Corbyn’s “fantasy land”? A (brief) analysis of the Labour Party’s 2017 manifesto.
As the snap general election draws ever closer the Labour Party has unveiled its manifesto. Previously leaked, the official document has immediately been framed as a policy platform “dragging Britain back to the 1970’s”, with Theresa May citing the plans as ‘nonsensical economics’. Comparisons have also been made with Labour’s 1983 manifesto, with some commentators claiming the manifesto represents “the new suicide note”. However, after closer examination such attacks appear highly misleading. In fact, the 2017 manifesto contains a range of policies that would be considered mainstream and common sense in many European countries.
Labour’s economic proposals signal a return to the post-war Keynesian consensus, and represent a clear break with Thatcherite economics. The Party has outlined plans to reverse the Conservative 1993 Railways Act, and eventually bring the railways back under state control once each privatised franchise expires. This policy is far from radical, with rail nationalisation commonplace in Germany, France, Norway, Spain and Switzerland. Somewhat ironically, the main obstacle to re-nationalisation is EU law, which promotes the need to open up markets for cross-border competition. However, with Britain leaving the EU Labour would be free to implement the policy. Furthermore, rail re-nationalisation is a popular policy with the British public, with a 2015 You Gov poll showing 58% support, with just 17% opposing re-nationalisation.
Labour plans to invest £250bn in infrastructure over a period of 10 years. This policy has been met with outcry and widespread fear that the Party would further increase the national debt. However, this plan makes perfect sense economically. With interest rates historically low, even the IMF has recognised the need for countries to borrow to invest in infrastructure. This investment will help address the historic under spending on infrastructure, whilst stimulating growth, increase productivity and raise living standards. These plans are more Keynesian, than the Marxist label being applied by some commentators.
A further policy area of contention is that of corporation tax, which currently stands at 19% and is set fall to around 17% if the Conservatives form the next government. The outgoing Conservative administration cut the level from 26%, citing the level as damaging to business interests. Labour plans to increase the level of tax back to 26%. The opposition to such an increase has been quick to materialise, with fears that businesses will relocate to countries with lower taxation levels, move their money offshore and decrease investment. These are clearly all risks a potential Labour government would face. However, even if Labour were to reverse back to 26%, the UK would still have the lowest rate in the G7. The manifesto also outlined an increase in tax for the top 5% of earners, and a top rate of 50% for those earning over £123,000. Such a policy represents the first time a party has explicitly gone into an election with a clear promise to raise tax since 1992. However, the top rate of tax would still remain below that of 60% imposed from 1979–88 under the Thatcher government. In addition, Labour plans to provide free childcare for all one-year olds. This is a clear move towards a system currently seen in Nordic countries. Indeed, Finland offers a universal right to childcare for all children from nine-months to school starting age.
Since New Labour’s decade of public service investment, the UK has seen a decade of expenditure cuts and austerity politics. Living standards are in decline, productivity is dismal, real incomes are falling, inequality is rising there has been an increase in low-paid and insecure work. The economy is still over-dependent on the financial sector and there has been barely any economic growth despite continued stimulus from the Bank of England. Despite labels of economic illiteracy, the 2017 manifesto, although far from perfect, offers a break from the neoliberal consensus and provides common sense and mainstream policy proposals. Furthermore, comparisons with the 1983 manifesto are ill considered. The 1983 document was far more radical and contained plans to cancel Trident and abolish the House of Lords. However, the manifesto also contained policies such as strengthening women’s rights, tackling racial discrimination and cutting pollution, all of which are commonplace in 2017.
Labour’s 128-page manifesto contains a plethora of popular policy proposals, but with a marmite leader and dire electoral polling, the document will most likely continue to be derided as a wish-lish for a future “fantasy land”. Yes, popular policies do not win elections alone, and there is no escaping the current Conservative polling hegemony on leadership and economic credibility, but it may just be the case that the “radical” ideas sewn in the 2017 document have a prolonged political afterlife whatever the result on the 8th of June.