Title: Labour's manifesto is more Keynesian than Marxist
Labour's manifesto is more Keynesian than Marxist
134 years after his death, Karl Marx's spectre has haunted Britain's election. Challenged by Andrew Marr on whether he was a Marxist, John McDonnell cautiously replied: "I believe there's a lot to learn from reading [Das] Kapital". There is no doubt that McDonnell is the most left-wing shadow chancellor in history. As I reported last year, as recently as 2006, he named "Marx, Lenin and Trotsky" as his "most significant" intellectual influences (Jeremy Corbyn has modestly stated that he has "not read as much of Marx as I should have done").
But though the shadow chancellor can reasonably be labelled a Marxist, Labour's 2017 election manifesto, which was published today, cannot. Its proposals owe more to the post-war Keynesian consensus than they do to the Communist Manifesto. The document promises to renationalise the railways (as private franchises expire), the energy system, the water system and the Royal Mail - a clean break with Thatcherism. But in many European countries it remains the norm for such utilities to be in public hands. Unlike the socialists of the past, Labour is not proposing to nationalise the "commanding heights" of the economy or the top 200 companies, still less abolish private property.
The party has pledged to raise the top rate of income tax to 50 per cent on earnings over £123,000 (and to reduce the 45p threshold from £150,000 to £80,000 - targeting the top 5 per cent of earners). But this remains below the top rate of 60 per cent which endured for nine years of Margaret Thatcher's reign (1979-88). Corporation tax would rise from 19 per cent to 26 per cent, a rate seen as recently as 2011, and far below the US's 39 per cent and France's 33 per cent. The party only promises to "consider" a land value tax.
What of Labour's pledge to invest £250bn in infrastructure? The total, as is rarely noted, is spread across a decade and would be funded by borrowing at the cheap rates the UK has long failed to take advantage of. Annual investment would rise from 2 per cent of GDP (£40bn) to 3 per cent (£65bn) - the level achieved before George Osborne's 2010 spending cuts. Such a programme would help redress Britain's historic underspending on infrastructure, stimulate growth, improve productivity and raise living standards.
Unsurprisingly, as I noted following last week's leak, most of its proposals are popular. A 2015 YouGov poll, for instance, found that 58 per cent support renationalising the railways, water companies and other utilities (with 17 per cent opposed), 61 per cent support increasing the minimum wage to £10 (with 19 per cent opposed) and 52 per cent support increasing the top rate of tax to 60 per cent (with 23 per cent opposed). There is also majority support for policies such as rent controls (59 per cent), abolishing zero-hour contracts (64 per cent) and introducing universal free school meals (53 per cent).
But as Ed Miliband can testify, popular policies don't win elections. Voting intention is rarely determined by individual issues but by the public's collective impression of a party and its leader. Theresa May's elephantine poll lead over Jeremy Corbyn and the Tories' lead on economic management and Brexit gives them a formidable advantage.
Yet though Labour's 128-page manifesto will be dismissed as the new "longest suicide note in history", don't be surprised if it enjoys something of an afterlife. The party's next leader will face pressure to embrace many of its policies (which also include building a million new homes, creating a National Education Service and providing £5bn a year for the NHS and £2.1bn for social care). The Conservatives have already shown themselves adept at magpie politics, borrowing an energy price cap, a higher minimum wage and worker representation on company boards from Labour's 2015 manifesto. After all, as Oscar Wilde observed, "talent borrows, genius steals".