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Jeremy Corbyn: Osborne's northern powerhouse plan is 'cruel deception' Jeremy Corbyn: Osborne's northern powerhouse plan is 'cruel deception'
(about 11 hours later)
George Osborne is guilty of a “cruel deception” over his plan to create a northern powerhouse, which involves little more than devolving the ability to impose public spending cuts, Jeremy Corbyn will say as he sets out his economic vision for the north of England.George Osborne is guilty of a “cruel deception” over his plan to create a northern powerhouse, which involves little more than devolving the ability to impose public spending cuts, Jeremy Corbyn will say as he sets out his economic vision for the north of England.
The Labour leadership candidate will pledge to end “central government diktat” to help deliver a “deep-rooted regeneration” of the British economy, as the Corbyn camp moves to show it has a wide-ranging economic plan for the whole of the UK.The Labour leadership candidate will pledge to end “central government diktat” to help deliver a “deep-rooted regeneration” of the British economy, as the Corbyn camp moves to show it has a wide-ranging economic plan for the whole of the UK.
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The launch of the Northern Future leg of Corbyn’s Vision for Britain 2020 plan in Yorkshire on Tuesday will be seen as a riposte to the shadow chancellor, Chris Leslie, who warned that the Islington North MP’s “starry-eyed, hard left” politics would keep the Tories in power for a decade.The launch of the Northern Future leg of Corbyn’s Vision for Britain 2020 plan in Yorkshire on Tuesday will be seen as a riposte to the shadow chancellor, Chris Leslie, who warned that the Islington North MP’s “starry-eyed, hard left” politics would keep the Tories in power for a decade.
Corbyn will say that the north of England needs to win back power from what he describes as the centralised state, as he challenges Osborne’s claim that the Tories are now acting as the region’s champion.Corbyn will say that the north of England needs to win back power from what he describes as the centralised state, as he challenges Osborne’s claim that the Tories are now acting as the region’s champion.
Shadow cabinet ministers say that Labour ceded political territory to the chancellor after he unveiled plans to devolve power to the north, through directly elected mayors, in what Osborne described as the “northern powerhouse”.Shadow cabinet ministers say that Labour ceded political territory to the chancellor after he unveiled plans to devolve power to the north, through directly elected mayors, in what Osborne described as the “northern powerhouse”.
But Corbyn says Osborne’s initiative has a central flaw because it gives local authorities no ability to prevent spending cuts. His policy document states: “Most parties on the surface agree to some sort of devolution to the north of England. What the Conservative government has embarked upon however is a cruel deception.But Corbyn says Osborne’s initiative has a central flaw because it gives local authorities no ability to prevent spending cuts. His policy document states: “Most parties on the surface agree to some sort of devolution to the north of England. What the Conservative government has embarked upon however is a cruel deception.
“They have devolved cuts to spending, but not the power to do anything to stop them. They have also added extra financial commitments that local councils will have to meet but without any extra money.”“They have devolved cuts to spending, but not the power to do anything to stop them. They have also added extra financial commitments that local councils will have to meet but without any extra money.”
Corbyn, who drew on suggestions from 1,200 contributors to develop his policy, will add: “There is a lack of faith in the Conservatives’ northern powerhouse agenda which combines power cuts for rail electrification with the devolution of crude cuts. Despite this, the need for reindustrialising the north of England and providing the investment and freedom to innovate and prioritise has never been stronger. There is an appetite for a real alternative and this important conversation has begun.”Corbyn, who drew on suggestions from 1,200 contributors to develop his policy, will add: “There is a lack of faith in the Conservatives’ northern powerhouse agenda which combines power cuts for rail electrification with the devolution of crude cuts. Despite this, the need for reindustrialising the north of England and providing the investment and freedom to innovate and prioritise has never been stronger. There is an appetite for a real alternative and this important conversation has begun.”
Related: Corbyn's economic strategy would keep Tories in power, top Labour figure says
Corbyn will also raise a question over the government’s plans to build the HS2 high-speed railway line to the north, on the grounds that it will drain other lines of investment and turn northern cities into “dormitories for London businesses”.Corbyn will also raise a question over the government’s plans to build the HS2 high-speed railway line to the north, on the grounds that it will drain other lines of investment and turn northern cities into “dormitories for London businesses”.
His document says: “The Conservative government has torn schools away from the support networks of local authorities, regardless of the wishes of teachers and parents, and made them accountable directly to Whitehall, bypassing parents and local communities. They have suspended the much needed investment in rail infrastructure in the north to fund HS2, a project with the aim of turning our great regional cities into dormitories for London businesses.”His document says: “The Conservative government has torn schools away from the support networks of local authorities, regardless of the wishes of teachers and parents, and made them accountable directly to Whitehall, bypassing parents and local communities. They have suspended the much needed investment in rail infrastructure in the north to fund HS2, a project with the aim of turning our great regional cities into dormitories for London businesses.”
Local enterprise partnerships, which are meant to encourage local economic development, cannot help to rebalance the economy because they are tightly controlled by the Treasury, Corbyn’s policy states. He says they “lack the scope, capacity and scale to tackle these problems free from central government diktat”.Local enterprise partnerships, which are meant to encourage local economic development, cannot help to rebalance the economy because they are tightly controlled by the Treasury, Corbyn’s policy states. He says they “lack the scope, capacity and scale to tackle these problems free from central government diktat”.
“It is in the long-term interest of the UK to rebuild a resilient industrial base and with its people, energy, land and water, the north of England is the place to do lead this,” Corbyn will say.“It is in the long-term interest of the UK to rebuild a resilient industrial base and with its people, energy, land and water, the north of England is the place to do lead this,” Corbyn will say.
The leadership hopeful’s campaign is seeking to make clear its economic regeneration vision, after Leslie warned that Corbyn’s plans would hurt poor people by causing inflation and interest rates to rise as well as cuts in public spending.The leadership hopeful’s campaign is seeking to make clear its economic regeneration vision, after Leslie warned that Corbyn’s plans would hurt poor people by causing inflation and interest rates to rise as well as cuts in public spending.
The shadow chancellor highlighted Corbyn’s proposal for a people’s quantitative easing and his pledge to deliver an extra £120bn in revenues through a crackdown on tax evasion and tax avoidance. Speaking of the QE plan on the BBC’s Today programme, Leslie said: “The difficulty is that if that then provokes higher inflation, if that then means that interest rates go up, who will pay the price for that? It is the poorest and those on the lowest incomes who already find the cost of living very difficult.”The shadow chancellor highlighted Corbyn’s proposal for a people’s quantitative easing and his pledge to deliver an extra £120bn in revenues through a crackdown on tax evasion and tax avoidance. Speaking of the QE plan on the BBC’s Today programme, Leslie said: “The difficulty is that if that then provokes higher inflation, if that then means that interest rates go up, who will pay the price for that? It is the poorest and those on the lowest incomes who already find the cost of living very difficult.”
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Richard Murphy, the founder of Tax Research UK, who drew up the people’s quantitative easing plan for the Corbyn campaign, dismissed Leslie’s criticisms on the grounds that the Bank of England is a long way from meeting its 2% inflation target. “The only way in which we would get near 2% is if we get back to a point where we have established: people with higher wages increase productivity and the economy is humming along nicely,” Murphy told the Guardian, as he challenged the Office for Budget Responsibility’s claim that the economy only has 1-2% spare capacity.Richard Murphy, the founder of Tax Research UK, who drew up the people’s quantitative easing plan for the Corbyn campaign, dismissed Leslie’s criticisms on the grounds that the Bank of England is a long way from meeting its 2% inflation target. “The only way in which we would get near 2% is if we get back to a point where we have established: people with higher wages increase productivity and the economy is humming along nicely,” Murphy told the Guardian, as he challenged the Office for Budget Responsibility’s claim that the economy only has 1-2% spare capacity.
He added: “So in many ways this form of QE is fairly neutral until you have people back in work on decent wages. At that point you definitely have to turn it off because at that point it becomes inflationary.”He added: “So in many ways this form of QE is fairly neutral until you have people back in work on decent wages. At that point you definitely have to turn it off because at that point it becomes inflationary.”