January 4, 2018 / 10:19 AM / in a year

UK Labour's economic plan is high-risk gamble, says party education chief

LONDON, Jan 4 (Reuters) - The opposition Labour Party’s proposal for a sharp increase in state-funded investment is a high-risk economic strategy, Labour’s education policy chief said in an interview published on Thursday.

The socialist leadership of Britain’s second largest party has promised a range of sweeping economic reforms if it wrestles power from Prime Minister Theresa May’s Conservatives, including a debt-funded 250 billion pound 10-year investment plan.

“We are in different times, radical times where we need to have a real investment in Britain’s future. Genuinely. I don’t mean that as a slogan, I mean it as an economic strategy,” Angela Rayner, Labour’s would-be education minister told the Spectator magazine.

“It’s a high-risk strategy. But all of Britain’s great advancements in the past have been because we’ve had the gumption to take a risk.”

Labour performed much better than expected in a June national election, depriving May of an outright majority in parliament. That has pushed investors to seriously consider the prospect of Labour taking power sooner than the next scheduled election in 2022.

Morgan Stanley cautioned investors on Nov. 26 that political uncertainty in Britain was a bigger threat than Brexit given the risk of Corbyn winning power and then dismantling what was once seen as one of the world’s most stable free-market economies.

Labour leader Jeremy Corbyn later hit back at the bank, saying: “They’re right: We’re a threat to a damaging and failed system that is rigged for the few.” (Reporting by William James; editing by Guy Faulconbridge)

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