Chancellor George Osborne on Wednesday urged opposition Labour Party lawmakers to rebel against their newly-elected leader, Jeremy Corbyn, and support a Conservative proposal to enshrine new rules on fiscal discipline in law.
Parliament is due to vote later in the day on rules that commit the government always to target a budget surplus in 'normal' economic times – a move that he says is needed to cut the national debt and provide long-term economic security.
The policy has wrongfooted Labour's new left-wing leadership and allowed Osborne – seen as the frontrunner to succeed Prime Minister David Cameron – to try to exploit a rift between the opposition's socialist leaders and its more moderate lawmakers.
"I call on all moderate, progressive Labour MPs to defy their leadership and join with us to vote for economic sanity," Osborne said ahead of a parliamentary debate on the charter.
The 'Charter for Budget Responsibility' has been interpreted as an attempt to push Labour into either voting against its aims and facing accusations of poor fiscal discipline, or backing them and so lining up behind Conservative policy.
Labour finance spokesman John McDonnell last month said his party were not "deficit deniers" and would back the charter, drawing criticism from lawmakers who said it undermined their opposition to austerity.
Seeking to address those concerns, McDonnell reversed his position this week, calling on Labour to oppose the charter.
"I don't want the Labour Party associated with this policy," McDonnell said on Tuesday. "I realised the consequences of the government's failure to invest in infrastructure and skills, the cuts that are going to start coming now, I realised that people are actually going to suffer badly."
The U-turn prompted some Labour lawmakers to publicly question his strategy – exposing a split between the hard left leadership that won control of the party in September and moderates who fear a socialist agenda could make the party unelectable.
McDonnell's predecessor, the centre-left lawmaker Chris Leslie, said the party should abstain in the vote and focus on putting forward its own economic alternative.
Cameron's centre-right Conservatives won a surprise majority in a national election in May on a platform of delivering economic discipline through deep cuts to welfare and other government spending. They should be able to pass the charter without opposition support.
