So are Labour really planning to print all that money?
No, which makes Mason's claim a bit odd. In July McDonnell outlined plans to ”mobilise" £500bn in infrastructure spending. He said this would be comprised of £250bn of government capital spending over 10 years and £100bn of state investment in a new publicly owned national investment bank and a new network of regional state-owned banks.
These banks would then borrow from the private capital markets to turn the £100bn of government capital into £250bn of lending to infrastructure projects.
So the government would have to borrow £350bn then?
Not necessarily – or at least not all of it. The £250bn of direct capital spending would be spread over 10 years. So that's £25bn a year, which is actually less than the roughly £80bn of gross public sector investment (£32bn excluding capital depreciation) that the Conservatives are currently forecast to spend in 2019-20.
However, if the state's budget deficit is not zero when Labour implemented this plan and they also tried to capitalise the new national infrastructure bank relatively rapidly then, yes, they would probably have to borrow from the capital markets by issuing new government bonds, or gilts.
So is it a reckless plan, or ”la la land" as the Daily Mail put it?
Not really. The Government's own national infrastructure plan identifies £483bn worth of projects that need investment by 2021, including massive new road, rail, sewage, housing and broadband investments. Many economists – including bodies such as the International Monetary Fund – argue that the UK has under-invested in infrastructure in recent decades.
