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September 11, 2015

No comment: UK profession avoids the Corbynundrum

Jeremy Corbyn’s bid to become leader of the opposition party in the UK has drawn unprecedented media interest.

All of a sudden his proposals have transcended the limits of the Labour Party’s leadership soul-search and are the subject of heated debates not just in the press but elsewhere, including the workplace and at Britain’s most famous institution: the pub.

Economic commentators, editorialists, policy makers, as much as the man in the street, everyone talks about Corbynomics, or is ready to voice an opinion on the whole issue of the so-called Corbynmania.

This, however, doesn’t seem to be the case of the UK accountancy profession, with the exception of ACCA.

Given the undeniable prominence that Corbynomics have achieved, The Accountant sought comment from a number of well-known UK accountancy stakeholders on the technical aspects of these proposals.

Those approached politely declined to offer views on Corbynomics. At Deloitte UK, chief economist Ian Stewart, who writes a very informative brief each Monday, passed on the proposition.

The Financial Reporting Council didn’t see it as appropriate to comment on this topic due to its apolitical status as "independent regulator" and "partner agency of BIS", the UK government’s Department for Business Innovation & Skills.

The Institute of Chartered Accountants in England and Wales said it preferred not to comment on policy ideas related to internal party elections and thus remain politically impartial.

The Chartered Institute of Management Accountants and the Institute of Chartered Accountants of Scotland saw the issue straying too much into politics – a subject that apparently, whatever definition of politics is used, shouldn’t disturb the peace at the Accountancy ivory tower.

Related articleCorbynomics: Everything you always wanted to know about it, explained by Richard Murphy

Corbynphobias, some of the arguments against Corbinomics in the press:

Tony Blair, former UK Prime Minister, in The Guardian: "Jeremy Corbyn doesn’t offer anything new. Those of us who lived through the turmoil of the 80s know every line of this script. These are policies from the past that were rejected not because they were too principled, but because a majority of the British people thought they didn’t work. Even if you hate me, please don’t take Labour over the cliff edge."

Tony Yates, former Bank of England monetary analysis directorate advisor, in his blog: "Corbyn’s QE is the first step along the road to undermining the social usefulness of money, and would ultimately impoverish us. If we were in a state of monetary policy crisis, then QE-financed something is at least worth considering. But that something should be as politically neutral as possible, and not a matter for the BoE".

The Economist: "Mr Corbyn’s prescriptions are seriously flawed. […] For starters, the £93bn figure [on corporate subsidies] is a fiction. And cutting some corporate welfare might actually harm investment: according to economists at HMRC, the tax agency, for every £1 spent on research and development tax credits, British companies boost their R&D spending by £1.53-£2.35. The £120bn in missing tax revenues – which is about four times the government’s own estimate comes from a report by Tax Research, a pressure group. Even if the figure is to be believed – which requires a leap of faith, since the report does not explain its calculations fully – Mr Corbyn’s proposed remedies are wanting."

Chris Giles, economics editor, Financial Times: "It is Mr Corbyn’s populism, not his being hard left, that destroys his economic credibility. A smart hard-left stance could claim to boost both prosperity and equality. It would be radical and coherent, but in undermining property rights, possibly not all that popular – one of the reasons why the hard left rarely wins office."

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