Chris Leslie, the shadow Chancellor, has launched a scathing attack on “Corbynomics”, the anti-austerity agenda of the Labour leadership candidate Jeremy Corbyn, warning it would hurt poor people the most.
In an interview with The Independent, Mr Leslie issued a wake-up call to Labour members to reject what he called a “starry-eyed, hard left” economic strategy, amid growing signs that Mr Corbyn could pull off a shock victory next month.
Mr Leslie claimed Mr Corbyn’s agenda would result in higher inflation and interest rates, ending in spending cuts which would persuade middle class people to opt out of public services and into private health and education.
The shadow Chancellor rounded on Mr Corbyn’s proposal for “quantitative easing for people instead of banks.” He said: “Printing money and ending Bank of England independence would push up inflation, lending rates, squeeze out money for schools and hospitals and mean spending more on debt servicing. Higher inflation and a higher cost of living would hit those on the lowest incomes, the poorest people who couldn’t afford those goods and services. The very people we should be standing up for would pay the price – the poor and vulnerable.”
Mr Leslie, who is backing Yvette Cooper in Labour’s election, warned that Mr Corbyn’s plan to raise £120bn by tackling tax avoidance and evasion and reduce the £93bn spent on tax reliefs would not materialise, leaving a black hole in the public finances.
“There is nothing left-wing about running a deficit in perpetuity,” Mr Leslie said. “If the state cannot live within its means, and has to be cut back more and more, then taxpayers will lose faith in the public realm, will become more sceptical and cynical, and be more likely to exit and go to private health and private education. Without realising it, you end up eroding the collective case for public services.”
Admitting a Corbyn victory was “plausible,” Mr Leslie said: “You have got to have a credible Labour prime minister who understands this. Otherwise you have a decade or more of Tory rule.”
Mr Corbyn said last month he stood for the leadership “because Labour shouldn’t be swallowing the story that austerity is the anything other than a new façade for the same Tory plans.” He said if the deficit has been cleared by 2020, Labour should not run a deficit on day-to-day spending but should “borrow to invest in our future prosperity.”
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