The Labour Party Has Bought Itself A One-Way Ticket To Oblivion

27/09/2016 14:56
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It was no surprise that Saint Jeremy of Corbyn was re-elected leader of the Labour Party by his faithful worshippers on Saturday.

The electorate in this particular contest have spoken and the Labour Party will continue its journey to the left and political oblivion. Unless, that is, they suddenly wake up to their predicament of having the lowest polling figures of any opposition leader ever, which they seem unlikely or unwilling to do.

I'm with David Blunkett, who described Corbyn's win as "an utter disaster for the country".

To be honest, I stopped supporting Labour when the wrong Miliband won in 2010 and Corbyn's ascent has only validated my decision. What little economic policy offered by him and Shadow Chancellor John McDonnell shows how economically illiterate and ill-prepared for government they are.

More government borrowing and punitive taxation on business and individuals has never and will never increase the growth required to fund their grand social plans.

UK corporation taxes, now at 20%, have been falling steadily since 2013, when they were 23% (and above 30% in the 1990's). Former chancellor George Osborne's plan was that they should drop steadily to 17% in 2020. I don't think it's any coincidence that UK GDP has risen as these taxes have fallen.

Corbyn told Andrew Marr on Sunday that he was minded to keep the tax at 20% or "not much higher", raising the possibility that not only would he depart from the plan to reduce it to 17% he may even crank it up. Despite his claims to be espousing a different kind of politics, his justification for this move was classically political - he wants to use the revenue to help fund a reduction in university tuition fees.

Don't be fooled. Improving the education of our country's teenagers is a laudable goal but achieving it in this way carries significant risk to our economic health.

At the Labour Conference on Monday, McDonnell clearly nailed his colours to the mast, declaring that "the winds of change are blowing against the free market and in favour of intervention". I've got news for McDonnell - he may well discover that those winds are just the soundtrack to his and Corbyn's political wilderness, as their tax-raising plans aren't backed by any economic experts that I can find.

In fact, back in 2014, when Ed Miliband first mooted the idea of raising corporation taxes, the Centre for Policy Studies worked out that this (together with other proposed tax rises) would lead to a loss of 306,500 jobs over four years. This mirrored the findings of a 2009 study of 85 countries by a group including former World Bank economist Simeon Djankov that firmly linked higher corporation taxes with falls in GDP.

Just as the UK begins to free itself from the shackles of EU regulation and put our post-recession recovery on a firmer footing, why would we risk tying the hands of business leaders who are trying to shape our economic future?

Thankfully, as things stand I will never have to worry about the spectre of lower growth under Corbyn and McDonnell as their chances of being elected to govern are about the same as Accrington Stanley winning the Premier League.

As 72 year-old Neil Kinnock pointed out, it's unlikely he'll ever see another Labour government in his lifetime. My son is 20 and, at this rate, he is unlikely to see a Labour government in his lifetime either.

This is a shame. Brexit is a crucial point in UK history and any democracy relies on having an official opposition that poses a reasonable alternative to Government. Corbyn and McDonnell can only offer a version of student politics - long on fiery outrage but short on costed options.