On Tuesday 30 May, the media and the Conservative Party made much of Jeremy Corbyn forgetting the cost of Labour’s free childcare for two-year-olds policy on BBC Radio 4‘s Woman’s Hour. But two days later, and figures have revealed the extent of the Tories’ economic incompetence. And they show that the UK economy has already tanked this year. It is now the worst-performing advanced economy in the world.
What’s more interesting, though, is that Canada is out-performing all other major economies. And this news will hearten Corbyn. Because Canada’s government has put in place economic policies almost identical to those that Labour has outlined in its manifesto.
The UK has slumped to the bottom of the G7 group of advanced economies. As City AM reported, the British economy grew by just 0.2% in the first three months of 2017, which is equal to the growth of Italy. The results were as follows:
- Canada – 0.9%
- Germany – 0.6%
- Japan – 0.5%
- France – 0.4%
- US – 0.3%
- UK/Italy – 0.2%
The Guardian said the UK result was evidence that the “early resilience to [Brexit]… is now wearing off as higher inflation puts consumers under pressure”. And the outlook doesn’t seem much better. The OECD is forecasting that the UK will be the sixth slowest growing economy in 2018 with annual GDP increase of just 0.96%. Canada once again tops this table, with growth of 2.34%. As City AM said:
Sluggishness in the UK economy may be here to stay, after house prices fell for the third consecutive month… Consumers are facing increasing pressure, with inflation rising to 2.7 per cent, its highest level since September 2013. And… average weekly earnings grew 2.1 per cent in the first quarter of the year, bad news for consumers.
Canada gets it right
But there’s good reason for Canada topping economic tables. Because its government has rejected austerity and chosen to invest, using the current low interest rates as leverage. Canada’s Liberal PM Justin Trudeau has pledged to spend C$180bn on infrastructure over the next 12 years. This includes setting up a government infrastructure bank to fund projects. A scheme which is almost identical to Labour’s planned national investment bank. Because like Corbyn’s proposal, Canada’s will be part-funded by government, loans, and private investment.
Trudeau has also taken the focus off the country’s budget deficit (the figure the Tories’ in the UK obsess over), stopped [paywall] austerity, and increased public spending per person to near-record levels. These policies have been praised by the International Monetary Fund (IMF) and members of the G20. And they are also all policies that Labour has tabled; aside from the deficit, which the party has pledged [pdf p12] to eliminate within five years.
Not out of the woods yet…
But Trudeau’s approach is not without its problems. The IMF has warned of risks surrounding Canada’s potential housing bubble and spiralling personal debt. And that situation is mirrored in the UK, where economists have warned of a British housing bubble, and where personal debt is at record highs.
So while Canada has outperformed the rest of the G7, the Tories have presided over the tanking of the UK economy. They’ve helped create the conditions for further economic problems. And this is while they still berate Labour for supposed economic incompetence. In spite of Labour costing its manifesto and the Conservatives not doing so.
If Canada is anything to go by, Corbyn’s financial plans may be just what the UK economy needs right now. And it’s now down to the voters on 8 June to decide whether he can put them into action or not.
– Get out there and vote on 8 June. And encourage others to do the same.
– Discuss the key policy issues with family members, colleagues and neighbours. And organise! Join (and participate in the activities of) a union, an activist group, and/or a political party.
– Also, read more Canary articles on the 2017 general election.
– Support The Canary if you value the work we do.
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