Jeremy Corbyn's economic policies could be 'highly damaging', economists warn

The economic policies of Jeremy Corbyn, the front-runner to become the next Labour party leader, are likely to be "highly damaging" and his proposal for "People's quantitative easing" would threaten "fiscal credibility", a host of economists have warned.

The veteran left-wing MP is expected to triumph in next week's Labour leadership contest and has proposed a number of economic measures, including giving the Bank of England powers to invest in housing, energy, transport and digital projects, reopening coal mines, and nationalising gas and electricity.

However, 55 academics have put their names to a letter to the Financial Times warning that Mr Corbyn's policies could have dire consequences for the country if they were implemented.

"We wish to register our opinion that the economic policies sketched by Jeremy Corbyn are likely to be highly damaging," they wrote.

"Renationalising industries is highly unlikely to improve the performance of its targets, and very likely, if history is anything to go by, to make things worse.

"If compensation is paid, it will be a waste of fiscal space, even unaffordable; in case it is not, it will be extremely damaging to the climate for enterprise in the UK as other companies fear the government would get a taste for it."

The letter added that People's QE "would be a highly damaging threat to fiscal credibility".

The academics also questioned forecasts that the Islington North MP has made for the funds that could potentially be raised from cracking down on tax evaders and cutting corporate subsidies and tax relief - so-called "corporate welfare".

They described the numbers as "unbelievable and add to the sense that Mr Corbyn's plans have not been seriously thought through".