ESTIMATES inevitably vary over how much Labour’s manifesto, plus the bits not in the manifesto and the glints in the shadow chancellor’s eye, add up to in cash terms. The starting point at least is known.
The country is already in debt to the tune of approaching £1.9trillion. That’s very roughly 90 per cent of GDP; it also equates to about 240 per cent of annual public spending. Since it is the state’s budget that has to cover the debt interest, even if current interest rates are historically low, the prospect of adding fresh ill-considered liabilities in bulk self-evidently means cake today in return for stomach ache tomorrow. The wealth-generating private sector will have to be squeezed yet further, and future state spending curtailed by fresh obligations on a finite pot.
None of this will be revolutionary insight to readers, even if the argument needs to be constantly made on the street and especially to young voters.
What is extraordinary is the upgrade in Labour’s fiscal dodgems compared with the 2017 Labour manifesto, itself lambasted as reckless but which committed to a declared bill only about 60 per cent of today’s manifesto bid. Public sector spending under Corbynomics is now set to be on a scale the Institute for Fiscal Studies describes as ‘colossal’, run through a tax raid it calls ‘simply not credible’.
Perhaps some new ways of expressing the scale of Labour’s blank cheque might help voters picture what is at stake.
Labour’s own figures say they will increase public spending by just shy of £83billion, so let’s take that at face value.
Donald Trump has got some heavy stick for offering to buy Greenland. If the going rate were inflation-adjusted and based on the 1946 proposal, given current exchange rates it would come with a one billion pound price tag.
But the old bid would be a bit low today given a larger economy. Using the revenue method applied to current GDP, a more appropriate offer would be closer to two billion. We also have to accept a rolling hit of another half billion in subsidy – let’s add that in for the first year but otherwise ‘do a Labour’ and move that off the books as an enduring liability. There’ll probably also be a plebiscite to win, so we’ll add the pledge of ‘a skidoo for every household’, for another quarter billion.
So, for around two and three quarter billion pounds, and some referendum magic, Greenland is yours.
Jeremy Corbyn at £83billion could fly around the world offering to buy up small states like Greenland every twelve days. Or throw a counter-offer at the Americans; on the same principle, a Labour Government could save up the money over the year and offer to buy Montana.
That might be too neo-colonial for Corbynistas. Why not kill two birds with one stone, and instead replace excessively militaristic Nelson’s Column with a substitute, topped by Jez’s fave Chilean poet and Stalin Peace Prize winner Pablo Neruda?
Obviously it would need to be in precious metal. Allowing for relative density, at current silver prices, I calculate that’s achievable with approaching £4.2billion in bullion. That means you could build twenty silver Nelson’s Columns commemorating a pantheon of gauchiste beatnik and revolutionary literary heroes that no one has ever heard of.
But Labour’s spending pledges dodge other commitments including the National Transformation Fund, public sector costs from a four-day week and nationalisation costs. Allowing for the spending commitments to kick in over the life of a Parliament, that implies an added cost of a single term of Labour Government of around £850billion that has to be somehow dredged from people’s pockets –averaged out at £170billion a year that would be more than double the declared bill.
So what could £850billion buy you?
Labour might reflect on the Heathrow expansion, costed by its supporters at £14billion. To this we might apply more than a pinch of salt. But allowing for price variations across the country, it might work out as a reasonable ball park guestimate – if your policy intent was simply to blow the minds of Extinction Revolution acolytes by giving a world-class airport to each of the sixty biggest cities and towns in the UK.
Eiffel Tower enthusiasts could yo-yo eight times a day between Paris and Blackpool. Steve Baker could go parachuting from High Wycombe International Airport. Jetsetters could travel the world from Blackburn’s Jack Straw Terminal.
All right, so spending on those sorts of extravagances are absurd. But are they really any less of an ‘investment’ than some of the things that Labour plan to splurge on? At least buying nonsense items like the above mean spending on something that can be sold off – and as one-offs they don’t all provide a lasting spending commitment that then has to be cut at a later stage by a government in debt.
During the the 2017 General Election campaign, Diane Abbott was hidden away after a gaffe-strewn LBC interview. Her figures on how Labour would fund an increase in police numbers in fact turned out to be absolutely correct at market rates . . . if she was talking about cardboard cut-out officers. Labour’s current spending plans prove to be even more two-dimensional.