The Labour party received a boost on Tuesday when 163 economists signed a public letter offering broad support for its proposals for higher public investment to kick start growth and raise productivity.
The letter published in the Financial Times lamented Britain’s poor economic performance of the past decade, called for “a serious injection of public investment” and said Britain would benefit from greater state involvement in national economic management.
Although most of the signatories are left-leaning academics, their support for the proposals for radical measures will come as a boost for Labour at a time when the Conservatives, who have led the government since 2010, are attacking the party’s manifesto as likely to cause an economic crisis within months.
“It seems clear to us that the Labour party has not only understood the deep problems we face, but has devised serious proposals for dealing with them. We believe it deserves to form the next government,” the letter said.
Michael Jacobs, professor of political economy at Sheffield university who co-ordinated the letter, said it had been surprisingly easy to find economists willing to sign. “The easiest thing for academic economists to do is sit on the fence,” he said, adding that “although academics generally do not go out on a limb, most had been willing to say that the UK faced a big choice and that enough of Labour’s programme accords with their own views”.
Five who took the lead in promoting the letter included David Blanchflower, professor of economics at Dartmouth College, in the US, who publicly fell out with Jeremy Corbyn, writing in 2016 that under Mr Corbyn, “Labour does not seem to have a credible economic plan”.
The others were Victoria Chick, emeritus professor of economics at University College London; Meghnad Desai, emeritus professor of economics at the London School of Economics; Stephany Griffith-Jones, emeritus professorial fellow at the Institute of Development Studies; and Simon Wren-Lewis, emeritus professor of economics at Merton College, University of Oxford.
The letter challenged the Conservative claim that it has run a “strong economy” since 2010, saying there had been “10 years of near zero productivity growth”, stagnant corporate investment, low wage growth and increasingly strained public services.
With business investment having fallen for most of the past two years, the authors said higher public investment would help raise growth and productivity on its own as well as “leverag[ing] private finance attracted by the expectation of higher demand”.
All three main parties are offering higher public investment, ranging from £100bn over five years from the Conservatives to £275bn from Labour, in moves that will increase public borrowing but hope to improve longer-term economic performance.
Other economists have questioned whether it will be easy for the government to spend such large amounts quickly without waste and choosing poor investment projects.