What exactly is the left wing leadership challenger offering?by Prospect Team / August 7, 2015 / Leave a comment
Would Corbyn’s prescription work? © Lauren Hurley/PA Wire/Press Association Images It’s been over two weeks since a shock YouGov poll put left-winger Jeremy Corbyn in first place for the Labour leadership, and since then he’s vied with Andy Burnham for the position of bookies’ favourite. In the meantime, he’s spoken to adoring crowds from Liverpool to Camden and been nominated for the role by more Constituency Labour Parties than any of his rivals. At the same time, Corbyn has accompanied the groundswell in his support by unveiling an extensive policy programme, pitched as an anti-austerity, alternative vision for Britain, and dubbed “Corbynomics.” Key pledges include the establishment of a national investment bank, dramatic expansion of free education, and a large-scale housebuilding project. We asked our expert panel what they thought of his offerings. Economics: Pure soapbox George Magnus—economist and senior advisor to UBS Jeremy Corbyn’s “The Economy in 2020” is a robust rebuttal of George Osborne’s economic strategy, including of austerity as the lodestone of deficit reduction, to be replaced by higher taxes on companies and the better off and public sector-led economic growth. But the centrepiece of the new strategy is pure soapbox; economic amateurism. The Bank of England’s mandate for monetary policy and financial stability and regulation would be broadened to include investment in large scale housing, energy, transport and digital projects. This has been called “People’s Quantitative Easing.” And tax justice policies would raise £120bn by clamping down on tax evasion, tax avoidance and tax debt unpaid. The strategy lacks credibility and is dangerously inexpert.We are being asked to believe in a tax fantasy, while the Bank of England underwrites deficit financing for any purpose, including re-nationalisation. Education: noble, but Naïve Laura McInerney—Editor of Schools Week “Free lifelong education” is an easy sell. People like free, and they believe in the power of education as a redemptive tool. It’s why we all cry at the end of Billy Elliot. Jeremy Corbyn’s promise to make a “national education service”—where people can access school, further education and higher education for free—is noble, but naïve. Not only does free education rely on a corporation tax hike which may push businesses overseas, but it doesn’t appear to have any limits. What’s to stop an aristocrat with a trust fund from spending the rest of their life consuming free higher education paid on the back of taxes? There’s nothing very socialist about that. The Conservatives, meanwhile, committed last parliament to implement all of the recommendations of the Wolf Review, one of which stated that any citizen not using all their free education years by age 19 would receive a voucher for later use. Sadly, it’s the only recommendation that went unimplemented. It would be a simple and strong policy to resurrect. It just doesn’t make for quite such a sexy policy strapline. Housing: turkeys won’t vote for Christmas Nick Duxbury—Executive Editor of Inside Housing Would-be Labour leader Jeremy Corbyn has a sensible, albeit electorally toxic, solution to the housing crisis: to bring down house prices. Corbyn states that the “free market free for all has failed,” so only the state can ensure the provision of genuinely affordable housing. He calls for regional housing targets to be re-established and for local authorities to step up and build half the 240,000 homes a year required to meet current demand. These would be social rented homes that would reduce the housing benefit bill. To pay for this drive, Treasury-imposed council debt caps would be ditched so town halls could borrow to the max, and a national investment bank would be established. Housebuilders would also be clobbered with a land value tax to force them to build and foreign investment would be curtailed. Private landlords would be hit: rents would be capped and a right to (part) buy for private tenants would be introduced. All-in-all, Mr Corbyn bravely wields blunt policy instruments that could result in housing becoming affordable to the many. But the cost would be electoral disaster for Labour. Homeowning turkeys won’t vote for a Christmas of negative equity, and the demographic of younger, priced out renters rarely vote at all. Women: ending ghettoisation Vicky Pryce—Chief Economic Adviser, CEBR and author with Stefan Stern of Why Women Need Quotas Achieving gender equality in the workplace and eliminating pay gaps is absolutely essential in enhancing productivity and growth. Corbyn’s policies , though hardly radical, are along the right lines with pay reviews and better education for women key in facilitating entry into the right professions and reducing the “ghettoisation” of women in low pay activities. Corbyn’s idea of eventual free childcare, also a Lib Dem manifesto pledge, though costly in the short term will have major impact in redressing balance between work and welfare and will more than pay its way as women earn and pay taxes. The target of having 50 per cent women Labour MPs and cabinet members is a no-brainer but true equality in pay and opportunities needs proper quotas at senior levels to achieve change in culture so that women can perform to their full potential. The politics: less than the sum of its parts Jonathan Todd—Deputy Editor of Labour Uncut As Conservative Party leader, William Hague adopted policies that appeared popular. “In Europe but not run by Europe,” for instance, was well received in polls and focus groups. But by making this line central to the 2001 Conservative general election campaign, the party appeared obsessed with an issue, the EU, that was a low priority for many voters. Public ownership is a big Corbyn theme: the railways, energy companies, RBS. While these policies may be popular, perhaps particularly the railways, together they carry a risk of having Labour appear overly statist, especially when research recently published by Jon Cruddas claims that attachment to the big state cost Labour support at the election. These policies may result in Corbyn repeating the Hague error: individually popular policies that sum to an unpopular package. As Hague struggled to have people envisage him as prime minister, Corbyn may be similarly challenged.