Labour will say that the economy is in a terrible state, and experts agree that a boost to public investment is needed for a long and arduous recovery. Businesses have been reluctant to invest without government support, especially in green initiatives, since the chaos caused by the Brexit vote.
The UK’s public finances are in bad shape, with a heavy reliance on borrowing to fund government spending. Former chancellor Jeremy Hunt’s expensive cuts to national insurance contributions worsened the situation by slashing public investment and freezing departmental budgets already hit by austerity.
Labour’s plans for public investment are based on maintaining and improving existing infrastructure, rather than making wild and unfunded promises. They have set aside funds for a national wealth fund and GB Energy, which supports renewable energy projects. However, rushing to spend public funds too quickly could lead to wasteful spending.
Economics experts believe that Labour could free up more funds for public investment by revisiting commitments made by Jeremy Hunt, such as recognizing Bank of England losses and adopting budget rules that prioritize reducing government debt. By freeing up more money for public investment, Labour could potentially drive growth and improve the economy.
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