Tax and Fiscal Policy

Labour’s manifesto pledges would add at least £40bn to public spending


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Reaction to Labour's leaked manifesto

Commenting on the Labour Party’s leaked manifesto, Julian Jessop, Chief Economist at the Institute of Economic Affairs, said:

“The Labour Party’s manifesto includes delusional and incoherent economics that would result in economic disaster for this country.

“Enormous tax hikes on business and the so-called ‘rich’ will discourage innovation and investment, harming much-needed economic growth. Interventions such as arbitrarily increasing the national minimum wage will inevitably result in job losses; banning zero-hours contracts altogether will hurt the large number of people who rely on this kind of flexible working; and reintroducing national pay bargaining will reduce labour market flexibility further. Evidently politicians have not learnt that government should be stepping back from wage and price setting, not imposing itself even more.

“Proposals for various renationalisations also suggest that history has taught the Labour Party nothing. By calling for renationalisation of the railways they seem to have blithely ignored Network Rail’s current record, with its awful mismanagement, mounting debt and mammoth cost overruns. The tried and tested pursuit of state control has failed before and will fail again.

“On the spending side, the Labour Party seems to have grown a whole forest of money trees, pledging tens of billions of pounds for the NHS, social care, infrastructure, education, policing and the list goes on. With our ever-growing government debt, it is alarming that Labour intend to increase spending commitments by as much as £40bn a year – and that’s without allowing for any increase in public spending on infrastructure, which could easily double this bill.

“Instead, we should be redoubling our efforts to cut back on spending and encourage investment and economic growth by reducing the tax burden on businesses and individuals. This is essential to get our economy ready for Brexit.”

 

Notes to editors: 
For media enquiries please contact Nerissa Chesterfield, Communications Officer: [email protected] or 020 7799 8920 or 07791 390 268.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties



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