John McDonnell MP, Labour Shadow Chancellor, responding to the announcement today by the Chancellor that he is finally dropping his surplus target after 9 months of pressure from the Labour leadership, said:

“I welcome the Chancellor’s decision to finally listen to the calls made by myself and Jeremy Corbyn over the last nine months to drop his failed surplus target. It is only a shame he was not more realistic sooner, as under Jeremy Corbyn, Labour has been unequivocal in its opposition to failed Tory austerity.

“Sadly the vote last Thursday for Brexit has only brought forward what was inevitable. The Chancellor had already dropped his other fiscal rules on welfare and debt at the Budget in March, and according to many economists he was expected to be forced to drop this one too.

“In fact, there were no credible economists that could be found to support the Chancellor’s surplus target in the first place. And we are not dropping our Fiscal Credibility Rule as it’s robust and flexible enough to provide the investment our economy needs.

“The truth is as Labour consistently warned, George Osborne’s recovery built on sand was underpinned by a fiscal rule that is not robust or flexible enough to equip our economy for any potential shocks it may face.

“We now need the Chancellor to inform us what evidence he has had passed to him from the OBR, as working families need to be reassured and a plan put in place. He should now lay out a programme of government investment and support for businesses, bringing forward shovel-ready projects particularly in those areas hardest hit by long-term economic decline.”