One of Labour's most popular policies would be a massive increase in spending on the NHS. Forgetting this is not necessarily the solution to its problems, the sad fact is there would not be the money available in all but the short-term. Sadly this commitment along with extra spending elsewhere totalling nearly £50bn will not be matched by the increased revenues. As I have said many times, and is corroborated by the highly respected and independent Institute for Fiscal Studies, tax increases from corporation tax and on personal incomes on those earning over £80k will yield very little in the short-term and probably a negative amount over the medium-term. Both capital and labour is ever more internationally mobile and will go to where these rates are lowest. It may have escaped you for example that corporation tax revenues have rocketed in the UK recently despite the tax rate falling.
On top of this, the manifesto confirmed that a Labour government would renationalise the railways, the Royal Mail and the National Grid and even Water, undoubtedly a superficially attractive policy given the various problems and issues there have been in these sectors. This is despite the overwhelming evidence that nationalisation is far inferior to privatisation. The answer is clearly better regulation. Such a renationalisation plan would be a massive undertaking akin to implementing Brexit. The biggest concern however would be how it would be funded. It seems by borrowing! This would only add to the national debt and result in massive increases in interest payments (and less money for public spending) and a 'crowding out' of private investment through higher interest rates. Such tax, spend and borrowing policies would be especially bad as we leave the EU and need to boost our competitiveness.
The polls may well narrow as some of the electorate become seduced by some of these unaffordable policies, especially among the idealistic young that do not remember the 1970s. But while Corbyn managed by an abused election system to become leader of the Labour party, he is very unlikely to become PM. The issue of his lack of competence and of his senior shadow cabinet has been there for all to see in this election so far. Related to this too is the lack of economic credibility that has been built up from the disastrous spending policies - but far more modest than is planned now - of the Blair/Brown government years that was the underlying cause of the bad public finances that the coalition government inherited. And if this is not enough, Corbyn's ambivalence on use of Trident even though he would spend the money on renewing leaves grave doubts of his suitability for the top job. The electorate votes typically on the relative suitability of a party leader to be PM and on its party's economic credibility. It is no contest.
On top of this, the manifesto confirmed that a Labour government would renationalise the railways, the Royal Mail and the National Grid and even Water, undoubtedly a superficially attractive policy given the various problems and issues there have been in these sectors. This is despite the overwhelming evidence that nationalisation is far inferior to privatisation. The answer is clearly better regulation. Such a renationalisation plan would be a massive undertaking akin to implementing Brexit. The biggest concern however would be how it would be funded. It seems by borrowing! This would only add to the national debt and result in massive increases in interest payments (and less money for public spending) and a 'crowding out' of private investment through higher interest rates. Such tax, spend and borrowing policies would be especially bad as we leave the EU and need to boost our competitiveness.
The polls may well narrow as some of the electorate become seduced by some of these unaffordable policies, especially among the idealistic young that do not remember the 1970s. But while Corbyn managed by an abused election system to become leader of the Labour party, he is very unlikely to become PM. The issue of his lack of competence and of his senior shadow cabinet has been there for all to see in this election so far. Related to this too is the lack of economic credibility that has been built up from the disastrous spending policies - but far more modest than is planned now - of the Blair/Brown government years that was the underlying cause of the bad public finances that the coalition government inherited. And if this is not enough, Corbyn's ambivalence on use of Trident even though he would spend the money on renewing leaves grave doubts of his suitability for the top job. The electorate votes typically on the relative suitability of a party leader to be PM and on its party's economic credibility. It is no contest.
