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Corbynomics – what on earth is Jeremy Corbyn’s economic policy?

3rd Aug 15 11:54 am

We chat to tax expert Richard Murphy, the author of Jeremy Corbyn’s economic policy

He’s been trending on Twitter, has become a media darling and been winning in recent polls – Jeremy Corbyn’s Labour leadership bid is gaining some serious clout.

Just today, Twitter is abuzz with the #IfJeremyCorynWins hashtag and everyone’s talking about shadow chancellor Chris Leslie’s claim that Corbyn is “plucking figures out of the air”.

Also, earlier today tax expert Richard Murphy complained on Twitter of no journalist contacting him despite Corbyn crediting him for much of his economic policy.

So what on earth is Corbyn’s economic policy – we chatted to Murphy to find out the Labour leadership candidate’s gameplan for the UK economy:

For those of you who don’t know, Jeremy Corbyn announced his key economic policies two weeks ago. Murphy claims that he understands “Corbynomics” as he discovered that “many [of Corbyn’s economic policies] had been pioneered” on his blog.

Murphy told LondonLovesBusiness.com that Corbyn has three key economic issues he wishes to address:


1. Lack of investment in the UK economy

Murphy told us: “As a matter of fact business is investing at very low levels at present. This is not just in the UK; it is a worldwide issue as large companies hoard cash and pay dividends rather than create new products and services.

“The problem for the UK is exacerbated by the current government cutting investment in an attempt to balance its books. The result is a serious shortfall in UK economic activity – a crisis of labour productivity that is reflected in a wages crisis for many and a lack of current provision to meet future need whether it be in infrastructure, innovation or business capacity.”

“Jeremy wants to address this using what he calls People’s Quantitative Easing, which is a variant on what I have called Green Infrastructure Quantitative Easing. This, in effect, prints new money to pay for new infrastructure. In case anyone thinks this is radical, it is only a variant on what Jean-Claude Juncker is offering for the EU when his €315bn investment plan is linked to the European Central Bank’s €1 trillion quantitative easing programme.”

Murphy admitted that while Corbyn’s policies “may look radical”, in practice “ideas for quantitative easing of this sort have already gone mainstream in Europe”.

“This is precisely because it is realised that without government action, the investment our economy needs to get people back to work in well-paid jobs and paying decent levels of tax will not happen,” he added.


2. Level playing field for business

The second economic priority for Corbyn is to crackdown on “cheating companies”.

“Jeremy Corbyn wants to create a level playing field for business by stopping those who are tax cheating to make sure that all those who are honest, upon whom we depend, have the chance to prosper without being undermined by the cheating companies and people who exist in our economy,” Murphy said.

He went on to say that there can be no “more pro-business policy” than those that already exist in the UK right now.


3. Reduce inequality in the UK

According to Murphy, reducing inequality in the UK is a big priority for Corbyn.

“As the IMF, OECD and others have now conceded, based on deep analysis of economic data, inequality is not just bad for those at the bottom of the earnings and wealth piles, it is simply bad for economies as a whole.

“It encourages speculation and reduces innovation. It reduces growth as a result. And it increases risk because it increases the levels of borrowing in an economy as those with wages too low to make ends meet resort to dangerous levels of borrowing, and we all saw the consequences of that in 2008. 

“This is not an anti-wealth programme: it is a spreading the wealth more widely programme when current tax and social structures do not deliver that. Everyone, barring banks that specialise in speculation, would be better off as a result. And the chance of another crisis would be greatly reduced. This is the economics of responsibility as well as the economics of well-being.

“I believe that these economic policies will work for the UK and all who live in it. I believe, most especially, that they will revive the spirit of enterprise in the UK by creating the level playing field business needs and the infrastructure on which it can build prosperity,” he added.


Can Corbyn make a good Labour leader?

On being asked whether Corbyn will be a good Labour Party leader, Murphy said “it’s for others to decide” but did admit to his “bias”.

“I am not a member of any party and will not be voting. But I do think he’s offering the strongest range of economic policies that any candidate will present, and they are the ones that the UK needs. But I admit to my bias,” he told us.


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