Finance minister George Osborne said that if the opposition Labour Party under Jeremy Corbyn ever won power it would wreck the British economy with money printing, higher borrowing and punitive income taxes.
Corbyn, who won control of the Labour Party on Saturday with a mandate to oppose spending cuts, named a hard left ally as his would-be finance minister, signalling his intention to pursue a hard left economic agenda.
At the heart of Corbyn’s economic policy is ‘people’s quantitative easing’, a proposal to print money to pay for investment in infrastructure such as housing and railways. He also wants to renationalise rail and energy sectors.
Osborne, who is currently frontrunner to succeed Prime Minister David Cameron as Conservative leader ahead of the 2020 election, warned that Corbyn’s ideas would undermine the Bank of England’s independence and undo a generation of work by both his own Conservative party and previous Labour governments.
“By printing cash to pay for public spending, it would stoke inflation, ramp up prices and undermine the real-terms pay rises that many have worked so hard for,” he wrote in The Times newspaper on Tuesday. He called Corbyn’s renationalisation plans an “industrial policy straight out of the 1970s”.
Corbyn and his finance spokesman John McDonnell have argued that printing money to pay for investment during times of recession will sustain growth – something they say should not be achieved by paring back public spending.
