Labour Vies With Tories to Ramp Up Spending Plans: U.K. Votes

Labour Vies With Tories to Ramp Up Spending Plans: U.K. VotesLabour Vies With Tories to Ramp Up Spending Plans: U.K. Votes

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Both of the U.K.’s major parties are rolling out big spending plans. Chancellor of the Exchequer Sajid Javid said a Conservative government would borrow about 20 billion pounds ($26 billion) extra a year to invest in infrastructure, overhauling fiscal rules after almost a decade of austerity.

Labour’s economy spokesman John McDonnell pledged 250 billion pounds ($321 billion) of infrastructure investment over 10 years, and 150 billion pounds over five years on state education, social housing and health care.

Read more: Javid Allows Borrowing for Investment in Revamp of U.K. Rules

Key Developments:

Javid plans to balance current budget while boosting borrowingMcDonnell says finance sector key to Labour’s investment plansBoris Johnson campaigns in Scotland, Northern IrelandLiberal Democrats, Greens and Plaid Cymru reach electoral pact in 60 seats to try to ensure MPs elected from “Remain alliance”Labour hit by resignation of Deputy Leader Tom WatsonBank of England keeps interest rates unchanged, but says easing may be needed due to Brexit uncertainty and global showdown

Labour’s Dawn Butler to Stand for Deputy Leader (1:30 p.m.)

Dawn Butler, Labour’s equalities spokeswoman, said she will stand to be the party’s deputy leader following Tom Watson’s decision to stand down.

“I’ve thought very carefully about who should replace Tom and after giving it some thought I will be throwing my hat in the ring,” Butler told Bloomberg TV after Watson’s announcement on Wednesday evening.

Butler highlighted her “track record of being very supportive to our leader Jeremy Corbyn” as a reason party members should vote for her — a sign of how much power has shifted firmly to Labour’s socialist wing.

McDonnell Pledges Spending Boost, Warns Banks (11:45 a.m.)

Labour’s economy spokesman John McDonnell announced his party’s own spending pledge: a National Transformation Fund of 250 billion pounds ($320 billion) over a decade for infrastructure, and a Social Transformation Fund of 150 billion pounds over five years to transform state education, health care and social housing.

Speaking in Liverpool, northwest England, McDonnell said the money would go to “areas that haven’t had their fair share for years.” He also said banks would be pushed to fund investment.

“We can’t do it if the private finance sector isn’t pulling its weight too,” he said. “The days of the City dictating terms to the rest of the country are over.” McDonnell said there will be opportunities for large-scale private investment alongside government investment “because it will marry up.”

Javid Revamps Rules to Boost Borrowing (10:55 a.m.)

Chancellor of the Exchequer Sajid Javid has opened up the U.K.’s spending taps, setting out new fiscal rules he said a Conservative government will follow that reflect a cheaper environment for borrowing. Javid proposed three rules:

A balanced current budgetBorrowing for investment won’t exceed 3% of GDPThat ceiling will be re-evaluated if debt servicing costs rise

“It’s a responsible time to invest,” Javid said in a speech in Manchester, northwest England.

In practical terms, it means around 20 billion pounds ($26 billion) a year extra for investment, something Javid said would deliver a “decade of renewal.” The announcement ends months of speculation over what would replace the current fiscal rules, which require borrowing to be less than 2% of gross domestic product in 2020-21.

Javid will almost certainly breach that ceiling after announcing an extra 13.4 billion pounds ($17.2 billion) of spending on public services in September.

Long-Bailey: Media Misrepresents Labour on Brexit (9 a.m.)

Labour’s business spokeswoman Rebecca Long-Bailey accused the media of misrepresenting the main opposition party’s position on Brexit, and said voters back it once they have it explained to them.

“Our position is to ensure we get a credible deal that puts the economy first and protects jobs and living standards and to deliver that to a public vote — with Remain on the ballot paper,’’ she said in an interview with Bloomberg TV. “It seems to go down well whether you voted to leave or voted Remain, because the final decision will be yours to make.’’

Long-Bailey said Tom Watson is “a force of nature’’ and the deputy Labour leader’s departure would leave “a big hole’’ in the party. Earlier, she told BBC radio that Ian Austin’s advice (see 7:20 a.m.) for Labour supporters to vote Tory was “absolutely absurd.’’ If they want to protect their communities, they should back Labour, Long-Bailey said.

Tories Make Hay With Labour Woes (8:20 a.m.)

The Conservatives immediately jumped on divisions in the opposition Labour Party, and welcomed former MP Ian Austin’s endorsement (see 7:20 a.m.) of Prime Minister Boris Johnson.

“Ian Austin has been a Labour MP for 14 years so he knows Corbyn better than most,’’ Chief Secretary to the Treasury Rishi Sunak said in an email. “He says that a vote for Corbyn’s Labour would put businesses and jobs at risk, that Corbyn’s economic policies would make our country worse and that his ideas on Brexit are a complete fantasy.’’

The split gives the Tories a chance to turn up the heat on Labour after two days in which Johnson and his cabinet came under fire amid accusations they are out of touch with ordinary people.

Remain Alliance Targets 60 Seats (7:30 a.m.)

The Liberal Democrats, Greens and Plaid Cymru have reached an electoral pact that will see two of the parties standing aside in 60 seats to ensure MPs are elected from the “Remain Alliance” opposed to Brexit.

Constituencies targeted include Richmond Park, in west London and Cheltenham, where the Liberal Democrats will be given a clear run. The Liberal Democrats will stand aside in Isle of Wight and Brighton Pavilion to assist the Greens, according to former MP Heidi Allen who coordinated the move.

“We are facing the real danger of a no-deal Brexit or a hard Brexit with a Boris Johnson government,” Allen told BBC radio. “This is country first stuff, it’s not about them and them winning, it’s about what’s best for the country.”

Former Labour MP Ian Austin: Vote Tory (7:20 a.m.)

Former Labour MP Ian Austin, once a senior adviser to prime minister Gordon Brown and a member of the party for 34 years, said he would not be standing for Parliament on Dec. 12 and advised voters to back Boris Johnson.

Austin quit the party in February, citing Jeremy Corbyn’s failure to tackle antisemitism in the party and had been sitting as independent in the House of Commons. He said Corbyn has spent his life siding with extremists and shouldn’t be trusted with power.

“I tell decent patriotic Labour voters that they should be voting for Boris Johnson, I can’t believe it’s come to this,” Austin told BBC Radio. “I regard myself as proper, decent, traditional Labour. I just think Jeremy Corbyn’s not fit to run the country.”

Earlier:

Boris Johnson’s Conservatives Fight for Survival in ScotlandLabour Vows Big Spending After Watson Quits: U.K. Campaign TrailBrexit Bulletin: Time to Count the Cost of DelayCorbyn and Johnson Go Wild on Spending: Ferdinando Giugliano

–With assistance from Anna Edwards and Greg Ritchie.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Andrew Atkinson in London at a.atkinson@bloomberg.net;Thomas Penny in London at tpenny@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Thomas Penny

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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