Labour's big bet on economic growth
Labour has been busy setting out its plans for the economy, and its pitch to potential voters, of no new income or wealth taxes. Instead, the essential improvements to public services will all be paid for through economic growth. But are the proposed policies to deliver this growth coherent? This prompts two questions: where will the growth come from, and where will the money come from to underpin the investment to deliver that economic growth? Labour is betting on a couple of things – housebuilding, including building on the green belt; and “green” investment and net zero for the power sector by 2030! Even the Conservatives’ ambition of 2035 is extremely tight. These policies will be against a very different economic background to that of the past 30 years of very low interest rates. With the current interest rate at 5%, the costs are much higher, presenting a whole new ballpark. Moreover, it is not at all clear where the money is going to come from for all the investment needed. This podcast looks at the reality behind Labour’s proposals