniers", Mr McDonnell added: "I tell you straight, from here on in, Labour will always ensure this country lives within its means. We will tackle the deficit. This is the dividing line between Labour and Conservative. Unlike them, we will not tackle the deficit on the backs of middle and low-earners and especially by attacking the poorest in our society.

"We will tackle the deficit fairly. We will force people like Starbucks, Vodafone, Amazon and Google to pay their fair share."

Meanwhile, Jeremy Corbyn has reiterated his opposition to the renewal of Trident nuclear weapons after Labour voted not to debate the issue at the party's conference. The Labour leader said he was "committed as ever" to abolishing Britain's nuclear weapons capability in a message to a Campaign for Nuclear Disarmament rally in Brighton.

Just 7% of Labour delegates at the party conference in Brighton voted for a debate on Trident, meaning it was shelved in favour of discussions on issues such as the NHS, the refugee crisis, mental health and housing.

The CND welcomed Mr Corbyn's comments. General secretary Kate Hudson said: "The renewed commitment of Jeremy Corbyn is very welcome news. It demonstrates again that what is required is a thorough and open debate on Trident. Ahead of next year's Parliamentary decision on Trident, it is essential that the Labour Party has the right policy."

The decision not to debate Trident means Labour's standing support for the renewal of the Clyde-based weapons will remain party policy, but Mr Corbyn and the party's only Scottish MP will continue to voice their own personal opposition.

Shadow Scottish secretary Ian Murray has said he will not vote for renewal even if the party continues to support it when the issue comes to the vote.

Scottish Labour is preparing to have its own debate on Trident at its conference next month.

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