LABOUR’S FAN­TASY PLANS TO BANK­RUPT BRI­TAIN

Scottish Daily Mail - - News - By Daniel Martin Pol­icy Ed­i­tor

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 pledged £250bil­lion of spend­ing over the next ten years for a green fund to in­vest in clean en­ergy and in­su­la­tion. on top of this, there will be a £150bil­lion ‘so­cial trans­for­ma­tion fund’ last­ing five years for hos­pi­tals, schools and in­fra­struc­ture.

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 plans – which work out at £55bil­lion a year for the next five years – 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

‘An at­tempt to bribe you with your own money’

said the 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.’

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