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
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.