Labour un­der Cor­byn would bank­rupt Bri­tain

A Marx­ist man­i­festo would undo all the hard work of the past 10 years and re­sult in a fi­nan­cial night­mare

The Daily Telegraph - - Letters To The Editor - PHILIP HAM­MOND Philip Ham­mond is Chan­cel­lor of the Ex­che­quer FOL­LOW Philip Ham­mond on Twitter @Philipham­mon­duk; READ MORE at tele­graph.co.uk/opin­ion

Ten years ago the fi­nan­cial sys­tem crashed, send­ing shock­waves around the world and caus­ing last­ing eco­nomic dam­age which we are still deal­ing with to this day. In the im­me­di­ate af­ter­math, our econ­omy en­tered its worst re­ces­sion since the Sec­ond World War, un­em­ploy­ment soared and wages fell sharply.

Be­cause of the last Labour govern­ment’s mis­man­age­ment of the pub­lic fi­nances, the UK en­tered the cri­sis ill-pre­pared. De­spite hav­ing en­joyed 10 years of eco­nomic growth, Labour had reck­lessly racked up the coun­try’s bud­get deficit.

When they en­tered govern­ment in 1997, our bud­get deficit was just £9 bil­lion; by the time of the crash, de­spite a decade of un­in­ter­rupted growth, Labour had al­lowed it to bal­loon to more than £40 bil­lion.

Other coun­tries dur­ing this pe­riod of in­ter­na­tional growth had pru­dently built up bud­get sur­pluses. But by the time Labour left of­fice in 2010, they had racked up the big­gest deficit in our peace­time his­tory, at more than £150 bil­lion.

Labour’s legacy to the 2010 Con­ser­va­tive-led govern­ment was neatly sum­marised in Liam Byrne’s in­fa­mous note to his suc­ces­sor ad­mit­ting there was no money left.

We moved swiftly to re­form the bank­ing reg­u­la­tion sys­tem that Gor­don Brown had in­tro­duced, tight­en­ing the re­quire­ments and pro­tect­ing con­sumers and tax­pay­ers from the ef­fects of fail­ure.

We made the banks safer by re­quir­ing them to hold more cap­i­tal than they did be­fore the cri­sis. We in­tro­duced a new regime to en­sure that bank share­hold­ers and cred­i­tors – not the tax­payer – bear the losses of a bank’s fail­ures.

And we re­quired the largest UK banks to sep­a­rate their re­tail bank from their in­vest­ment bank. This change means that if ei­ther part of the bank fails, it will be eas­ier to man­age the fail­ure in an or­derly way with­out the need for a govern­ment bail-out – and with­out leav­ing tax­pay­ers on the hook.

We also had to take some tough de­ci­sions on spend­ing to get back con­trol of the na­tion’s fi­nances. Over eight years we have cut the bud­get deficit by over three-quar­ters so we spend less on debt in­ter­est and more on pub­lic ser­vices.

We have sup­ported three mil­lion more peo­ple into work so they now have the se­cu­rity of a reg­u­lar wagepacket. We have cut youth un­em­ploy­ment to a record low. We have in­tro­duced the Na­tional Liv­ing Wage, boost­ing the earn­ings of the low­est-paid by £2,000 a year over the past two years, and we have cut in­come tax for 31 mil­lion peo­ple to pro­tect liv­ing stan­dards and give them more choice on how to use their own money.

Be­cause of our bal­anced ap­proach to the econ­omy, we have also been able to in­vest more in key front­line pub­lic ser­vices such as schools and the NHS, and raise the level of in­vest­ment in our pub­lic in­fra­struc­ture to its high­est for 40 years, along with mak­ing progress on re­pair­ing the na­tion’s fi­nances.

But all this progress is at risk if Jeremy Cor­byn’s Marx­ist man­i­festo is al­lowed to gain trac­tion.

At the core of Labour’s eco­nomic phi­los­o­phy is end­less spend­ing, in­creased cen­tral­i­sa­tion and mount­ing debt.

The mask slipped on the charm of­fen­sive by Labour’s shadow chan­cel­lor John Mcdon­nell this week when it was re­vealed he had called his own plan for a £500 bil­lion spend­ing spree “medi­ocre” and just “a first step”. The only step he would be tak­ing is to bank­rupt Bri­tain.

Labour have learnt noth­ing and their cur­rent lead­er­ship are plan­ning a spend­ing, bor­row­ing and tax­ing splurge that makes Gor­don Brown look like Scrooge.

The great risk for our coun­try is that this rad­i­cal, dan­ger­ous and ide­o­log­i­cally driven eco­nomic nar­ra­tive takes hold; that the mem­ory of the fi­nan­cial crash be­gins to fade; that Labour’s record of leav­ing of­fice with more than half a mil­lion more peo­ple out of work and youth un­em­ploy­ment ris­ing by 44 per cent is for­got­ten.

It is of­ten said that Cor­byn has cap­tured the youth vote. But it will be the young, our chil­dren and grand­chil­dren who are left to shoul­der the cost of Labour’s planned bor­row­ing binge.

And it will be the young who would face fu­ture eco­nomic shocks un­pre­pared as Labour undo all the hard work of the past 10 years and rack up the deficit once again.

No one should be in any doubt – the big­gest dan­ger to our econ­omy, peo­ple’s liveli­hoods and their pros­per­ity is the eco­nomic il­lit­er­acy of Cor­byn’s Labour party.

It’s a dan­ger the likes of which we have not faced for decades and one that we must stop, for the sake of fu­ture gen­er­a­tions.

If there is any­thing we have learnt from the fi­nan­cial crash 10 years ago, it’s that this coun­try can­not af­ford an­other Labour govern­ment.

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