Theresa May: UK could end up like Greece if Labour comes to power
Theresa May has warned Labour’s economic strategy could leave the UK in a similar position to Greece, after Jeremy Corbyn demanded action to end the “low pay epidemic” in Britain.
Since the Conservative election losses, the Prime Minister has come under pressure from her own party to scrap the 1% cap on pay rises for the public sector.
Mr Corbyn said the Government was “recklessly exploiting the goodwill of public servants” by expecting them to keep up the same quality of service while seeing their wages cut.
But Mrs May shut down the prospects of the Government taking action before the relevant pay review bodies had reported, and gave an outspoken defence of the Tory deficit reduction programme.
“I understand that it has been hard for people working hard and making sacrifices over the years as we've been dealing with Labour's mismanagement of the economy,” she said at Prime Minister’s Questions this afternoon.
“But let me remind the Right Honourable Gentleman of what happens when you don't deal with the deficit. It's not a theoretical issue, let’s look at those countries that failed to deal with it. In Greece where they haven't dealt with the deficit, what did we see? Spending on the health service cut by 36% – that that doesn't help nurses or patients.”
Mr Corbyn had hit out at the Government for finding extra resources for Northern Ireland in order to win the support of the DUP’s MPs while refusing to step up funding for public servants.
“The Prime Minister found £1bn to keep her own job; why can’t she find the same amount of money to keep nurses and teachers in their jobs – who, after all, serve all of us?” he asked.
“The low pay epidemic is a threat to our economic stability,” the Labour leader added.
Scrapping the pay cap and uprating public sector workers’ wages in line with average earnings would cost in the region of £5bn a year, according to projections.
A source close to Mr Corbyn later hit out at the “preposterous” suggestion that Labour’s manifesto plans – which would have hiked taxes and spending by at least £49bn per year – would turn the UK into Greece.
“The situation in Greece is tied up with the eurozone and the management of the eurozone banks,” the source said.
“We're not remotely in that situation. Our manifesto and our pledges were costed, unlike the Government's.”
But the Conservatives said Mr Corbyn’s economic proposals represented a “very real threat” to the country.
A Tory source said: “The point that the Prime Minister was making was that there are siren calls from Labour to abandon any kind of fiscal restraint whatsoever and it's not theoretical what happens when you fail to tackle the deficit and you ignore any attempts to tackle national debt.
“We have seen, as a case study, what happened in Greece, where there was a 36% reduction in health spending and that is no good for either nurses or patients.
“If Jeremy Corbyn's Labour party got a chance to impose its fiscal policies on the United Kingdom, that is a very real threat.”
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