Beware Labour’s mish-mash of piein-the-sky promises

In the event, the final version of Labour’s manifesto turned out to be even more extreme than the draft leaked last week. Not content with proposing to renationalise energy utilities, the Royal Mail and the railways, the party threw the water industry into the mix for good measure, without giving any indication of who would pay for it or with what. We should not be surprised, therefore, that the man who aspires to be the next Labour Chancellor of the Exchequer is so unsure about how much the country is borrowing. Even as his party prepared to publish a manifesto committing the next government to a spending spree unlike any other, John Mcdonnell struggled to remember the figure for this year’s deficit. But why worry? To paraphrase a former US senator, a few billion here and a few billion there and soon we will be talking real money.

Merely to state, as Jeremy Corbyn did as he launched the programme in Bradford, that all the promises had been “costed” is to miss the point entirely. All that exercise does is to tell you where the money will come from, not whether spending it would be a wise and beneficial use of resources. Indeed, a separate addendum to the manifesto entitled Funding Britain’s Future, providing these supposed costings, made the whole programme appear even less credible, not more.

The £48 billion extra that a Labour government would spend on public services and higher pay and benefits would come in large part from higher corporation tax and by increasing taxes on those earning over £80,000.

There would also be the oft-promised crackdown on tax avoidance, VAT on school fees, an “Excessive Pay Levy” and sundry other measures intended to raise money but which will in truth stifle growth.

The cost of taking the privatised industries back into public ownership is simply ignored, but would run into billions – unless, of course, Labour is proposing to seize the companies and thereby beggar the pension funds of millions of people. Nor has Labour addressed the point that the utilities were privatised because previous governments starved them of investment.

So not only would renationalisation of water, railways and energy be extortionately expensive; it would also produce worse services. How would that help the many, not the few?

Moreover, the facts are that by cutting corporation tax steadily since 2011, the Treasury has actually increased its revenues by 44 per cent by stimulating investment and growth. Were the rate suddenly to go back up to the levels proposed by Labour the government would not only get less money but the country’s competitiveness would be impaired at a time when it needs to prepare for the challenges of Brexit. How would that help the many, not the few?

The economic illiteracy and sheer incoherence of Labour’s programme does not seem to matter to the party’s strategists. They have given up on winning the election but are trying to underpin Mr Corbyn’s vote so that the Left cannot be blamed for the calamity that awaits them on June 8.

If enough people can be persuaded by a mishmash of pie-in-the-sky promises to vote Labour then the hard-liners will claim a triumph of sorts. It is an approach intent on cultivating a pernicious “rich v poor” narrative that seeks to ascribe to the small number of people who pay for public services all the blame for when they fail. That is why the manifesto is peppered with spending pledges that don’t even begin to pay lip service to the need to tackle the country’s extraordinary levels of debt, currently standing at around £1.7 trillion, close to 90 per cent of GDP and equivalent to £25,000 per person.

As Mr Mcdonnell discovered after Googling the answer, the deficit this year is estimated at around £52 billion, or 3 per cent of GDP.

By now, the public finances were supposed to be back in surplus, though Brexit has pushed the fiscal target further back. For Labour, however, promising to spend other people’s money is an article of faith. At the last general election in 2015, a key moment was when Ed Miliband, the Labour leader, denied the Blair/brown governments had spent too much, a statement that prompted national derision. Mr Corbyn, however, yesterday said the problem was that Labour had not borrowed enough. To that end, Labour would also borrow another £250 billion to fund extra investment in infrastructure.

This manifesto is almost a parody of Marxist intent, cheered to the rafters by the faithful who gathered in Bradford but born of envy, spite and a complete lack of understanding of what the country needs or wants. The title For the Many,

Not the Few is the complete antithesis of what the party’s hard Left really believes. For them, egalitarianism exercised through central state power is an ideological ambition to be forced on the many by the few true believers. Mr Corbyn described the manifesto as “modern”, but it is as old as Das Kapital itself.

An addendum with costings made the whole programme appear even less credible

The economic illiteracy of Labour’s programme does not seem to bother strategists