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Business should give Corbynomics a hearing

Terry MurdenHe wants to freeze rates for small businesses, clamp down on corporate tax avoidance and invest in skilled workers. Are these David Cameron’s plans for boosting productivity and tackling tax dodgers? Actually, they are promises made by the ‘enemy’ of business, Jeremy Corbyn.

Just a week into his tenure as Labour leader and the public has been warned that he would bring the country to its knees should he ever get the keys to Number 10. There are more headlines today telling us that, in such an eventuality, a number of entrepreneurs would leave Britain.

Yet closer scrutiny reveals that Mr Corbyn’s business agenda is less hostile towards the country’s wealth creators than his detractors would have us believe.

Tackling tax avoiders? Isn’t that part of George Osborne’s programme at the Treasury?

Investing in skilled workers? That also forms part of the Tory government’s new focus on improving productivity.

Mr Corbyn’s “Better Business” plan is not so much an attempt to asset strip Britain’s boardrooms as a promise to “level the playing field” between small and big business.

He also wants to create the conditions that would allow business to grow: mainly by ensuring Britain has the infrastructure that business needs.

Speaking before his wide-margin victory, he said: “Britain’s businesses complain that Britain suffers from a lack of investment in our energy, transport and digital infrastructure. Yet the government continues to cut public investment. I want a National Investment Bank to fund the infrastructure we need,” he said.

A national investment bank? Like the one proposed by the progressive think tank the Institute for Public Policy Research in 2012? Or by Lord Mandelson, from Labour’s Blairite wing?

So, not such a loony-left idea then?

Mr Corbyn has attracted all sorts of unkind sobriquets since his election, but the one that raises many eyebrows is Corbynomics. Tap the word into Google and it yields 267,000 results – up by 100,000 in just two weeks. What is it?

Interest has been spurred by the concept of PQE – people’s quantitative easing – as proposed by the tax and economics commentator Richard Murphy, the architect of Corbynomics.

Essentially, it says the Bank of England should purchase bonds from a national investment bank with the capital raised being invested in large scale housing, energy, transport and digital projects.

Critics have pointed to its inflationary effects, although many in business want to see the Bank of England take action to restore inflation to nearer the 2% target.

So, what has given rise to Corbynism and the reemergence of the left?

Labour was left severely bruised by its election rout and faced the choice forging a new alliance with others in the centre ground – as Lib-Dem and former Labour member Sir Vince Cable now espouses – or reverting to its left wing roots. It chose the latter and, in the process, has opened up a new battle line in British politics.

East Coast Main LineMr Corbyn has been labelled a throwback to the Labour party of Michael Foot, Chris Mullin and Tony Benn and has been caricatured for proposing what are seen as outdated ideas. Renationalising the railways and energy companies conjures up images of scruffy, unpunctual trains and grossly under-funded energy infrastructure. Bringing the rail network into state control looks at odds with today’s revelation that the boss of HS1 says Network Rail should not rule out privatisation of the infrastructure company. Corbynites will remind us that under state control the East Coast Main Line (left) was profitable and that the only beneficiaries of privatising Britain’s energy companies have been the foreign companies that now own most of it.

British politics has never been so plural, from Green to Tory Blue, and the SNP’s triumph in May added further colour to the mix. Mr Corbyn’s red tinge is largely a result of dissatisfaction within Labour itself. Ed Miliband’s brand of Tory-lite policies and unconvincing loyalties to the underprivileged were never going to distinguish the party from a Cameron-Osborne Tory party that had also stolen many of its ideas, such as the living wage. Mr Corbyn’s election is the manifestation of his party’s decision to reconnect with those it claims to represent but has forgotten how to do so.

Rather than dismiss the new Labour leader as a wrecking ball ready to swing into action, his Corbynomics needs to be taken seriously. It is borne out of the 2008 crash that exposed the weaknesses in the current economic policies of the west and gave vent to new ideas. There are echoes of Clement Attlee’s rise to power with a radical left wing agenda in 1945 when Britons sought a new start. Attlee and his polar opposite Margaret Thatcher were arguably the most influential prime ministers of the 20th century. They took a different view of how they wanted Britain to be, but each of them changed it in ways that continue to affect us all.

Mr Corbyn’s “new ideas” have their roots more firmly in the past. Adam Smith, no less, referred to the state’s responsibility for the “erection and maintenance” of those “public works and institutions” that, while of great advantage to society, would not profit private enterprise. In other words, the state should always be an active investor in the nation’s basic structures.

Mr Corbyn is offering an alternative to the more recent system which failed us when the banks crashed, personal debt rocketed and food banks proliferated.

We will only find out if Corbynomics can lead us on a better path by listening to what he says rather than shouting him down before he can be heard.

 

 

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