Labour Calls for $139 Billion Spending Spree to End U.K. Austerity

(Bloomberg) -- Britain’s opposition Labour Party said the ruling Conservatives must spend a total of 108 billion pounds ($139 billion) on public services in next week’s budget to reverse the impact of a decade of austerity.

Prime Minister Theresa May’s promise to end austerity would require widespread spending across government departments, welfare, education and local government, rather than “financial conjuring tricks,” the party’s finance spokesman, John McDonnell, will say in a speech Thursday, according to remarks emailed by Labour.

McDonnell will call on Chancellor Philip Hammond to end and reverse corporation tax cuts and boost public expenditure, including spending:

• 19 billion pounds to stop further cuts by government departments
• 42 billion pounds to reverse the impact of departmental cuts since 2010
• 7 billion pounds to stop social security cuts
• An additional 17 billion pounds to undo the impact of social security cuts since 2010
• 1.5 billion pounds by 2020 to fill the funding gap in social care
• Another 8 billion pounds to reverse the impact of cuts to social care since 2010
• 1 billion pounds to stop further cuts to per pupil school funding
• More than 3 billion pounds to reverse the cuts to further and adult education since 2010
• More than 1 billion pounds to reverse the cuts to “Sure Start” children’s services
• 1.3 billion pounds to halt cuts to local councils next year
• Another 3.9 billion pounds to fill their funding gap in 2020
• More than 3.5 billion pounds to reverse cuts to affordable housing grants

McDonnell will also say a Labour government would probably scrap and replace the unpopular Universal Credit program that merges six existing welfare benefits into a single payment, renationalize utility companies starting with the water industry, boost investment in renewable energy and force U.K.-based companies with more than 250 employees to give 10 percent of their equity to staff.

To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Alex Morales, Robert Jameson

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