Shadow chancellor John McDonnell has vowed to shift power away from the City of London and Whitehall to the regions through measures including setting up new regional development banks.
A Labour government would launch a £250bn investment programme to support transport infrastructure, cheap low-carbon energy, superfast broadband and HS3, McDonnell announced at the Labour Party Conference this afternoon. Regional development banks would be set up to “allow regions to take control” of investment decisions and create a “new more productive economy,” he said.
City warning
McDonnell warned the City and financial services sector that while Labour would support continued access to EU markets in Brexit negotiations, the party would not support firms which delivered benefits for only “a few” and not “the whole economy”.
He said: “We will support access to the EU markets for the financial sector. But our financial services must understand that 2008 must never happen again.
“The message is clear to them: We will not tolerate a return to the casino economy that contributed to that crash ever again.
“We will support financial services where they deliver a clear benefit for the whole economy not just a few.”
No more Philip Greens
Retail tycoons Sir Philip Green and Mike Ashley were singled out as examples of business leaders Labour would not support.
“Under Labour there will be no more Philip Greens at all,” McDonnell said, before announcing Labour would introduce legislation to ban companies from “taking on excessive debt to pay out dividends to shareholders”.
Labour would “rewrite the tax takeover code”, making sure every company takeover has a “clear plan in place to protect workers and pensions”, McDonnell said.
He vowed to “at least double” the co-operative sector in the UK so it matches those of Germany and the US.
Pledging to shift power from investors to workers, he announced that Labour would introduce a “real living wage” with a taskforce to determine the level necessary for a “decent living life”.
Independent forecasts have suggested a wage of over £10 per hour, he said. Labour was interested in introducing a universal basic income and would repeal the Trade Union Act, he said.
Tax-dodging crackdown
McDonnell accused “the largest firms in the City of London” of being “up to their necks” in tax avoidance.
He said: “HSBC alone accounted for 2,300 shell companies established to help the super-rich duck their taxes. In government we will end the scourge of tax avoidance.”
He announced Labour would create a new tax enforcement unit at HM Revenue & Customs, doubling the number of staff investigating “wealthy tax-avoiders”.
Further measures to crackdown on tax avoidance would include banning tax-dodging companies from winning public sector contracts and ensuring all British Crown dependencies introduce a “full public register of owners and beneficiaries”.
“We will throw light on where the tax dodgers are hiding their money,” he said.
Interventionist government
“Be certain: The next Labour government will be an interventionist government,” McDonnell said.
“The old rules of the economy are being rewritten,” he added, noting a shift away from free markets to a belief in government intervention.
Mirroring prime minister Theresa May, he said Labour would support a “comprehensive industrial strategy” alongside a “renaissance in British manufacturing.”
Reaction
Alexandra Jones, chief executive of Centre for Cities, said: “John McDonnell is right to call for places across the country to be given more powers and control to grow their economies and attract investment. However, the best way Labour can support that is by giving its full backing to the new metro mayors due to be introduced in England’s biggest city-regions next year. Rather than creating multiple new institutions to support devolution in those city regions, Labour should argue for the new mayors to be given the full range of powers and funding they need to address the issues that matter most to jobs and economic growth.”
• To send feedback, e-mail louisa.clarence-smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette
