An incoming Labour government could overhaul much of the economic system—and do so fairly quickly
SHORTLY BEFORE the financial crisis of 2008, a little-known Labour MP published a 64-page pamphlet. In “Another World is Possible: A Manifesto for 21st Century Socialism”, John McDonnell laid out an economic vision which clashed with the slick, pro-business mantra of Tony Blair’s New Labour. It praised participatory democracy in Venezuela and hailed co-ops in the Basque country, while calling for the sweeping nationalisation of industry.
In 2017 a partner at Goldman Sachs remarked, echoing the French President Emmanuel Macron’s quip over his predecessor’s 2012 campaign pledge to set a top income-tax rate of 75%, that Britain under Mr Corbyn would be like “Cuba without the sun.” Mr Corbyn then had a public battle with Morgan Stanley, after the investment bank warned of the dangers of a Labour government. Yet some in the financial establishment have started to look more favourably on the prospect, for two reasons.
Some of this could be for political gain; an attempt to convince the British public that it meant business. Labour could quickly launch pilot schemes on the pros and cons of adopting a “universal basic income”. One Labour policy wonk impishly suggests the incoming government could follow the example of the Bolsheviks in 1917 and immediately publish highly sensitive documents relating to previous governments—perhaps those related to the Iraq war or the Troubles in Northern Ireland.
The act also leaves the door open for more permanent changes. The bank must target “price stability”. Adding a target of 3% productivity growth does not appear to flatly contradict that requirement, especially as the next bit of the act states that the bank must “support the economic policy of Her Majesty’s Government, including its objectives for growth and employment”.
With a big financial sector in Edinburgh, and a large oil-and-gas industry in the North Sea, the SNP might blanch at any plans to curb banker bonuses or to make life more difficult for carbon-intensive firms. Yet the party has drifted left in recent years, shedding their reputation as “Tartan Tories”. The SNP is hoping to start its own version of a national investment bank north of the border; it has also raised income-tax rates and its water supply is already in public hands.
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