John McDonnell unveils spending plans on a scale ‘never seen before in this country’ as respected IFS think tank says Labour’s £400billion spree would be IMPOSSIBLE because there are not enough workers in the UK
- Shadow chancellor John McDonnell setting out Labour’s economic plans today
- He unveiled new proposals for a five-year £150bn Social Transformation Fund
- He also set out Labour plans for 10-year £250bn Green Transformation Fund
- Mr McDonnell said proposals ‘mean investment on a scale never seen before’
- IFS today said it would be ‘physically impossible’ to spend such sums so quickly
Paul Johnson, director of the Institute for Fiscal Studies, said it would be ‘physically impossible’ to spend £400bn so quickly
John McDonnell today unveiled plans to spend £400 billion on transforming the UK over the next decade as the boss of a leading think tank said the proposals would be ‘physically impossible’ to implement.
The shadow chancellor pledged to splash the cash ‘on a scale never seen before in this country’ as he delivered an election speech in Liverpool.
But Paul Johnson, the director of the Institute for Fiscal Studies, said the ‘absolutely enormous increase’ in public spending would likely stall because there simply would not be enough workers available to upgrade schools, hospitals and council houses.
Mr McDonnell set out Labour’s economic blueprint for Britain with an announcement of a proposed five-year £150 billion Social Transformation Fund.
That cash would be spent to ‘repair the damage done to the infrastructure of the country by years of austerity and neglect’.
Labour has previously announced a separate 10-year £250 billion Green Transformation Fund, with that money used to ‘transition to a sustainable economy, energy and transport in particular’.
But Mr Johnson poured cold water on the proposals this morning as he questioned how Labour could spend so much cash so quickly.
He told BBC Radio 4’s Today programme: ‘The real question, in the short run, is would it be possible sensibly to spend this scale of money?
‘Moving to a world in which you’re doubling [spending] within a year or two, I would suspect, is actually just physically impossible to get there that quickly.
‘Do we really have tens, if not hundreds, of thousands of construction workers, lying idle at the moment, who would be able next week or next year or even in a couple of years to start doing this? I think the answer is almost certainly no.’
John McDonnell today pledged ‘investment on a scale never seen before in this country’ as he set out Labour’s economic plans in a speech in Liverpool
Mr McDonnell was joined in the city by Jeremy Corbyn who predicted his long time political ally would be a ‘historic chancellor of the exchequer’
Mr Johnson said it ‘obviously takes a long time to go through the planning and sorting out things’ when it comes to major public spending projects.
‘If anyone’s ever had to sort out an extension to the house or something, they know that getting the building started isn’t something that happens next week,’ he said.
‘If you’re talking about hundreds of hospitals and wind farms or whatever else you’re doing, you need to do this gradually.’
Mr McDonnell used his speech in his home city of Liverpool to promise that if Labour win the election on December 12, he will unleash unprecedented public spending.
He outlined plans to ‘put power into the hands of communities’ with a pledge to make investment decisions less focused on London and the home counties under a Jeremy Corbyn-led government.
Leader Mr Corbyn and Mr McDonnell also used their trip to the North West to unveil Labour’s campaign bus emblazoned with the election message: ‘It’s time for real change.’
Mr Corbyn plans to host a rally in Manchester in the evening and will travel on the bus as the party targets ‘dozens’ of marginal constituencies in the coming five weeks.
Mr McDonnell told supporters this morning that he wants to bring about ‘an irreversible shift in the balance of power and wealth in favour of working people’.
He added: ‘That means change which means investment on a scale never seen before in this country and certainly never seen before in the North and outside of London and the South East.’
He also committed to holding ministerial meetings outside of Westminster if he secures the keys to Number 11 at the general election.
Meanwhile, Labour’s proposed spending plans would be overseen by a Treasury team that is to be based in the North.
Mr McDonnell told Labour activists: ‘Power is coming home, back to the people.
‘We can only deliver the real change we need by putting power into the hands of communities, of the people who know their local area best.’
On his plans to shift the ‘powerful section’ of the Treasury to an undeclared part of the North, he said: ‘But it’s not just about spending more, it’s about how it’s spent, with decision-making devolved down to local communities.
The shadow chancellor pledged to deliver ‘an irreversible shift in the balance of power and wealth in favour of working people’ if Labour win power on December 12
Jeremy Corbyn and Mr McDonnell also launched Labour’s election campaign battle bus today
Mr McDonnell claimed Boris Johnson’s Brexit plans would ‘smash a hole in our public finances’. The Prime Minister is pictured on the campaign trail in Stockton-on-Tees at the Tetley Tea factory today
‘Labour’s Treasury ministers will meet outside of London and will have a ministerial office in the North. The centre of gravity, of political gravity, is shifting away from London.’
Mr McDonnell also launched a stinging attack on the Tories as he said the choice for voters on December 12 ‘isn’t just clear, it’s historic’.
He said: ‘On one hand, the Tories, the very people who have just inflicted nearly a decade of harsh, brutal and unnecessary austerity cuts on our community, the people who starved our NHS, cut school budgets and sacked police officers are all of a sudden gushing with election stunt offers of spending more. They take us all for fools.
‘Judge them on their record and their actions, not on their election gimmick false promises. You can’t trust a word they say. You know that if they get back we all risk five more years of cuts, falling wages, Trump trade deals and a rising state pension age.
‘On the other hand, we have the chance of real change. A decade spent rebuilding our society and saving our planet for our children and grandchildren. Building the homes we need. Investing to create the well-paid jobs, secure with the restoration of trade union rights. Creating clean green energy and transport networks.’
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