John McDonnell interview: ‘The only way to balance the books is through wealth taxes not welfare cuts’

Veteran Labour MP and former Shadow Chancellor John McDonnell has warned Prime Minister Andy Burnham that the only way to balance the books is through wealth taxes because MPs will ‘not vote for welfare cuts’.

McDonnell made the comments during an interview with LFF, in which he welcomed the change in atmosphere and culture in the party but said that there was still a long way to go.

Burnham has not shied away from the difficult choices and has said tough decisions will have to be made in the budget in October as he vows to retain fiscal discipline while delivering bold and radical measures.

The Prime Minister has overseen a reversal in the party’s poll ratings as Labour overtakes Reform.

Asked whether he thought the Prime Minister was on the right track, McDonnell said he welcomed the change in atmosphere and culture but that there was still a long way to go.

Burnham has previously made clear that the country must be grounded in fiscal responsibility and that he would stick to his predecessor’s fiscal rules.

The Prime Minister has said that the country is too in hock to the bond markets, however McDonnell told LFF that ‘fiscal rules aren’t the problem’.

‘The only way to balance the books is to increase tax on wealth because there’s no way they’re going to get welfare cuts through, no matter what Louise Haigh and the others are saying at the moment because MPs wont vote for it”, said McDonnell.

The Prime Minister has previously signalled he could make it harder to claim benefits, saying the UK must “get really serious” about curbing the welfare bill, however McDonnell’s comments show that some MPs could well resist.

He did praise Burnham’s pledge on social care saying that if he delivered it would be ‘phenomenal’.

The former Mayor of Manchester has vowed to overhaul social care and said that he wants to set up a  national care service for England, which will be free at point of use to transform the country’s ‘broken’ social care system and did not rule out tax rises to fund it.