Shadow chancellor demands ‘emergency Budget’

The shadow chancellor John McDonnell has demanded an ‘emergency Budget’ for public services, a week before the Chancellor of the Exchequer presents his autumn Budget to Parliament.

McDonnell is promising to spend an additional £17 billion a year on the NHS, social care, schools and local government.

The extra spending would be paid for by tax rises for corporations and ‘the rich’.

The government said Labour’s plans would lead to moe debt, higher taxes and fewer jobs.

McDonnell asked for an end to austerity by the government, and outlined five proposals, namely: to pause the roll-out of Universal Credit to fix delays in benefits payments; to fund public sector pay rises; to put more money into infrastructure such as road and rail projects; to increase funding for health, education and local government; and to launch a large-scale house-building programme.

He said the Conservatives were giving away around £76 billion in cuts to corporation tax, capital gains and ‘the rich’ during this time of Parliament.

He said Labour had already calculated 36.5 billion could be raised from clamping down on tax avoidance, but he believed that could be significantly higher after the leaking of the Paradise Papers.

McDonnell told BBC Today: “We need an emergency budget to tackle the very emergencies our public services are having to address, so this mustn't be a Budget that's about stunts or something that will try and protect Theresa May in her job, it's got to be a serious Budget that looks at the real issues facing our community.”

He said more action was needed to tackle the ‘housing crisis’.

McDonnell added: “The real problem that we've got is seven years of lack of investment in housing and what we need is a large-scale housing programme, I think led by local councils, and if the government can commit towards that, we might be able to then really start to tackle the housing crisis that we've got.

"I don't think this will go anywhere near that."

He believes Mr Hammond could do a lot more, saying: “He wants to pretend he cannot invest on the scale needed, yet he has already borrowed more in his first year as chancellor than any of his predecessors in their first year at the Treasury."

Responding to McDonnell’s proposals, Chief Secretary to the Treasury Liz Truss said: “The shadow chancellor has today admitted Labour would borrow billions more and hike up taxes to record levels.

"The costs would rack up and up - putting economic growth at risk and hitting ordinary working people in the pocket.

"Only the Conservatives can build a country that is fit for the future.”