Is Labour's manifesto credible? An independent analyst looks at Corbyn's costings

22 November 2019, 08:28

Labour have unveiled plans for the biggest spending spree in peacetime history. But is it credible? LBC asks an independent analyst to look over Jeremy Corbyn's manifesto.

The Labour leader's plan includes scrapping tuition fees, big pay rises for the public sector and the nationalisation a number of utilities including trains and broadband.

The Financial Times warned it is "a recipe for decline and would wreck the UK economy". So what is the truth? Nick Ferrari asked Paul Johnson, director of the Institute for Fiscal Studies, who offer independent, objective analysis of party manifestos.

And speaking on LBC, Mr Johnson said the Labour plan is risky.

He said: "It's certainly a huge and radical plan. The scale of increased spending would take government spending in the UK to its highest peacetime level. The scale of tax rises if implemented would take tax to its highest peacetime level.

"There are also significant nationalisation plans. And they have maintained their plan to take 10% of the value of big listed companies and take those effectively into public ownership and give some of the returns to workers.

"So this is a vast manifesto.

The IFS labelled Jeremy Corbyn&squot;s plan as "a risk"
The IFS labelled Jeremy Corbyn's plan as "a risk". Picture: PA

"If you wanted to get the British state and taxation to that level over a 10-year period, it would take you to a level which is not unusual in Scandinavia and parts of Western Europe including France and Germany. And there is a case for the state to do more, to provide more free higher education, free childcare and better investment.

"But you need to do that gradually and you need to do that over time.

"And if you do want to do that, I don't think you can pretend that you're going to pay for half of it from higher taxes just on rich people and companies.

"If you look at any of those other countries which have higher levels of spending, they also have higher levels of tax on people on average earnings.

"It certainly risky trying to increase corporation tax to its highest level pretty much in the world. You then put some risk over whether companies continue to invest here."

Nick asked in to sum up the manifesto and Mr Johnson said: "It's certainly takes a lot of risks with the UK economy. As indeed on the other side does the hard Brexit that the Prime Minister is pursuing.

"I think we're in the rather unusual position of having two very risky propositions being put forward in terms of their impact on the economy."