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Jeremy Corbyn says 'cost being worked out' for Labour's proposed investment bank

Published 28/09/2016

Jeremy Corbyn said investment would reduce borrowing in the long term
Jeremy Corbyn said investment would reduce borrowing in the long term

Jeremy Corbyn says the cost of increased debt from Labour's proposed national investment bank "is being worked out" as he refused to give a firm figure.

The Labour leader defended the additional costs associated with the party's flagship economic policy.

Shadow chancellor John McDonnell has set out plans to borrow £100 billion to support industry, as Labour pledged to be an "interventionist" government when it comes to the economy.

But this borrowing would increase the national debt, as well as needing huge sums to service it.

Britain currently spends around £43 billion a year serving the national debt, which the Tories have committed to cutting.

Mr Corbyn told BBC Radio 4's Today programme "the exact cost is being worked out" of this extra borrowing.

He added: "This is going to increase debt to some extent, but the return in investment on infrastructure, investment in housing, both creates jobs which gives you a higher tax income and gives you the platform for economic growth in the future.

"At the moment the interest rates are extremely low on government bonds, so it would not be expensive.

"The return would be enormous, because you'd be investing in the infrastructure we need and the growing economy that would come back from it.

"When you're looking at bond rates at very, very low levels, the cost is not great compared to the return.

"It's a far better way of funding public investment than private finance initiatives."

Labour repeatedly performs badly in polls around its economic competence.

But when challenged on this, Mr Corbyn said it was "wrong" to have that perception of the party's proposed national investment bank.

"The way to address that is investment, which reduces borrowing in the longer term," said Mr Corbyn.

He added that the policy would be looked at if interest rates rose from their current historically low levels.

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