John McDonnell has warned that any move by Labour to cut public spending would be “politically suicidal” and could plunge Britain into a recession. The former shadow chancellor argues the party should hike taxes on the wealthy rather than wield the axe on public services.
A Grim Warning for Rachel Reeves
Keir Starmer has declared that his government will be “ruthless” in adhering to fiscal rules, refusing to rule out further spending cuts. Treasury insiders have told HuffPost UK that the chancellor is determined to maintain an “iron grip” on public finances.
But McDonnell, speaking on Radio 4’s Today programme, said slashing budgets would be a step too far:
“Not only would that be politically suicidal, it would undermine the political support upon which Labour got elected.
In addition to that, you would be taking demand out of the economy and could turn a crisis into a recession.”
Cut Taxes or Cut Services?
As Britain grapples with a falling pound, rising borrowing costs, and spiralling inflation, Rachel Reeves faces mounting pressure. McDonnell insists that taxing the rich is the solution—not cuts to welfare or public services:
“When you’re in this situation, those with the broadest shoulders should carry the heaviest burden. I would look at increasing income tax on the wealthiest … we need an honest discussion about how we tax wealth in our country.”
Fear of Growing Disillusionment
McDonnell also warns that if Labour resorts to austerity, disenchanted voters could be driven into the arms of Reform UK:
“If cuts come, we’re looking at a level of disillusionment which then turns people towards Reform … that would be a disaster for the country.”
Bank of England to the Rescue?
Instead of imposing cuts, McDonnell suggests relying on the Bank of England to weather global market turmoil. While acknowledging that international money markets cast judgment on government policy, he argues the electorate’s response to public spending decisions is far more critical to Labour’s survival.
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