JEREMY Corbyn’s landslide election victory as Labour’s new leader – where he secured almost 60% of the vote – has entirely predictably, generated a raft of reactions from the UK business community.
While the CBI has slammed what has been dubbed “people’s QE” whereby the Bank of England would be compelled to print money to fund infrastructure spending, both the Royal Institution of Chartered Surveyors and the British Chamber of Commerce welcomed the proposal.
Born in May 1949, he attended Grammar School in Shropshire, and became MP for Islington North in 1983. He’s held onto the same seat ever since, romping home to victory in the most recent election with a 21,000-vote majority. He has rebelled against the party whip over 500 times since 2001 and voted against the Iraq war, ID cards and upping tuition fees. Corbyn chairs the Stop the War Coalition and was criticised for inviting republican Sinn Fein leader Gerry Adams to Parliament in the 1980s.
Jeremy Blackburn, RICS head of policy said: “He has raised some challenging but principled issues around the expansion of Right to Buy to private landlords; as well as providing a voice for the widely-felt dissatisfaction of privatisation in our rail sector. There is undoubtedly opportunity in his agenda around infrastructure and public spending to get Britain building, and we look forward to sitting round the table and discussing this further.”
The IoD, however, has blasted the idea of renationalising the railways or ramping up business taxes as being detrimental to the economy.
And John Cridland, the CBI director general of the independent employers’ organisation, speaking on BBC Radio 4’s Today programme, stressed that despite his support for the notion that there was a compelling need for immediate capital investment, Corbyn’s economic plans, especially his version of QE is flawed.
“QE is something that you do in an emergency. What we’ve got now is an economy which is soundly based, a recovery which is long-term. It’s organic growth, and that will produce the capital spending that the country does urgently need,” said Cridland.
Meanwhile, Angela Eagle who narrowly lost out in the deputy leadership contest to Tom Watson, has been appointed shadow Business Secretary and First Secretary of State, meaning she will stand in for Corbyn at Prime Minister’s Questions whenever required.
A three time member of the influential Public Accounts Committee in the mid-90’s and twice in the Noughties, the MP for Wallasey has recently held the shadow chief secretary to the Treasury and shadow minister (Treasury) posts.
She worked in the CBI’s economic directorate in the 1980’s shortly after graduating from St John’s Oxford, the same college as Tony Blair.
Behind the scenes, the architect of Corbyn’s economic QE plan is former KPMG accountant and founder of the Tax Justice Network, Richard Murphy.
In his Tax Research UK blog, Murphy outlines how the government’s existing programme should be extended and that a new QE tranche of up to £50bn a year be created during the first years of the new parliament in order to “provide the funding to build the infrastructure that will be our legacy to our children”.
“We suggest that this new programme should buy the new debt that will be issued in the form of bonds by the Green Investment Bank to fund sustainable energy, local authorities to pay for new houses, NHS trusts to build new hospitals and education authorities to build schools.
“This QE programme could do this just as readily as the previous programme bought central government bonds. And the result would be, in exactly the same way as government bonds were effectively cancelled by the previous QE programme the moment that they were bought by the Bank of England, that these new bonds would also effectively be cancelled as each of the bodies issuing them is part of government, and the government cannot owe itself money, as previously noted.”
But former shadow chancellor Chris Leslie, replaced by John McDonnell, has dubbed the “starry-eyed, hard left” economic policies of Corbyn as likely to ramp up inflation, harm the most vulnerable in society and gift the Conservatives a further ten years in power.
On Europe, the Islington North MP has remained ambiguously non-committal, repeatedly saying that the UK should “stay to fight together for a better Europe”.
McDonnell, the new shadow chancellor and firebrand leftist, who called for Robin Hood tax on financial transactions, has said that the refreshed Labour Party can redress the deficit by ending tax cuts to the wealthiest tier of society, ensure big business pays its taxes, and by kick starting a major house-building and infrastructure programme to boost the economy and create more jobs.
Last month he told the Observer newspaper that “a future Corbyn-led Labour government will reserve the right to bring them back into public ownership with either no compensation or with any undervaluation deducted from any compensation for renationalisation.”
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