John McDonnell’s new fiscal rule is strong. But it won’t win an election | Andrew Harrop

It'll take more than one good policy to rebuild Labour's economic credibility, so entrenched is the idea that the party caused the crash

John McDonnell's new fiscal rule tweaks a policy the Labour party first came up with 19 years ago. Back then, in May 1997, Gordon Brown called it his "golden rule". The details have shifted around a bit since, but the essentials haven't changed. Then and now the Labour party believes governments should balance the books on day-to-day spending, but borrow to invest.

The idea has stuck because it's a good one. Almost all macro economists support governments borrowing to make productive investments, and most of them worry when ministers like George Osborne make a fetish of surplus budgets at the expense of stronger growth.

When it comes to economic trust, the messenger as well as the message needs to look the part

Related: 'Living within our means' makes no economic sense. Labour is right to oppose it | Ha-Joon Chang

Related: Labour's economic rock stars will expose the Tories as a one-hit wonder | Anne Perkins

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