(qlmbusinessnews.com Thurs. 20th June, 2024) London, UK —
Starmer and Reeves’ Economic Plans Win Support from Top Economists
A group of leading economists, including three Nobel Prize winners and a former Deputy Governor of the Bank of England, have endorsed Labour’s plans to tackle the UK's prolonged economic stagnation. This endorsement is a significant boost for Shadow Chancellor Rachel Reeves and Labour leader Keir Starmer.
The 16 economists, based both in the UK and internationally, have criticised the policy errors and failures over the past 14 years under Conservative rule, asserting that change is “desperately needed.” In a letter to The Guardian, they describe Labour's proposals as a “credible alternative” to the current government’s economic strategy.
Signatories of the letter include Nobel laureates Joe Stiglitz, Sir Christopher Pissarides, and Sir Angus Deaton, alongside Sir Charles Bean, a former Deputy Governor of the Bank of England.
The economy has been a central theme in the election campaign, with Prime Minister Rishi Sunak highlighting the recent drop in the annual inflation rate to its 2% target as a sign of recovery. In contrast, Labour blames “Tory chaos” for weak growth and higher taxes, a view echoed by the group of economists.
“Britain has endured a lengthy period of economic stagnation over the past 14 years, with sluggish growth in productivity, real wages, and living standards,” the letter states. “Not only is this record poor by historical standards, but the UK has also underperformed compared to its international peers. We invest too little and too inefficiently – particularly in skills, infrastructure, and innovation.”
Despite criticisms from some on the left regarding Starmer and Reeves' cautious approach, which largely mirrors Conservative tax, spending, and borrowing plans, the letter highlights four key areas where Labour could make a significant impact.
The economists pinpoint frequent policy mistakes, U-turns, and leadership changes as contributing to “huge investment-sapping uncertainty.” Since 2010, the UK has had five prime ministers and seven chancellors.
They advocate for structural reforms to enhance public infrastructure and housing, particularly around the planning system, which Labour has pledged to expedite. They also support Labour’s commitment to improving post-Brexit trade relations with the EU and accelerating the transition to net zero and sustainable growth. Labour’s ambitious target to decarbonise the electricity supply by 2030 is noted as a key commitment.
“Change is desperately needed,” the letter asserts. “Contrary to the government’s claims, we believe that Labour offers a credible economic alternative across all these dimensions. Keir Starmer and Rachel Reeves provide a combination of stability and ambitious reforms to help grow the economy.”
Other signatories include Richard Layard, a labour market expert and Labour peer; Professor Mariana Mazzucato, founding director of the Institute for Innovation and Public Purpose at University College London; and Professor David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee.
Blanchflower expressed confidence in Labour’s economic strategy, doubting that the Conservatives could garner similar support from prominent economists. “They would struggle to find anybody with any clout,” he said. “How many Nobel Prize winners support the Conservatives?”
He emphasised the importance of Reeves and Starmer having a robust plan if they win the upcoming election. “They are likely to be elected, so what will they do then? They can’t just be Tory-lite,” he concluded.
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