Belfast Telegraph

Corbynomics not as unpopular as Right likes to think

Jeremy Corbyn
Jeremy Corbyn

By Eamonn McCann

As the world economy skitters towards to the precipice Corbynomics begins to seem more sensible. A perspective which was dismissed as outlandish and unworkable just a few weeks ago is finding support in unlikely places.

In Scotland last week the Daily Record splashed its backing for Corbyn across the front page. The Record, Scotland's top-selling paper, is owned by the biggest British newspaper group, Trinity Mirror, which also publishes the Sunday Mail, the Daily and Sunday Mirror, the People and 240 regional titles across the UK.

Mainstream economists have also added their voices to the rising chorus of support for Corbyn. Last Sunday 41 eminent figures, including Danny Blanchflower, a former member of the Bank of England's monetary policy committee, put their names to a statement saying: "The accusation is made that Jeremy Corbyn and his supporters have moved to the extreme left on economic policy. But this is not supported by the candidate's statements or policies. His opposition to austerity is actually mainstream economics, even backed by the conservative IMF." (In the perspective of many in the Corbyn camp, this praise will seem something of a double-edged compliment. But that's a subject for another day).

Corbyn opposes further privatisation and says that any assets sold off by the Tories between now and the end of this parliament will be renationalised without compensation if he is PM after 2020. All three of his leadership rivals insist that this idea lacks "credibility". Yvette Cooper warns of "dire consequences". Tony Blair, Alastair Campbell and a range of others from the ancien regime insist that they know from experience that policies of this sort make Labour unelectable.

The Corbyn camp has cited the Royal Bank of Scotland and Royal Mail as suitable candidates for no-compensation take-back into public ownership.

Four weeks ago Chancellor George Osborne announced that a £2.1 billion chunk of the Government's stake in RBS had been sold at 300p a share.

This is to be compared with the 500p a share paid by the Government in 2008 to bail the bank out. That's a billion in public money gone wallop right there.

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The total cost of saving RBS from collapsing under the weight of profligacy, incompetence and greed was £45.5bn.

In return, the State took 79% of the shares. The first instalment in Osborne's sell-off has reduced this to 73%.

He intends to sell almost all of this by 2020. If the share price is pitched at 300p, the overall loss to the public purse will be around £7bn. Corbyn is the only candidate calling for the sell-off to be stopped and pledging to reclaim any losses suffered by taxpayers if it goes ahead.

Whence the assumption that this would prove a vote loser?

The sell-off of Royal Mail - a public asset since 1615 - makes the same point, only more so.

Michael Heseltine under Thatcher and Peter Mandelson under Blair toyed with the idea of privatising the mail, but backed off in the face of technical difficulties and public hostility.

Then, in October 2013, Business Secretary Vince Cable floated the company on the stock exchange and invited offers.

To make the package more attractive, most of the company's pension liabilities were taken off the books, hundreds of post offices were closed and the price of stamps was raised by 30%. A number of banks, including Lazards and Goldman Sachs, were hired to advise on conduct of the sale.

They recommended a share price of 330 pence, assuring Cable that the major institutions wouldn't pay more.

The offer was 24 times oversubscribed.

Within hours of the shares going on the market the price had soared to 455 pence.

By close of play on launch day the lucky investors had pocketed £750m.

This can be put down as the biggest rip-off in British history.

Among those to benefit from the bonanza were hundreds of clients of Lazards, Goldman Sachs etc. The bank had been paid £12.7m for its advice.

Truly, you couldn't make this stuff up.

Now there's a barrage of voices screeching that Labour will never be returned again if it goes into an election promising to undo a scheme that sensible people might regard as a swindle.

Thus the intervention of Establishment newspapers and economic grandees warning, in effect, that refusing to swallow the medicine prescribed by Corbyn could make major surgery necessary further down the road.

Another alternative in such dire straits would involve the class that benefited big-time from the Dutch auction of public assets resorting to desperate measures to protect their positions.

Belfast Telegraph


From Belfast Telegraph