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‘Ready to build the future’

Shadow chancellor John McDonnell outlines Labour’s economic plans
Hajera Blagg, Monday, September 24th, 2018

Labour’s shadow chancellor John McDonnell asserted that it was “time to shift the balance of power in our country” and “give people back control over their lives” as he addressed the Labour Party conference on Monday (September 24).


In a wide-ranging speech outlining how a future Labour government would re-orient the economy so that it truly represented the interests of ordinary people, McDonnell paid tribute to the trade unions that “founded this party” and told of his aim to take socialism’s “democratic vision even further”.


“In 2018 I tell you that at the heart of our programme is the greatest extension of economic democratic rights that this country has ever seen,” he said.


“It starts in the workplace. It’s undeniable that the balance of power at work has been tipped against the worker. The result is long hours, low productivity, low pay and the insecurity of zero hour contracts.”


Among Labour’s policies that McDonnell highlighted was giving people full trade union rights “from day one whether in full time, part time or temporary work.”


He added that Labour would ban zero hours contracts and introduce a real Living Wage of £10 an hour.


“Wages will be determined by sectoral collective bargaining,” he went on to say. “And yes we will make it a mission of our government to tackle the continuing scandal of the gender pay gap which hurts so many women in our society.”


Inclusive ownership

Turning to corporate governance, McDonnell said that “real power comes from having the right to a collective say at work”, as he outlined legislation Labour would introduce to create an ‘Inclusive Ownership Fund’.


This would require large companies to transfer shares into the Fund which would be held and managed collectively by workers.


“The shareholding will give workers the same rights as other shareholders to have a say over the direction of their company,” he explained. “And dividend payments will be made directly to the workers from the fund. Payments could be up to £500 a year. That’s 11 million workers each with a greater say, and a greater stake, in the rewards of their labour.”


A proportion of revenues generated by these Inclusive Ownership Funds would be transferred back into public services as part of what he called a “societal dividend.”


“We all know it’s not just the employees of a company that create the profits it generates,” he said. “It’s the collective investment in infrastructure, education and research and development that we as a society make that enables entrepreneurs to build and grow their businesses.”


The shadow chancellor pledged to re-programme the Treasury so that the “Treasury bias against investing the regions and nations outside of London” is ended. He reiterated the party’s support for bringing water, energy, Royal Mail and rail into public ownership.


“Some press said the voters would be horrified. They couldn’t have been more wrong,” he said as he pointed to opinion polls showing massive cross-party support for nationalisation of public goods and services.


“But let’s be clear to people,” he added. “Nationalisation will not be a return to the past. We don’t want to take power away from faceless directors to a Whitehall office, to swap one remote manager for another.”


McDonnell announced that he and shadow business secretary Rebecca Long-Bailey would be launching a large scale consultation on democracy in public services.


“We are also setting out our plans for a new publicly-owned water system that puts this essential service back in the hands of local councils, workers and customers,” he added.


Tax avoiders

Turning to tax avoidance, McDonnell denounced businesses that “avoid paying their taxes on an industrial scale” and so deny “our hospitals, our schools and carers the resources they need.”


But he added that Labour cannot and should not wait until it is in government to take action against tax avoidance.


“One way is to mobilise shareholder power to demand companies uphold basic tax justice standards,” he explained. “Numerous institutions from churches to trade unions and pension funds have large scale shareholdings in many of the companies that avoid taxes.


“So today, I’m announcing my intention to bring together these organisations to launch a shareholder campaign. We’ll be demanding companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes.


“The game is over,” McDonnell warned tax avoiders.


Global challenges

The shadow chancellor highlighted the global challenges facing Britons and people across the world as climate change accelerates and major nations are on the brink of a trade war.


“Just as at the Bretton Woods conference in 1944, there is an urgent need to work out if the current international system can cope with these threats,” he said.


“Over the past few decades that system has concentrated power in the hands of an international financial elite. Individuals, communities, and even nation states have been made increasingly powerless.”


In response to this, McDonnell said Labour will be convening an international social forum in the spring, to be led by Nobel Prize-winning economist Joseph Stiglitz, “to bring together leading economists, politicians and civil society representatives, launching a dialogue on the common risks we face and the actions we need to take.”


Turning to Brexit, McDonnell said that the Tories’ failures to date “have been in plain sight.”


“I just say to the Tories, in the interests of our country get out of the way and let us get on with securing a way forward,” he said to applause. “A way forward that will protect our economy, our jobs and standards of living for our people. If they won’t do that then, you know my preference, let’s have a general election.”


The shadow chancellor called on conference to be bold and aim for “real change.”


“The greater the mess we inherit, the more radical we have to be,” he said, “The greater the need for change, the greater the opportunity we have to create that change and we will.”


He added that the Tories “fail to understand that we have an unwavering faith that together people can change the world. They need to understand we will not settle for anything less.”


Concluding to a standing ovation, McDonnell said the party was ready for the next general election, whenever it may come.


“Bring it on,” he said, adding that the Labour party was “ready to campaign for victory, ready for government, ready to build the future.”


Unite general secretary Len McCluskey hailed McDonnell’s speech.


“So many fantastic commitments by John McDonnell which will improve the lives of and empower working people,” he tweeted. “His commitment on sectoral collective bargaining will be music to Unite members’ ears.”


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