This is the full text of a speech given today by shadow chancellor John McDonnell.
Thank you very much for coming here today.
It’s great to be in Dragon Hall, where there’s a real life example of how changing technology can provide huge new opportunities to young people especially.
I think it’s important today that we remember the reasons for hope, and look to the future.
That is why I came into politics – because I could see how we could live in a society much fairer and better than the one we live in.
But as I watched Donald Trump win the American election on Wednesday I, like many of you, felt real concern.
His was a victory won with the rhetoric of division.
Coming on the back of Brexit it is a wakeup call not just for the parties of the left, but for everybody who believes in science over superstition; merit over inherited wealth; paying your taxes instead of dodging your taxes.
Like Brexit it was a vote driven, in part, by discontent with what the economy delivers. Dead town centres; job deserts; stagnant wages – and the constant feeling that the basic things we rely on – our jobs, our savings, our homes – are not safe.
So today I want to tell you what Labour is going to do, as the Tory Government struggles to get a grip of the chaos it’s injected into the Brexit process.
We need a government able to take five steps.
First, place the public finances on secure foundations for the future.
Second, end the cruelty of the spending cuts programme.
Third, invest in the long-term to create secure, well-paid jobs.
Fourth, reform our tax system so the richest pay and the rest don’t shoulder the burden.
And fifth, lay out a clear plan and a vision for our country after Brexit.
New Chancellor Philip Hammond is presenting his first Autumn Statement next week.
Philip Hammond has promised it will be a “reset” of economic policy,
That’s welcome news, if it’s true. The old policy was wrong and didn’t work.
If only somebody had told them. Well, we did.
We said austerity will suppress growth; wages won’t recover; the country’s infrastructure will fall apart.
They said – don’t worry, most of the cuts will fall on welfare.
The film I, Daniel Blake brought home with exceptional force some of the cruelty of what that means.
But it’s not just those on the sharp end.
We have all been failed by the Conservatives’ economic programme.
Six wasted years of spending cuts instead of investment. For ordinary people, six years of low pay and high rents; six years of zero hour contracts and job insecurity.
They’ve given up on the national interest because they have failed, and failed badly.
Philip Hammond will have to admit that the Conservatives have failed in every task they set themselves.
They failed to bring the deficit under control. It was supposed to have been eliminated by 2015.
They failed to bring down the government’s debt. It’s now 1.7 trillion.
They failed to restore wages, they failed on productivity, they failed on investment.
They failed because at every step of the way there was a Conservative Chancellor who put rhetoric ahead of the hard economic facts.
He chose austerity, when he could have chosen investment.
Worse yet, he chose spending cuts at the same time as cutting taxes for large corporations and the wealthy.
Austerity was a political choice, not an economic necessity.
And now, because that choice has failed all of us, the economic facts are brutal.
This is an economy sliding down the league table.
It is an economy with the largest foreign debt of any major developed country.
It is an economy where investment remains £50 billon below the levels reached before the crisis.
It is an economy where productivity increases, the fuel of growth, have ground to a halt even as other large economies race ahead.
And worst of all, it is an economy where after all the sacrifices of spending cuts and stagnant wages and zero hour contracts – the government debt burden continues to rise and the government deficit remains stubbornly high.
There is no other way to say it. Those sacrifices were made in vain.
They were made at the altar of the political conceit that said for as long as you could pose for the cameras in a high-vis jacket, it didn’t matter that actual manufacturing employment was still falling.
The million queuing at the foodbank didn’t matter.
The lost decade for wages didn’t matter.
That cuts to vital investment didn’t matter.
The Tories want you to forget George Osborne but I want to you to remember what he did in detail.
Because he not only failed on every target he set himself – he plunged Britain’s hard pressed communities into such a state of neglect that they reached for the option of a break with Europe.
This year his Budget fell apart, leaving Labour to pick up the pieces.
We forced through reverses to the cuts in disability benefits.
And we will continue to oppose unnecessary spending cuts that have created so much hardship for so many.
Next week we will see a Tory Chancellor admit that he has not met any of the targets in the 2010 Conservative Party manifesto.
There’s been a change of rhetoric but the priorities remain the same.
The tax giveaways to the wealthy remain.
Just as the cuts to the poor and the vulnerable remain.
The Tories failure on the economy precedes the referendum, and they will try their best to convince us otherwise, but no one will believe them. Even their own leaked Treasury documents admit it.
So we will set out tests for next week’s Autumn Statement.
Those tests are based on what we need as a country.
A need a credible fiscal framework that supports Brexit.
We need actual support for those in work on low and middle incomes.
And we need secure and properly funded public services.
We want to see an end to austerity, with the NHS and social care properly funded and ESA and Universal Credit cuts reversed.
We want to see an end to tax giveaways for the wealthy.
And we need a serious commitment from government to invest across the whole of our country.
Labour’s Fiscal Credibility Rule remains intact while the Tories’ fiscal charter lies in tatters.
It further highlights we are the only party with an expert-designed fiscal framework that can strengthen our economy and protect the public finances.
It will be part of how we judge the fiscal rules that the Chancellor announces next week.
They need to be robust and flexible enough to deal with any potential downturn from Brexit, and they must not be political tricks to catch cheap headlines.
I hope he leaves the gimmicks on the shelf alongside George Osborne.
Let’s talk about the first step in turning our economy round.
I want to be absolutely clear about this, as I have been before.
Those on the left have a duty to be scrupulously honest about the economic tasks in front of us.
There are no easy options.
There is no proverbial magic money tree.
We can only deliver the high-quality public services that our communities want and need when we have a high-quality economy that can pay for them.
That means an absolute and unbreakable commitment to fiscal discipline on the part of any future Labour government.
There is nothing “left-wing” about running an excessive deficit.
There is nothing “progressive” about running up excessive debts.
A government has an absolute responsibility to manage the money it is entrusted with by the people it serves.
That means being transparent about how we intend to manage it.
So for Labour that means not thinking about how to spend money until we have shown how to earn it.
That is the absolute commitment built into Labour’s Fiscal Credibility Rule which I announced in March.
We drew this up with world-leading economists because we wanted to bolt into place the rock-solid foundations needed for a government that is determined to transform this economy for the better.
It says that a Labour government will only spend what it earns, but that we will invest for the future.
We’ll bring the deficit down in a way that does not compromise our public services, or jeopardise our shared prosperity.
Every single spending commitment we make, to repair our NHS or to deliver an education system that will meet the aspirations of this country, will fit inside this Fiscal Credibility Rule.
If a commitment does not fit inside the Rule, it will not be made.
To oversee the operation of our Fiscal Credibility Rule, we will make sure the Office for Budget Responsibility reports to Parliament, rather than to the Treasury.
We’ll make sure fiscal and monetary policy work together, with clear rules for when monetary policy does not function.
Every penny we spend will be earned, and every penny accounted for.
This is what a responsible government would do.
To take responsibility, Philip Hammond now needs to get a grip.
Philip Hammond now must come clean to the British people.
He, like his Cabinet colleagues, supported George Osborne’s calamitous economic choices.
Worse, as Shadow Chief Secretary to the Treasury, he helped draw them up.
He cannot duck his responsibilities, but he can at least attempt to undo the damage.
That means no more targets that cannot be met.
He needs, instead, to set out how he will place the government’s own finances on the stable foundation that was so lacking from his predecessor.
Abandoning George Osborne’s fiscal framework was the right decision, since the framework had failed so abysmally.
But in typical fashion, the Conservative leadership have tried to put the blame for their shift on Brexit.
They’ll blame anyone and anything instead of accepting their responsibilities.
We know Brexit will create challenges, but those challenges are harder to meet because after six wasted years under a Conservative Chancellor we have an economy that has been chronically weakened.
The Tory leadership need to stop looking for someone else to blame, and start taking responsibility.
The Autumn Statement this year must set out a new fiscal framework.
It has to be based on sound economics.
So like Labour’s Fiscal Credibility Rule, it should make clear the distinction between day-to-day spending, and investment.
And like Labour’s Fiscal Credibility Rule, it should build in enough flexibility to allow a government to bring day-to-day spending in balance without damaging the economy.
Yet on current evidence they appear content to settle for the steady management of decline.
The government has been content to drift through the first months after the referendum.
They have placed a great burden on the Bank of England to see us through their own failure to plan.
I want to pay tribute here to the Governor and to those at the Bank.
When the Chancellor was nowhere to be seen, the Prime Minister resigned, and assorted Tory Brexiteers simply walked away from the mess they helped create.
It was the actions of the Governor and the Bank of England that were there to offer the necessary support to our economy.
And yet their reward has been noises off from the Tory Party elite about the alleged failings of the Bank.
Yet the simple truth is that if monetary policy has been exceptionally loose this last six years, it is only to compensate for the exceptionally tight fiscal policy.
As the consensus amongst economists now says, imposing austerity on an economy battered by the financial crisis of 2008 was self-destructive.
It was fortunate that the Bank of England responded appropriately to ensure the economy did not simply drop into extended depression.
The Bank’s actions were not cost free. I share those concerns about the consequences for inequality that follow from the version of Quantitative Easing that has been applied.
But it was the Bank that had to deal with the calamitous economic decisions by the Conservatives running the Treasury.
Without the foolish and destructive dash after fiscal targets that could never be met, the Bank would not have had to rely on monetary policy to the extent that it did.
You think the Conservatives would be more grateful.
Instead we have heard idle chatter from some quarters about removing the Bank’s independence.
At a time of economic uncertainty, not just here but across the world, we would trifle with the Bank’s independence at our peril.
It is a hard-won economic asset for this country.
So I want to repeat a point I have made already: under Labour, the Bank of England’s operational independence will be sacrosanct.
It is up to the government of the day to give the Bank its mandate.
But it is up to the Bank, and the Bank alone, to achieve it.
We will not allow a return to the days when Conservative Chancellors would deliberately slash interest rates just ahead of an election to create a boom, only to drive them back up again once the election was over.
The public servants who run the bank are drawn from the very top of the global talent pool. We will not allow a cabinet drawn from the dregs of a Tory government to place the blame for their failures on the bank.
On the second step, we have to now make different, and better, choices than to impose spending cuts on the scale the Conservatives attempted.
The economy is growing.
We can use the proceeds of that growth more fairly.
If we allow the economy to grow, there is no need to make cuts to the in-work benefits that millions rely on.
A majority of those in poverty are also in work, and depend on the lifeline of in-work benefits to compensate for poverty pay.
The government can’t claim to be for working people, and be cutting the earnings of those who work.
The planned cuts to Universal Credit must be reversed, and reversed in full.
And there is no need for us to make spending cuts to the lifeline of some of the most vulnerable.
Those who can’t work through no fault of their own, whether through illness or disability, should not be targeted for punitive measures.
This seems, to me, to be fundamental to decent and humane society.
Let’s remember what austerity has meant in human terms.
Nearly 90 people a month are dying after being found fit for work by work capability assessments.
This is a direct consequence of the decision, taken by a Conservative Chancellor, to impose the biggest and most destructive spending cuts seen in this country since the 1930s.
The scale of what is happening is almost beyond belief.
It should shame all of us when a United Nations report published last week finds that our own government has “systematically or gravely violated the rights of disabled people.”
We are better as a society than that.
And we should demand better from our government.
Every planned cut to Employment Support Allowance must be reversed, just as George Osborne reversed his planned cuts to the Personal Independence Payment.
But wherever the cuts have landed, they have caused hardship.
Our local councils are now so hard-pressed that they are in danger of failing their statutory duties.
That is what six years of devastating cuts have done.
And it’s been the poorer authorities that have borne the brunt of it.
Spending cuts for the poorest local councils are five times bigger than those for the richest.
Local councils have stretched every last penny as far as they can go for six years.
But now they’re at breaking point.
Local authority leaders say they simply cannot bear another year of spending cuts.
Social care provision is in crisis.
Across the country, care providers are facing bankruptcy.
Due to local authority cuts, some care workers have had to slash their visits to elderly and disabled people from 30 minutes to 15 minutes.
That’s 15 minutes to make somebody dinner, give them a bath, help them take their medication, change their bedsheets and any other help that they might need.
In some places, councils have had to consider reducing visits to as little as ten minutes.
Over a million people in need of care are receiving no formal help.
The NHS is being left to pick up the pieces.
The hidden costs of cuts to social care appear as the intolerable strain now being placed on our National Health Service.
Three major health foundations have called on the government to make good the deficit in social care.
As we reach the winter period, bed blocking has reached a new high for the sixth successive month. Older people being left stranded in hospital wards by Tory cuts to social care.
The government must provide the £2.5billion needed to stabilise the system.
We are on course for food bank usage to reach the highest it’s been for its 12 year history this year.
In the run up to Christmas, almost 200,000 children will be relying on a food parcel to get a decent meal.
Food banks increasing, the NHS at breaking point and a housing crisis threatening to spiral out of control.
Under the Tories, rough sleeping has doubled.
The equivalent to approximately 100 households a day are evicted from rented homes, 40,000 in the year to date.
And 1.2 million people remain stuck on council housing waiting lists.
A Government that cannot feed or house its population and cannot ensure our children do not live in poverty is a Government that does not deserve to exist.
If we place the government’s finances on a firm footing, we can build the world-class public services people want.
That means taking a serious approach to tax reform, the third step in turning our economy round.
Labour will reform HMRC, ending staffing cuts and making sure it targets the tax dodgers who are failing to pay their fair share.
Our Tax Transparency and Enforcement Programme will permanently close the loopholes and the scams the tax dodgers use to duck the taxes the rest of us have to pay.
It’ll insist on transparency from the tax havens, to stop the super-rich hiding their wealth and ducking their taxes.
And as we lay out our programme of tax reform, we’ll show how the burden of taxation can be shifted away from working people whose real-terms pay has fallen and towards those with the broadest shoulders.
We know the world is changing.
Advances in technology are reshaping our economy.
They are changing how, and where we work.
Manufacturing jobs are returning to the UK, looking for highly skilled labour and access to major markets.
Digitisation is bringing the design and productions sides of manufacturing closer together.
Smaller, faster companies are being established to take advantage of these opportunities.
They mean the old rules are being rewritten in front of us.
For decades, the belief held that the global free market alone would deliver rising prosperity.
Since the financial crisis of 2008, that rule has been torn up.
Successful economies today are those with governments prepared to intervene for the common good.
They provide vital support for new industries, and sustained investment for the established.
Good business doesn’t need no government. Good business needs good government.
Good governments don’t, in a panic about job losses, make secret deals with big employers.
They make serious, long-term commitments alongside business to deliver jobs and growth across the whole economy in just the way my colleague the Shadow Business Secretary is now laying out.
This is our fourth step, delivering an industrial strategy and investment.
With our shared values at its heart, we can deliver an industrial strategy that will focus on meeting the real needs of society, and rebuild and transform our economy.
That means bringing together and working with all sides in our society – the businesses, the customers, and the workers – to develop a clear vision and plan for the future.
Labour will offer a New Deal with Business.
We’ll offer businesses the education and training their workers need, and the infrastructure they are crying out for, and in return we’ll ask them to pay their fair share.
Labour’s vision places investment at the centre.
Every part of our country has talent and potential.
Every person living here deserves to their own potential realised.
But decisions taken by this Conservative government do not reflect that.
The value of planned investment per person in London is more than twelve times the planned investment in the North East.
We need to bring every part of the country up to the level of the best in its transport, its housing, and its communications.
We’ll create hundreds of thousands of secure, well-paid jobs across the whole country.
This country has an enormous potential in the renewables industries of the future, but we’re not reaching it because we have a government that is failing us.
We have the natural resources and the engineering heritage to become a world-leading supplier of clean technology.
Backed up by an industrial strategy, we’ll lead the drive to decarbonise our economy and create the jobs of the future.
As part of that investment in future prosperity, the next Labour government will commit to funding tidal lagoon technology, supplying millions of homes with secure, low-carbon electricity for the next century.
It’s the investment that government can deliver that will rebuild and transform those communities that have been left to fall by the wayside.
It’s the investment in education that government can deliver that will make sure our young people have the skills they need to get the good jobs they deserve.
It’s the investment in housing that government can deliver that will ensure all our families have safe, secure, decent home to live in.
It’s the investment in superfast broadband that will give our smaller businesses the capacity to succeed in a changing world.
It’s the investment in research that government can deliver that will give our scientists and engineers the capacity to develop and apply the technologies that can transform this society.
That means a commitment to sustained increases in government research funding, alongside continued support for private sector researchers. The next Labour government will aim towards the OECD target of 3 percent of GDP a year on all research, and we can start by doubling government spending on energy research.
If we want every part of our country to prosper, as we should, we have to make sure every part of our country has the capacity to succeed in a changing world.
After Donald Trump’s victory – we understand the price for failure. When decade after decade the rich get richer and the ordinary people see their incomes stagnate, something snaps.
I hope to see from Philip Hammond a commitment to deliver investment not just in a few hotspots, favoured by the Treasury and benefiting the lucky few, but a real commitment of resources to every part of our country.
With the costs for government investment at close to the lowest they have been in history, now is the time for government to commit to invest – as we have long argued and as the Chancellor’s Cabinet colleague, the Chief Secretary to the Treasury has now accepted.
And those resources that government can commit shouldn’t just go on the big-ticket projects, important as they are.
It’s not enough to only build a high-speed rail line to connect the places that are already successful.
We can’t just ask those in left-behind Britain to stand and wave at the trains as they go shooting past.
It’s government that needs to provide the resources for our local communities to invest in what they need to succeed.
It’s central government that can provide the scale of investment we now need, after decades of underfunding.
But it’s our local communities and our regions that need to take back control of their own economic destinies.
The alternative is the disarray we can now see from this Government.
They can’t tell us their negotiating position for Brexit, and they’ve delayed telling us how they intend to deliver an industrial strategy.
They have no coherent plan for Brexit and no coherent vision of how our country will prosper.
That is why we see a government in stasis as its shambolic approach to Brexit extends into every aspect of government.
But the reasons it’s shambolic is because the closed-minded Brexit the Tory establishment want deep down is one the British people do not.
They have the wrong ambitions for our economy, and the wrong ambitions for Brexit, which means they will continue to undermine the ambitions of working people.
It also means we will be left with a Brexit that works only for bankers and the rich, instead of one that’s based on fairness and works for the rest of us.
Labour has argued for a Brexit that prioritises jobs, prosperity and the public finances.
The source of this chaos stems from weakness at the very top of government.
According to reports just this weekend, the Prime Minister and Chancellor are too busy fighting each other than fighting for an ambitious Brexit deal for Britain.
We appear to have a Chancellor who is slapped down by his Prime Minister when he makes an announcement, and ignored by her as she sets his economic policy for him.
According to other reports he is also isolated by his Cabinet colleagues to such an extent that it seems he has to read about the Brexit negations with the rest of us in the newspapers.
The CEO of Nissan probably knows more about our Brexit negotiating position than the Chancellor.
Britain cannot afford a weak Chancellor who cannot find his voice, when our country faces the biggest economic challenges for a generation. It’s time he steps up to the task, and stands up to his Cabinet colleagues.
Donald’s Trump victory in America has underlined the point that the old rigged economy working just for those at the top has failed.
But the Trump plans to increase infrastructure spending serves as a smokescreen to cut taxes for those at the top and to deport migrants.