Shadow Chancellor Chris Leslie slams “Corbynomics”

Labour’s Shadow Chancellor Chris Leslie has warned against the economic proposals of leadership candidate Jeremy Corbyn, describing them in The Independent as “starry-eyed, hard left” policies. Leslie’s criticism appears to be around the announcements Corbyn made in a speech last month – specifically his support for “people’s quantitative easing”.

Leslie, who is supporting Yvette Cooper in the leadership contest, said:

“Printing money and ending Bank of England independence would push up inflation, lending rates, squeeze out money for schools and hospitals and mean spending more on debt servicing. Higher inflation and a higher cost of living would hit those on the lowest incomes, the poorest people who couldn’t afford those goods and services. The very people we should be standing up for would pay the price – the poor and vulnerable.”

Following up his comments with an article on the Staggers today, Leslie accepts the “superficial appeal” of the “hard left”, saying “big bold rhetoric presents a ‘clear choice’ to motivate the currently unenthused”. But he goes further with his critique of Corbyn’s position, and argues that “ending the Bank of England’s independence and reversing one of Labour’s most enduringly successful reforms would risk a major hike in lending rates, taking money away from schools and hospitals”.

Again, he is particularly scathing of the “people’s quantitative easing” policy:

“You can’t magically abolish the deficit with printed money and expect zero repercussions for the least well-off and those already struggling with loans and debts.”

However, Corbyn supporters have hit back at the arguments. Richard Murphy, a tax researcher who introduced Corbyn at his economy speech recently, and whose blogging on the subject formed the basis for Corbyn’s people’s QE proposal, this morning responded to Leslie’s attack.

Writing on his website, Murphy described Leslie’s analysis as “absurd”, and says that “people’s quantitative easing does not require an end to Bank of England independence”. He also implies that the Shadow Chancellor is not being honest about the issue:

“If I am charitable, it is very clear that Chris Leslie has never bothered to acquaint himself with what people’s quantitative easing is about. If am more candid, I think is wholly misrepresenting the truth on the issue.”