This is a continuation of the blog post Manifesto Watch: Labour – Part 1
Corbyn is definitely trying to appeal to young voters. The most discussed education policy of his is that he will reintroduce maintenance grants and abolish university fees. He probably won’t do a Lib Dem style cop-out either.
There is a strong argument that this gives kids from poorer backgrounds more opportunities, even though this hasn’t been statistically proven. However, there is an argument that free tuition fees are unfair. As those who are better off are more likely to go to University, taxing everyone else for them, including those less well off, is surely regressive and unfair. Studies show that free tuition helps the middle class, but makes the working class worse off.
Furthermore, those who have a degree get most of the benefit out of it. They earn more salary and have better opportunities, so how is it therefore justified that they have most of the benefit, but not most of the cost. Well, with that logic you could say they pay more tax as they earn more and pay it off (This isn’t even the case for all degrees), but ultimately abolishing tuition fees can be argued to be regressive.
Health & Social Care
Now, I don’t know too much about health economics. It’s a module that Southampton University provide, but not one that Exeter do. It would be interesting, but I will talk about what I know. Corbyn has pledged to increase staffing, reduce waiting lists and give the NHS an extra £30bn in funding, as well as ring fence mental health budgets. The problem with the NHS is the management. This seems to be where money is being lost more so than anything else. While there is a shortage of funding, that one can argue should be protected, throwing in more money needs to be done more carefully and the hierarchy really needs a change, otherwise any extra money thrown in is being thrown in efficiently.
Jeremy Corbyn is planning to keep the triple lock pension in place. This is stupid. It is my least favourite policy as it is unfair and unsustainable. Last time I slagged it off, people had a go at me, claiming I said that pensions should be scrapped. I did not say this and am not saying this now. If you live your life believing that you will get a state pension, then it should stay with you. But I am strongly against the triple lock pension policy.
The scheme increases pensions by whichever one of the following is the highest:
- The rate of wage growth
- The rate of price growth
So, if wages and prices only grow at 1% in a year, then pensions grow at 2.5% leaving the elderly much better off than everyone else. This is grossly unfair on society and those in work as they see their wages grow by less than those of pensioners. If wages go up by 1%, but prices go up by 3%, workers are worse off in real (price adjusted) terms, but pensioners see their pensions go up by 3% (offset by the price rise), so are as well off as before and better off than workers. These scenarios are grossly unfair on those in work and are incredibly unsustainable with an ageing population.
A far more suitable solution is a single lock pension which increases with wage growth. This is fair and makes sure that society grows equally and proportionately.
Corbyn is also planning to freeze the pension age. Again, as the country lives longer, the age does need to be moved, otherwise pensions aren’t sustainable. They make up £108bn of social spending (in comparison to £3bn unemployment benefits). This is only pensions and doesn’t include care. If the country gets older, but we keep the pension age the same, they will become more unsustainable. I have accepted, as a young person, that I will not receive any state pension when I am retiring. No major party seems to want to deal with the problem, in order to appease elderly voters.
Mr Corbyn has gone green. He will put a ban on fracking, encourage Nuclear energy, an energy price cap and make 60% of UK energy carbon neutral by 2030.
I am being harsh but fair in this blog, therefore I will praise Mr Corbyn for his carbon neutral promise. Climate change is incredibly dangerous. Thankfully UK politicians accept that it is real. This is both in terms of safety and economics. As sea levels rise thanks to melting sea caps, there is a very high chance that we will lose a lot of land. As someone residing in and around Exeter & Portsmouth generally, it doesn’t look great for me. Therefore, we will all be densely populated and it will cost to rehome many people or adapt builds. The alternatives are that we find a solution to stop flooding, or the more common sense option, we stop climate change. It will cost the world economy over £9 trillion and will cost us up to 2% of GDP by 2050 if we don’t stop it. And to the climate change deniers reading this saying it isn’t real and that I’m being stupid, just press ‘Alt’ + F4.
I am not an expert on fracking or nuclear, but science friends have told me that nuclear is the way forward for cheaper and cleaner energy. I can’t and won’t try to explain the science. I also haven’t researched enough into fracking to be able to talk about that in depth either. However, I will briefly summarize it. The arguments for it are that it can bring jobs and a steady supply of oil and gas that is hard to reach and also allows us to cut our carbon emission in half. The arguments against it are that water environmentally costs a lot to transport, as it is required to frack. Fracking is risky as a drill may not find gas. It can cause small tremors. Activists say that the government should be focusing on other forms of energy which are renewable instead. So, it is up to you to make up your mind on this issue.
I think they have a point against it, and we would be better off in the long run to focus on nuclear and renewables. Point Jeremy.
Corbyn says that he will build over 1 million homes (half of which are for social rent), offer home owners interest free loans for their properties and keep help to buy funding until 2027. He will also ban agency fees for tenants.
There is a housing shortage in Britain. This is due to slow construction growth post-recession, an increase in immigration, people living longer and changing family demographics with more divorces. This is leading to high house prices, which are bad economically. The 1 million homes are an ambitious target, but should help towards dealing with the problem. This will require deregulation as well as a push to get more people into the construction industry. This is easier said than done.
Most loans have interest rates in order to make up for those not being payed back. These will most likely require a guarantee such as a possession or temporarily giving the house to the bank.
While banning agency fees may seem convenient, they probably won’t because it will just lead to an increase in rent for tenants as agents look to be reimbursed.
Labour’s stance on migration is one that is, in my mind, positive. Unlike the conservatives, they are not promising to get it into the tens of thousands. Nobody has tried to put forward the positive case for immigrants. I previously have. They will also take international students out of migration statistics. That is sensible as education is one of our biggest exports. Students also leave after education, or even better, stay as they are trained. They don’t have the negative effects that the mail and the express like to claim. Targets haven’t previously been met, so having them is just populist rhetoric and it is certainly a breath of fresh air to not want to scapegoat.
This is the single issue in a single issue election that labour haven’t talked about. I previously predicted this. The manifesto does lay out a Brexit plan of sorts. For many people, this will be the big issue and one that Corbyn needs to work on getting a message out for.
Firstly he says he will accept the result of the referendum and build a close new relationship with the EU. This is safe as he won’t lose leavers and re-leavers (remainers who accept we should leave). He will prioritize jobs, workers’ rights and rights of EU nationals. These are staple. They are just words that don’t say much. Generic policies from both parties without saying how they will achieve them. The same can be said about him giving a greater role to parliament. There is no mention of a leaving fee. He has also said that he would not support no deal. This does make him seem weaker in negotiations as he will settle for a bad deal and won’t play the Theresa May call my bluff game.
He will also keep EU laws on workers, equality, consumer rights and environmental protection. These will be standard for any firm who wants to export to Europe anyway. Changing these laws would’ve taken time anyway, so again, nothing too overwhelming.
He will keep part of research and science projects. These are vital to our world beating education system and our economy. So this is a sensible move from him. He also says he won’t allow Brexit to allow food prices to be undercut, leaving british food worse off. This sounds like he will commit to standard tarrifs for the rest of the world. This will happen anyway as a member of the WTO with WTO rules. So again, while Corbyn is saying lots of things in his manifesto, somehow he is saying an awful lot of nothing.
The point of this series of posts is not to tell you who to vote, or the definite impact of policies, but to inform you of policies and get an understanding of the critical thinking that economics requires. I hope that as you’ve read these posts you have gained a better understanding of the Labour Party and their policies. I also hope you have learnt more about the economics and the economist mindset. I truly hope that you have come up with thoughts and ideas that I haven’t written as that is truly the point of this blog.
I am not talking about some areas of the manifesto because, well they aren’t as economics based. I am not writing about foreign policy or transport or families and communities. This series can’t cover everything a party would bring as you elect them. It doesn’t cover certain policy areas and it definitely can’t cover a style of leadership or anything close to that. If you think this blog is enough to help you, then ok, but there is much more out there which is well worth reading.
ELECTION WEEK PLAN:
Labour Part 1 2/6 (Workers, Brexit, Tax)
Conservative Part 1 3/6 (Business, Brexit, Tax, Social Care)
Labour Part 2 4/6 (Education, Environment, Social Care, Brexit, Migration, Energy, Housing)
Conservative Part 2 5/6 (Education, Health, Pensions, Immigration, Energy & Environment, Housing Transport )
Lib Dem 6/6 (TBC)
Generic Endorsement post 8/6 (TBC)