Following Jeremy Corbyn’s well received speech at the Labour party conference, one wonders if his Socialist approach to the economy is the ‘damaging, debilitating’ prospect the Conservatives make out. Corbyn pledges £312 billion of borrowing if he is to become Prime Minister. The Conservative’s ‘fiscal conservatism’ approach, a like-for-like policy from Thatcher, Blair and Cameron’s governments has failed to kick start the economy as promised. Economic policy has become tiresome rhetoric with unacceptable consequences. Would Corbyn’s approach bankrupt the country or is it time to change policy?
A ‘strong and stable economy’ is the only way to ensure the British people can safeguard existing jobs and services, according to the Conservatives. ‘Strong and stable’ necessitates low taxes and the deregulation of businesses which, in theory, should increase investment and thus lead to growth in the economy. This policy of fiscal conservatism has been implemented with the intention of reducing the budget deficit. Supposedly this wealth trickles down to the poorest in society as low taxes are a benefit for all, hence promoting better standards of living and improvements in public services.
Corbyn’s policy of increased borrowing, additional business regulation and nationalisation is commonly criticised for risking jobs, discouraging investment and limiting economic growth. Yet since the Conservatives have been in government, NHS waiting lists have climbed to the highest levels in a decade with services under increasing strain. The 1% pay cap on public services means teachers are leaving education, police numbers are falling and austerity has cut public services by up to 20% in every region. Economic growth is compromised by diminishing education standards, increasing crime, poor health and inadequate housing stock.
Statistics suggest that the inequality gap has widened, the number of children living in relative poverty has increased and the number of people dependent on food banks is accelerating month on month. Young people are increasingly worried about monetary issues; the NUS found that 47% of graduates still live with their parents as rent payments are becoming beyond most people’s reach and becoming a homeowner is near impossible with £30,000+ of debt and house prices rising much faster than wages. Clearly, this current economic approach is failing. The government is borrowing more money than any other government in history and cuts will continue for the foreseeable future. ‘Strong and stable’ would not be a mantra which reflects the fortunes of the current government.
Critics claim that if Labour is allowed to borrow on the scale they intend to, future generations will be the ones taking the brunt of the damage. This is an unsound argument.
The UK owes £1.83 trillion of national government debt. Paying this off will take thousands of years at current levels so, in effect, future generations are already responsible for the debt. Borrowing does not have to equal retrenchment; Britain is the 5th largest economy in the world yet we have carried debt since William the 3rd ruled England. To put into context the scale of borrowing that Corbyn anticipates; it is the equivalent of adding £3 to a £2 million debt in an attempt to kick-start the economy intoworking for as many citizens as possible.
Whether one agrees with Corbyn’s economic rationale and vision for a fairer society or not, it is surely worth the risk of changing the economic narrative. Relatively, Corbyn’s level of borrowing is a ‘drop in the ocean’. Given that economic growth is bordering on stagnant ‘Corbynism’ may be just the change this country needs.