We will admit to being fascinated by the coming car crash that is the Labour leadership competition. While we’re intensely political here, we’re not party political. But we do think that perhaps a slightly closer connection with reality might be in order. Here’s Jeremy Corbyn’s latest policy idea:
“Under these plans Labour 2020 will make large reductions in the £93 billion of corporate tax relief and subsidies.
“These funds can be used to establish a National Investment Bank to head a multi-billion pound programme of infrastructure upgrades and support for high-tech and innovative industries.
That £93 billion comes from a paper discussed here. That £93 billion also has no connection to this universe that we inhabit. But despite a certain amount of to and fro between the report’s author and your current humble scribe it simply was not possible to convince that report’s author that depreciation is not a subsidy to business. He really is under the impression that capital allowances mean that the government buys stuff for companies to use: rather than just not taxes them on the money they use to buy them for the obvious reason that companies are taxed upon their profits. And the cost of buying something to use to make stuff is obviously a cost of business.
Yet only a couple of weeks after the publication of a report of such obvious fatuity we’ve got it as the cornerstone for a national economic policy after the next election.
All most amusing but we might recommend just a slightly closer connection with reality.