November 7, 2019 / 12:10 AM / 12 days ago

Conservatives and Labour vow to spend big in battle for votes

LIVERPOOL/MANCHESTER, England (Reuters) - Britain’s governing Conservatives vowed on Thursday to spend billions on infrastructure, stepping up an election battle with the main opposition Labour Party over who is best placed to drive growth and help struggling regions.

The Labour party campaign bus is seen in Liverpool, Britain November 7, 2019. REUTERS/Phil Noble

With Britons due to vote on Dec. 12, the main parties are drawing up battle lines: Prime Minister Boris Johnson says he alone can deliver Brexit, while Labour leader Jeremy Corbyn says only his policies offer real change.

On Thursday, the focus turned to the economy. Shortly after finance minister Sajid Javid pledged to spend an extra 100 billion pounds on infrastructure over five years, his Labour rival John McDonnell upped the ante with a plan to spend around double that amount.

Early spending pledges from the two parties prompted a non-partisan think-tank, the Resolution Foundation, to declare on Monday that Britain appeared to be heading back to 1970s levels of state spending whoever wins.

Speaking in the northern English city of Manchester, Javid said voters faced a choice over who could be trusted to spend more to grow the economy without racking up debt.

“The difference between Labour and the Conservatives just couldn’t be bigger in this. We have a responsible plan that will allow us to have that decade of renewal,” he said, standing beneath a Concorde aeroplane in an aircraft hangar.

“Anything John McDonnell promises today, it doesn’t matter if it’s an extra pound, an extra 150 billion or an extra trillion, it just cannot be relied on. Before he spends any of that money, the economy will be ruined.”

The poll Johnson called to try to break parliamentary deadlock over Brexit is shaping up to be a contest between two parties more than willing to break with years of economic austerity imposed since the Conservatives took power in 2010.

Both Javid and McDonnell travelled to the north of England to make their pitches, eyeing seats outside the main cities where many voters feel they have been squeezed by cuts and decades of deindustrialisation.

McDonnell, who opposes the current model of capitalism and promises to shake up the financial sector if he takes control at the Treasury, pledged additional spending of 150 billion pounds on schools, homes and hospitals.

He said this would “begin the urgent task of repairing our social fabric that the Tories (Conservatives) have torn apart.”

Labour has already pledged to invest another 250 billion pounds in capital projects over the next 10 years, financed by selling bonds, to stimulate growth and make the economy greener.

“Our aim as a Labour government is to achieve what past Labour governments have aspired to,” he said. “An irreversible shift in the balance of power and wealth in favour of working people.”

MARRED BY EVENTS

Both parties were concentrating on the economy on the second day of the official campaign after their early efforts were marred by unplanned events.

On Thursday, a former Labour lawmaker took aim at Corbyn, saying he didn’t think he was fit to be prime minister and would encourage the party’s supporters to consider backing Johnson.

That came after Corbyn’s deputy, Tom Watson, unexpectedly said he would stand down at the election, citing personal rather than political reasons. Watson had long been at odds with Corbyn over Brexit among other issues.

The Conservatives have also faced problems. On Wednesday, the official launch of Johnson’s Conservative campaign was overshadowed by a Cabinet minister’s resignation, much-criticised comments by one of his team about a deadly tower block blaze, and a doctored video advert.

Nine years of spending cuts to reduce a budget deficit that ballooned during the financial crisis have taken their toll on voters, with many public services financially stretched and polls suggesting little appetite for more austerity.

With that in mind, both parties are promising to end the era of cuts and undertake huge infrastructure investment programmes — taking advantage of record-low government borrowing costs in financial markets to fund them.

Slideshow (10 Images)

The Resolution Foundation report said such pledges could push government spending above 40% of national output — levels not seen in the UK for decades, although still below those in Germany or France — and that taxes would have to rise.

Bank of England Governor Mark Carney said on Thursday there was a prospect of Britain finally securing its exit from the EU — something Johnson hopes to achieve by winning a majority in the election — which could boost growth.

At the start of the election campaign, the Conservatives enjoy a lead over Labour of between 7 and 17 percentage points, though pollsters warn that voters are volatile and their models are wilting beside the Brexit furnace.

Additional reporting by William Schomberg, Writing by Kate Holton and Elizabeth Piper; Editing by Catherine Evans

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