LABOUR’S FANTASY PLANS TO BANKRUPT BRITAIN
Economists warned that Labour could ‘bankrupt Britain’ last night after the party unveiled plans to increase spending by an extraordinary £55billion a year.
In a major election rally yesterday, shadow chancellor John McDonnell vowed that Labour would unleash levels of spending ‘on a scale never seen before’.
He promised a £150billion ‘social transformation fund’ lasting five years for hospitals, schools and infrastructure. on top of this, he vowed to spend £250billion over the next ten years on a green fund to invest in clean energy and insulation.
And last night, Peter Dowd, the shadow chief secretary to the treasury, admitted the British people ‘will pay’ for the huge investment pledges.
Asked who would foot the bill for the £400billionworth of promises, he said: ‘the British people will pay for this as part of our investment package.’
The pledges work out at £55billion a year for the first five years, taking into account just half of the ten-year green fund. the plans would see public investment spending almost double and would be funded by sky-high borrowing.
The shadow chancellor declared: ‘our aim as a Labour government is to achieve what past Labour governments have aspired to: an irreversible shift in the balance of power and wealth in favour of working people. that means change, which means investment on a scale never seen before in this country and certainly never seen before in the north and outside of London and the south East.’ But the independent institute for Fiscal studies said the
‘An attempt to bribe you with your own money’
policies would cost the eye-watering equivalent of £1,900 per household – and send borrowing soaring. it added the figures were so high, the money would be almost impossible to spend.
Responding to mr Dowd’s comments, business minister nadhim Zahawi said: ‘the cat is well and truly out of the bag. Peter Dowd, the man in charge of Labour’s spending plans, has admitted that the “British people will pay” for the cost of Jeremy corbyn’s reckless borrowing spree.’
Matt Kilcoyne from the Adam smith institute warned: ‘ John McDonnell’s decision to throw away all fiscal discipline underlines the threat he poses to all British families. Hundreds of billions of pounds raided from your pensions, borrowed from your children, is an attempt to bribe you with your own money. McDonnell could bankrupt Britain.’
Paul Johnson, the IFS director, told BBC Radio 4’s today programme: ‘the real question, in the short run, is would it be possible sensibly to spend this scale of money? moving to a world in which you’re doubling [spending] within a year or two, i would suspect, is actually just physically impossible to get there that quickly.’
The IFS said the plans would take UK government investment spending from around the bottom of the international league table to around the top.
Ben Zaranko, IFS research economist, said: ‘ Labour wants to increase investment spending by £55billion per year, the equivalent of £1,900 per household, with this investment initially financed through higher borrowing’.
speaking at the rally in Liverpool, Mr McDonnell said: ‘i can tell you today that Labour’s national transformation Fund will be bigger than we promised at the 2017 election. For areas that haven’t had their fair share for years. We’ll deliver £250billion of investment here and around the country over the next ten years through our Green transformation Fund.
‘We’ll also commit to an additional £150billion in a new social transformation Fund spent over the first five years of our Labour government. the social transformation Fund will begin the urgent task of repairing our social fabric that the tories have torn apart.
‘£150billion to replace, upgrade and expand our schools, hospitals, care homes and council houses. to deal with the human emergency which the tories have created, alongside the climate emergency.’
Edwin morgan, from the institute of Directors, responded: ‘Politicians must remember that they don’t have a blank cheque.’