Jeremy Corbyn says he wants a “fundamental shift” in economic policy and for Labour to be a “credible alternative” rather than “Tory light”. To those who say he wants to take the party back to the 1980s, he has said he’d go back a decade further, to the 1970s Wilson/Callaghan Labour government.
According to his critics, the Islington North MP’s vision for Britain is so left-wing it would make the Labour Party unelectable. But what do we know so far about the policies he would want to bring in if he did win power?
There would be an “end to austerity”, higher taxes for the rich and protection for people on welfare – and a new crackdown on tax avoidance and tax evasion, as well as “corporate welfare”, tax breaks for companies. He claims this plan could “double” the NHS’s income.
He believes in paying off the deficit but not through spending cuts – and not to meet an “arbitrary” date.
Mr Corbyn has also said he would consider introducing a “maximum wage” to cap the pay of top executives and he would renationalise the Royal Bank of Scotland.
Corbyn has been a consistent supporter of renationalising public utilities, such as the former British Rail and energy companies. Initially Corbyn suggested completely renationalising the entire railway network, but would now bring them under public control “line by line” as franchises expire.
The problem with Corbyn’s ideas are this:
- Increasing tax on the wealthy doesn’t equate to more tax revenues. Instead what happens is employees and job-producing firms who have no incentive to increase sales (because they’ll be taxed) effectively stop manufacturing and trading therefore damaging job prospects. If the government is going take away 50% of your income you might as well stop working.
- Increasing benefits payments doesn’t improve the economy. Jobless individuals could start a business. Instead, people with no incentive to work either for themselves or for others will be rewarded with benefits. Those who are unable to work due to ill health are in a different situation, however.
- Rather than finding ways to make the NHS more efficient, or even making small changes like, for example, charging £1 for a check-up, Corbyn proposes spending even more money on the NHS. Sounds great, but where will the money come from? See point 4..
- The Bank of England would be allowed to print even more money – “People’s Quantitative Easing” – for “new large scale housing, energy, transport and digital projects”. Mr Corbyn says this would create “a million skilled jobs and genuine apprenticeships” with knock-on boosts for the supply chain. So Corbyn’s genius idea is to increase national debt even more. More debt, more money which the taxpayer has to return to the Bank of England. It’s not a solution, it is merely kicking the problem down the road for another day.
- Nationalisation has a fundamental flaw- it is inefficient and ineffective. Politicians running a complex operation like a railway has always been a disaster and are generally not required to meet any efficiency objectives set by the state.
The issue with rejecting Corbynomics is that people are assumed to be Capitalists. Maybe the answer is somewhere between the two.