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Labour Will Now Vote Against George Osborne's Budget Plan

Shadow chancellor John McDonnell has U-turned in order to strengthen his party's anti-austerity line – but it didn't go down well with many MPs.

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Labour has changed one of its key economic policies after just two weeks and will now vote against a law requiring governments to run a budget surplus, in an attempt to boost the party's anti-austerity credentials.

Shadow chancellor John McDonnell formally announced the decision at Monday night's meeting of the parliamentary Labour party, reversing his comments in the Guardian a fortnight ago that he would back George Osborne's proposed charter of fiscal responsibility when the House of Commons votes this Wednesday.

Instead, McDonnell told his party's MPs that he wanted to ensure the party's opponents – especially the SNP – could never brand Labour as sufficiently anti-austerity.

"The debate's moved on and we have to change our attitude," McDonnell said according to an individual in the room, saying certain lines in the bill meant he could no longer back it.

He cited worsening changes in the world economy "as a result of the slowdown in emerging markets" over the last two weeks as justification for the move. He had also been attracting criticism from some Corbyn-supporting MPs in his own party who believe the move would have sent out the wrong message to left-wing voters.

The announcement received a mixed response from Labour MPs in the room. Few of them supported Corbyn in the leadership campaign, despite the new leader receiving the overwhelming backing of ordinary members. Many centrist Labour MPs fear that by voting against the law they are walking into a trap set by Conservative chancellor George Osborne designed to make Labour look like a party that will always overspend with public money.

Labour MP Ben Bradshaw left the meeting early and was overheard in a parliamentary corridor declaring it a "fucking shambles", although a spokesperson for Corbyn told journalists afterwards that it had been a "positive" meeting.

When asked by BuzzFeed News how the meeting went, one MP summarised the meeting with a message saying "Argh!"

McDonnell told the meeting that the decision to take this line on public spending would help the party beat the SNP in the forthcoming Holyrood elections: "We have to support our comrades in Scotland."

A spokesperson later confirmed that the Labour leadership had taken the decision to change direction on economic policy following phone calls involving members of the shadow cabinet earlier in the afternoon, rather than at a formal meeting.

At one point during the unusually long parliamentary meeting Labour MP Emily Thornberry shouted at fellow MPs who were texting updates on the meeting to journalists standing outside the room, insisting her colleagues respect the sanctity accorded to such gathering of politicians.

According to those present Corbyn told MPs the current time presented a chance "for rebuilding the party, to get the message out there. The opportunity is there, the chance is there, let's make sure we grasp it with both hands."

One MP raised concerns about the formation of Momentum, a permanent left-wing campaigning organisation based on Jeremy Corbyn's leadership campaign and existing outside the party. The organisation was then defended by Labour MP Richard Burton.

"Someone expressed a view about a party within a party. Richard Burgon said it was the same as organisations within Labour such as the Fabians," said Corbyn's spokesperson afterwards, who finished the press briefing by joking he'd be handing in his notice soon.

Jim Waterson is a politics editor for BuzzFeed News and is based in London.

Contact Jim Waterson at jim.waterson@buzzfeed.com.

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