Jeremy Corbyn Bets Everything on a Plan to Rewire the U.K. Economy

A fairy tale? Maybe, but those are just some of the promises Jeremy Corbyn and his Labour Party have made to voters as the U.K. sprints toward a general election on Dec. 12. They’re not even the most audacious proposals the 70-year-old lawmaker is pushing in his bid to “rewrite the rules of our economy.” He wants to renationalize railroads, utilities, the postal service, and British Telecom’s fiber-based broadband business. The bill for Labour’s program—£83 billion ($106 billion) in new annual spending and £400 billion for economic development projects over a decade—would be unprecedented in peacetime.

Even as opinion polls inevitably tighten and Conservative Boris Johnson’s big lead shrinks a bit, it’s clear that Corbyn’s campaign is not so much against the current prime minister but a previous one and the kind of economic and social policies she championed. For Corbyn, a grizzled socialist who cut his teeth battling Margaret Thatcher in the 1980s, this contest is bigger than Brexit. It’s about holding a new referendum on capitalism itself, or at least the austere incarnation that’s hollowed out public services in the U.K. since the global financial crash of 2008.

In the wake of the Nov. 29 terror attack on London Bridge that disrupted the election campaign, he told Sky News that people convicted of terrorism charges do “not necessarily” have to serve out their entire sentences. The assailant Usman Khan had been released on probation six years after pleading guilty in 2012 to planning to set up a terrorist camp. Johnson blamed Labour governments for the existing liberal rules that allowed for Khan’s release. Corbyn said the police were right to shoot Khan dead because it was believed he had strapped himself to a bomb but that it remained to be seen whether probationary oversight had been adequately imposed.

According to a YouGov poll, 61% of voters have a negative opinion of Corbyn compared with 47% for Johnson, which is striking given the prime minister’s reputation for mendacity and adultery, and the infighting between the pro- and anti-Brexit factions of the party that has led to parliament’s current state of paralysis. Corbyn’s ambivalence on Brexit has also branded him a fence-sitter who lacks the courage to speak his mind on the issue: While he’s long viewed the EU as an instrument of corporate interests that hurts workers’ rights, he doesn’t dare alienate the legions of Labour supporters who want to remain in the 28-nation bloc. On Nov. 22, he declared he would stay neutral on the issue and be an “honest broker” should Labour win the election and fulfill its pledge to hold a second referendum by next summer. For many Britons, that’s a cop-out.

“Radical answers are what’s necessary,” Corbyn had declared the day before as he unveiled his platform in a speech in Birmingham, England. “When you have so many children in oversized classrooms, when you have so many people who have no hope whatsoever of buying their own home, when you walk down the High Street and see business after business gone, you see the scale of depression and unrequited ambition and needs across our society.” He plans to spend 27 times more government money on schools, transportation, health care, and other services than Johnson. As Corbyn tilts against the “billionaires, bad bosses, dodgy landlords, and big polluters” and, he says, their supporters in the Conservative Party, he’s betting that a politics that was supposed to have died long ago is reanimated and primed for victory.

Corbyn’s plans are mostly a rehash of ideas Labour first floated decades ago. Thatcher was reshaping the U.K. economy by privatizing state-owned monopolies and breaking the influence of trade unions. During the election of 1983, Labour, then controlled by a faction called the New Left, called for a raft of socialist measures. But Thatcher won handily, delivering Labour its worst defeat ever and nearly wiping out the party. Corbyn, who joined Labour at 16 and honed his political philosophy on travels through Latin America in the late 1960s, was elected to Parliament for the first time that year. (So was Tony Blair, who would go on to make New Labour a pro-business party and win three consecutive elections from 1997 to 2005.) Together with allies such as Jon Lansman, a community organizer, and John McDonnell, a member of Parliament, Corbyn spent the next 32 years in the political wilderness.

Now McDonnell is Labour’s economic czar and Corbyn’s No. 2, and Lansman is the co-founder of Momentum, a grassroots group that has consolidated Corbyn’s control of the party by installing supporters in municipal councils and other bodies. “This is the story of old men in a hurry,” says David Kogan, the author of Protest and Power: The Battle for the Labour Party. “They were basically ignored and looked on with amused detachment by Tony Blair and New Labour for years.”

A Labour government would call for companies that don’t adequately fight climate change to be delisted from the London Stock Exchange. Every business with more than 250 employees would have to set aside up to 10% of its equity over 10 years in an “Inclusive Ownership Fund” that would distribute annual dividends of £500 to each worker—a move that would cost investors £300 billion, according to the law firm Clifford Chance. The corporate tax rate would jump from 19% to 26% by 2022, and individuals making more than £80,000 a year would have to pay more, too. The agenda is rattling boardrooms. “CEOs are more worried about Jeremy Corbyn than a hard Brexit,” says the head of a corporate communications and lobbying firm, who asked not to be named because he was talking about confidential advice to clients. “It’s a nightmare of a choice.”

Not for a new generation that’s confronting student debt, a lack of affordable housing, and the fear of climate change. Voters, especially younger ones, are fed up watching the breakdown of Britain’s infrastructure after years of severe budget cuts imposed by Conservative prime ministers in the name of post-crash fiscal responsibility. Consumers are aghast at rising prices for electricity and water, and ask any commuter about the pricey fares and erratic performance of trains into London if you want to hear some choice British profanity. Meanwhile the National Health Service is so understaffed that waiting times in some emergency rooms are running more than four hours, a 15-year high. Stories abound of patients on gurneys parked in corridors because of the acute shortage of beds. A recent survey found that 90% of the U.K.’s hospital chiefs fear shrinking resources are threatening patients’ health.

During the Birmingham speech, Corbyn railed against Johnson for, he said, planning to secure a free trade agreement with the U.S. after Brexit by opening up the country’s beloved NHS to American-style profiteering. “Labour will never use our NHS as a bargaining chip in trade talks, and we will never let Donald Trump get his hands on our NHS!” he thundered to a standing ovation and whoops from his supporters. Johnson insisted there were no such plans. But less than a week later, Labour released more than 450 pages of leaked documents showing that U.S. officials expected “total market access” to myriad sectors in the British economy after Brexit, including healthcare.

Faiza Shaheen, an Oxford-educated economist running for a seat in Parliament in northeast London for the first time, says the idea that privatization and the free market will make such services more efficient and affordable is no longer credible. She was part of a wave of young people who vaulted Corbyn to the leadership of Labour in 2015 over more centrist nominees. “They were all talking in this kind of beige rhetoric about tinkering with the system, pushing the status quo, but Jeremy Corbyn was actually saying something real,” says Shaheen, 36, sipping tea on a Sunday morning in a cafe before she went door-knocking with campaign volunteers. “It’s bold change, not the old model.”

The support from young voters hasn’t been enough to distract from the accusations of anti-Semitism that have dogged him and the Labour party since Corbyn became leader in 2015. On Nov. 12, Ephraim Mirvis, the U.K.’s chief rabbi, called Corbyn “unfit for high office.” Even as the NHS revelations put Johnson on the defensive, Corbyn was struggling to defend his past support for Hamas, which the U.K. considers a terrorist organization.

When you stack up Corbyn’s liabilities, it’s hard to see how he can instill confidence in his leadership approach, says Deborah Mattinson, a founding partner with BritainThinks, a polling and political consulting firm. “Rewiring the economy may be fine, but you have to do that from a position where voters trust you, and if they don’t you’re in trouble,” Mattinson says. Then again, elections, especially these days, have a way of defying the conventional wisdom. Corbyn and Labour overcame a double-digit deficit in the 2017 election to deprive Theresa May, Johnson’s predecessor, of a majority in the House of Commons.

On the campaign trail, Corbyn comes across as a grandfatherly figure as he listens patiently to nursing students, small-business owners, and families describe their concerns. In mid-November he reacted quickly to severe flooding in northwest England and surveyed the damage with local officials, earning far better press than Johnson, who was heckled by residents for his belated response. Polls say Corbyn is more in touch with the needs of ordinary people than Johnson, who was educated at the elite boys’ school Eton College and is fond of speaking in Latin. In the latest YouGov survey, the Tories are leading Labour by nine percentage points.

As Corbyn finishes his speech in Birmingham, four university students wait with dozens of other supporters for him to board his red campaign bus. They not only have zero problem with his desire for an “activist state,” they see it as the sole remedy for a system that’s still forcing average people to pay for the sins of the financial industry in the ’08 crash.

“You can’t deny the worst hasn’t happened,” says Lewis Quinn, 18.

“We never really recovered from the last recession,” chimes in Ben Lockley, 19.

“Investment shouldn’t be left up to philanthropists and billionaires,” says Roisin Finn, 22. “We have a government that is there, why don’t we use it?”

Even though Finn and her friends like what they’ve heard, they bail before Corbyn emerges to board his campaign bus. The northern wind is too cold to bear.

©2019 Bloomberg L.P.