I have developed a sudden interest in John McDonnell. As a fan of Monty Python I am really looking forward to his funding sums for the leaked manifesto commitments (£50bn? tsk- tis nothing but a scratch). As far as I can figure he is proposing;
Abolition of tuition fees; £11bn per year Nationalisation of Royal Mail; £4bn (based on current capitalisation) Additional NHS and social care spending; £7.6bn per year Additional school spending; £6bn per year Nationalisation of National Grid; £39bn (based on current capitalisation) Building 100k social homes per year: £7bn per year at an average build cost of £70k 10k more police/3k prison officers/1k border force: £500m per year at employment cost of £35k each Effect of increased minimum wage/parental leave/paternity pay/etc on 5.4 million public sector workers; £1bn (guess)
So the commitments add up to at least £33bn per year during the next parliament with additional one off costs of at least £43bn for renationalisation. I note that Labour have used the weasel words that they 'will take control of National Grid'. I have news for them; the only way they can do this is by paying for it - otherwise they will lose in court. The proposal to hike corporation tax by 6% would (optimistically, based on IFS numbers) raise £9bn per year. Tax increases on only those earning £80k+ (is this per person or family?) Assuming Labour actually increase the top rate of income tax from 45 to 60% and the higher rate from 40 to 45% (which would hit earners over £45k - hardly the rich) this would yield (again IFS numbers) £7.5bn. It would be much less if they stick to a pledge to only hit those earning over £80k.
So the two main proposals to increase tax (assuming sharp increases) cover only half of the additional annual spending commitments with nothing for the one off costs.
I am really looking forward to seeing which of the Lewis Carroll fantasies McDonnell invokes to make his numbers add up. Could we be looking forward to an entirely new set of mathematical axioms?