In a recent interview Jeremy Corbyn was asked to identify his successes of the past year.
Alongside saying sorry for the Iraq war, the Labour leader said “turning the party into one that challenges the economic orthodoxy” comes high on his list of achievements.
He may be challenging it, but he's far from forging a new consensus. The latest polls show that Theresa May and Philip Hammond are seen as more credible than Corbyn and John McDonnell by a stonking 38 points. Labour was struggling with economic credibility long before Corbyn took the reins, but the Islington MP seems determined to cement this deficiency as a permanent feature of his party's electoral proposition.
The new centrepiece of Labour's economic strategy is the creation of a national investment bank, complete with a network of regional banks and a specific new 'bank for the North'. This should set alarm bells ringing. McDonnell has pledged to raid the public purse to the tune of £350bn to fund the project, claiming that a further £150bn of private money will be “mobilised”.
McDonnell doesn't have anything against banks, he just thinks they should all be owned by the state. In a set of policies that disappeared from his personal website shortly after Corbyn appointed him to the role of shadow chancellor last September, the diehard socialist proposed full public ownership of Britain's banking system in order “to take control of our casino economy”.
The notion that economic activity (with all its intricacies, complexities and variables) can be directed from a government department is an idea that should have long since has its day. Theresa May has raised eyebrows by rekindling the concept of industrial strategy, but Labour's proposals take faith in the state's ability to an entirely new level. Little wonder that London mayor Sadiq Khan lamented over the weekend that Labour's anti-business reputation continues to be an embarrassment.
“I want JP Morgan and others to know the mayor is on their side,” he said. The mayor might be, but his party's leadership isn't. Corbyn and McDonnell can challenge economic orthodoxy as loudly as they like, but it simply moves their party further and further away from any prospect of electoral success.