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Wednesday, 6 November 2019

Aspiring British finance ministers trade blows over future of the economy

November 7, 2019

By William James

LONDON (Reuters) – British finance minister Sajid Javid will try to convince voters on Thursday that only the governing Conservative Party can be trusted with the future of the economy, painting the opposition Labour Party as fiscally irresponsible.

Javid’s speech will coincide with one from his opposite number, Labour’s would-be finance minister John McDonnell, who will accuse the Conservatives of ripping the social fabric of the country by underinvesting in schools, hospitals and homes.

The fight over the future of the world’s fifth largest economy is likely to dominate the second day of official campaigning ahead of an unpredictable Dec. 12 general election designed to end years of deadlock over Brexit.

Both Javid and McDonnell will travel to the north of the country to make their pitches, eyeing seats in parts of the country where many voters feel they have been squeezed by investment cuts and decades of deindustrialization.

Javid’s pitch is a familiar one for British voters.

“We can’t let Labour turn back the clock, let spending get out of control and make hardworking families pay the price … Look to the lessons of history – they’ll ruin our finances, raise your taxes and saddle the next generation with debt,” he will say according to advance extracts.

The Conservatives have fought and won previous elections by trading heavily on a reputation for economic competence and casting Labour as spendthrift socialists.

Javid has a picture of free-market icon and former prime minister Margaret Thatcher on his office wall. McDonnell once brandished a copy of Communist leader Mao Zedong’s ‘Little Red book’ in parliament and suggested the government heed its advice.

But nine years of public spending cuts to reduce an oversized budget deficit have also taken their toll on voters, with many public services financially stretched and polls suggesting little appetite for more austerity.

With that in mind, both parties are promising to end the era of cuts and undertake huge infrastructure investment programs if they win power on Dec. 12.

On Thursday, McDonnell, who proudly opposes the current model of capitalism and promises to shake up the financial sector if he takes control at the Treasury, will pledge an additional 150 billion pounds ($190 billion) of spending.

“Spent over the first five years of our Labour government, the Social Transformation Fund will begin the urgent task of repairing our social fabric that the Tories have torn apart,” he will say, according to a statement from his office.

The 150 billion is in addition to 250 billion pounds already pledged over the next 10 years, financed by issuing long term bonds and invested in capital projects to stimulate growth and make the economy more environmentally friendly.

“It won’t just be public investment, of course. We can’t do it if the private finance sector isn’t pulling its weight too,” he will say. “The days of the City dictating terms to the rest of the country are over.”

(Editing by Stephen Addison)

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