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Now that Theresa May has handed over No 10’s spare keys to Jeremy Corbyn, it’s worth reminding ourselves what the Labour leader might do to Britain if he takes her set of keys as well.
At first glance, Corbynomics does not add up to a coherent philosophy as there is a such a huge gulf between what Corbyn says, and what the party’s manifesto supports.
If you had listened only to the wilder threats made by Corbyn, and his shadow chancellor, John McDonnell, over the last few years, you would have every right to be terrified that these Marx brothers in arms do indeed crave “permanent revolution” and the overthrow of capitalism.
Nor have they made any secret about their threats. Quite the reverse. Corbyn boasted last year, a boast which was filmed and went viral, that: “When they [bankers] say we’re a threat, they’re right.”
A self-declared Marxist, McDonnell has said many times that he wants to nationalise the banking system along with all the other big utilities such as water and rail. It’s also why McDonnell is said to favour a No-Deal Brexit, because of the upheaval such a move might foment, creating an opportunity.
And if you judge a man by whom he praises, then Corbyn’s admiration of Hugo Chavez suggests he would like to follow his hero by turning Britain into a Venezuelan style interventionist socialist state, but one without the oil or the sun.
Yet the truth is on economics we don’t know precisely what to expect from a Corbyn-led government, partly because the Labour leader has been disingenuous about what his so-called radical Corbynomics adds up to.
Like his tortuous and tantric positions on Brexit, Corbyn’s economic policies look as though they have been designed to appeal to both his far-left Momentum Marxist supporters and the soft-belly of traditional Labour supporters.
Is that on purpose? As Corbyn has shown brilliantly over the last two years, he does rather well out of muddling along, hiding in the shadows and never revealing his own position on what matters. But as the Conservatives are belatedly finding out on Brexit, you can’t be all things to all men and women and sooner or later, you get found out.
In Labour’s economic manifesto, the policy recommendations come across as much milder in tone than the threats from the party’s leaders. Indeed, they are policies not unlike what Ed Miliband was offering as Labour leader, some of which have been copied by the PM herself.
On the economy, the manifesto from the last election says the strategy is about “delivering a fairer, more prosperous society for the many, not just the few. We will measure our economic success not by the number of billionaires, but by the ability of our people to live richer lives.”
There are even some good blue-sky and interesting policies to help achieve this: more money for rail and other regional infrastructure, more devolution, more investment in local communities and so forth.
What is perhaps surprising is that the Marxists running the show haven’t promised to banish wealth creation, or not entirely. “Labour understands that the creation of wealth is a collective endeavour between workers, entrepreneurs, investors and government. Each contributes and each must share fairly in the reward.” Hard to disagree with that either but the word “collective” could be loaded.
Fears that Corbyn would fleece the rich may have been overdone, since the manifesto says 95 per cent of taxpayers will be guaranteed no increase in income tax contributions or NI contributions. But he would bring back the 50p rate of tax on those who earn above £123,000 per year and introduce an income tax rate of 45p on £80,000.
The manifesto is most interesting on small business, perhaps the sector of the economy where the Conservatives have been most maladroit. Which is why Labour dares to make this claim: “This Conservative Government has taken small businesses for granted. Labour is the party of small businesses. We understand the challenges our smaller businesses face.”
What a dreadful state of affairs where Labour can make such a statement, yet that is exactly what many small business owners feel too. To help them out, the manifesto recommends a new National Investment Bank, regional banks to help SMEs and help smooth the funding gap, as well as much tougher Australian style rules for late payments. Hard to disagree with any of those suggestions either.
There are other more interventionist measures such as increases on corporation tax and warnings that company boards would have to reserve a third of places for workers. There’s also the totally mad – and probably illegal – scheme to force companies to give 10% of their shares to workers but nothing that would cause a bank run.
What we do also know is that McDonnell has written to Sir Tom Scholar, the Treasury’s senior mandarin, to warn him that Labour would rip up government plans for a three-year spending review, replacing it with five-year plans for spending in government departments.
The shadow chancellor has also said the Treasury should “widen the range of economic theories and approaches in which its officials and those in the rest of government are trained” to include more left-wing economic theories. To give McDonnell more control over public spending across Whitehall, he wants to bring back public service agreements — created by Gordon Brown and scrapped by George Osborne — between the Treasury and other departments. He has also proposed that Treasury officials consult members of the public and trade unions in “listening exercises” around the country – a move not dissimilar to one introduced recently at the Bank of England.
More controversially, McDonnell says civil servants should focus on the reduction of inequalities and poverty when they put together policy.
That’s pretty radical, if not tricky, but hardly the stuff of revolution. As the polls are showing, Labour’s policies are finding resonance with the public. That’s not surprising either, as they become increasingly sick of the government’s failure to sort out Brexit, sick of some of the more egregious levels of pay for company bosses, appalled at corporate fiascos such as Carillon and BHS, tax avoidance by the big US tech giants like Amazon and Facebook, stagnant wages and perceived rising inequalities.
The question voters will have to ask is, when the next general election is called, whether to believe the wilder claims of Corbyn and McDonnell or to trust the party manifesto. If its any consolation, those with the big money – industrialists such as James Dyson and Jim Ratcliffe of Ineos and hundreds of other the country’s wealthiest – have already moved their money overseas. You can’t go wrong following the money.
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Iain Martin and the team make sense of the news, providing commentary and analysis on the stories that matter in politics, geopolitics, economics and culture.