Labour's economic policy is s*** or bust, says Corbyn ally: Angela Rayner acknowledges that the party's strategy to raise taxes and borrow billions is a 'high-risk' gamble

  • Shadow education secretary Miss Rayner defended Labour's spending plans
  • She said 'great advancements' only came when politicians took a risk
  • Miss Rayner is seen as a rising star and potential future Labour leader

By JASON GROVES, POLITICAL EDITOR

Published: | Updated:

Labour's economic strategy amounts to a 'high risk' gamble, a senior ally of Jeremy Corbyn admitted last night.

Angela Rayner acknowledged that Labour's plan to raise taxes and borrow hundreds of billions to fund a massive spending spree amounted to a 's***-or-bust strategy'.

But she said 'great advancements in the past' had only ever come when politicians had the courage to 'take a risk'.

In a frank interview with The Spectator magazine, the shadow education secretary defended Labour's lavish spending and borrowing plans.

Shadow education secretary Angela Rayner (pictured) has defended Labour’s lavish spending and borrowing plans in a frank interview

Shadow education secretary Angela Rayner (pictured) has defended Labour's lavish spending and borrowing plans in a frank interview

'We are in different times, radical times where we need to have a real investment in Britain's future. Genuinely. I don't mean that as a slogan, I mean it as an economic strategy,' she said. 'It is a bit of a s***-or-bust strategy, I get that. It's a high-risk strategy. But all of Britain's great advancements in the past have been because we've had the gumption to take a risk.'

In comments likely to raise eyebrows on Labour's Left, she also warned the recent focus on ethnic minorities and women's agendas has had a 'negative impact' for white working-class boys.

Tory MPs last night accused Miss Rayner of letting the cat out of the bag over Labour's economic plans. Jacob Rees-Mogg praised her 'refreshing honesty', but said: 'You can delete the expletive – it is simply a bust strategy. It has been tried and tested all over the world and has failed each time.

'All the great advances overseen by governments have come from carefully thought out strategies – Margaret Thatcher's economic reforms were the result of years of preparation, the welfare state took decades of work by Beveridge and others. Of course some plans turn out to fail. But the idea that great economic advancements are ever made by taking a punt is simply wrong.'

Miss Rayner’s comments stand in stark contrast to claims made by Mr Corbyn and shadow chancellor John McDonnell (pictured) during last year's election campaign

Miss Rayner's comments stand in stark contrast to claims made by Mr Corbyn and shadow chancellor John McDonnell (pictured) during last year's election campaign

Miss Rayner's comments stand in stark contrast to claims made by Mr Corbyn and shadow chancellor John McDonnell in the run-up to last year's election.

Mr McDonnell has pledged to borrow up to £500billion to fund a massive spending programme, as well as nationalising utilities and raising taxes on the better off.

He said Labour's manifesto, which proposed almost £50billion of higher taxes was fully costed. But the independent Institute for Fiscal Studies warned the tax proposals would 'not raise anything like' the sums claimed, while the Tories warned that Labour's borrowing plans would cost billions in higher debt interest payments.

After the election, Mr McDonnell admitted that Labour was preparing for a potential run on the pound and flight of capital if it ever seized power.

Miss Rayner is seen as one of Labour's brightest stars and tipped as a future leadership contender. In the wide-ranging interview yesterday, Miss Rayner, who left school without qualifications after becoming pregnant at 16, said there was a 'lag' in achievement by white working-class pupils and that more support was needed to help them make a success of their lives.

'They have not been able to adapt,' she said. 'Culturally, we are not telling them that they need to learn and they need to aspire. They are under the impression that they don't need to push themselves, in the way that disadvantaged groups had to before.' 

A Labour Party spokeswoman said: 'Angela was saying that we have a once in a generation opportunity, with historically low interest rates, to invest in our infrastructure, new technologies and our people, underpinned by our Fiscal Credibility Rule - and that we must take it.

'She was also making the point that Labour has been more transparent about our economic plans than any opposition in history. We published a fully costed manifesto unlike the Tory manifesto, where the only figures were the page numbers. They have continued this practice since the election, for example their £1 billion bribe to the DUP came with no explanation of how they would fund it.'  

£10 wage 'will hand more jobs to robots' 

Before last year’s general election Jeremy Corbyn committed Labour to increasing the minimum wage to £10 an hour

Before last year's general election Jeremy Corbyn committed Labour to increasing the minimum wage to £10 an hour

Labour's plans to raise the minimum wage to £10 an hour could see thousands of workers replaced by robots, a report warns today.

The independent Institute for Fiscal Studies says rapid increases in minimum pay rates could tempt employers in a range of sectors to accelerate plans for automation.

Before last year's general election Jeremy Corbyn committed Labour to increasing the minimum wage to £10 an hour. Today's report warns that rapid increases in the wage are already putting jobs at risk – with Labour's plans likely to worsen the problem.

The minimum wage, which was £6.70 an hour in 2015, is already on course to top £8.50 an hour by 2020. This would see the proportion of adult workers on it treble from 4 per cent to 12 per cent over the same period.

Report author Agnes Norris Keiller said the existing wage mainly covered jobs such as care workers and waiters which are 'not readily done by machines'. Raising the rate rapidly means it will affect more occupations, including jobs such as retail cashiers and receptionists which may be 'easier to automate'.

She added: 'The fact that there seemed to be a negligible employment impact of a minimum at £6.70 per hour, the 2015 rate, does not mean the same will be true of the rate of over £8.50 per hour that is set to apply in 2020.'

Advertisement
LabourJeremy Corbyn

Most watched News videos