John McDonnell: Intervention key to post-Brexit prosperity

John McDonnellImage copyright
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Britain needs an interventionist government working with the private sector, shadow chancellor John McDonnell has told the BBC.

Speaking on BBC Breakfast, Mr McDonnell said the UK would borrow in the short term for long-term investment and the “prosperity of the future”.

Mr McDonnell said this would trigger investment from the private sector and, ultimately, higher tax returns.

He will deliver a keynote speech at the Labour conference later.

It comes as shadow foreign secretary Emily Thornberry is to promise to replace any regional funding shortfalls in the UK caused by Britain’s departure from the European Union.

Digital advances are encouraging firms to return to the UK but the Conservatives are “too blinkered by their ideology” to take advantage, Mr McDonnell will tell the party’s conference.

Labour, he will say, will not stand by and let industries such as steel flounder.

He will also promise to “work with” wealth creators and entrepreneurs.

Media captionJohn McDonnell says he has an “open door” to former Labour front benchers

In his keynote speech in Liverpool, Mr McDonnell – a close ally of leader Jeremy Corbyn on the left of the party – will commit Labour to supporting major industrial employers and firms in emerging sectors, such as clean energy.

Arguing that the tide has turned around the world against unfettered globalisation, he will claim advocates of the free market will be unable to fully exploit the opportunities presented by the UK’s exit from the EU.

“We need a new deal across our whole economy,” he will say. “Because whatever we do in Britain, the old rules of the global economy are being rewritten for us.

“The winds of globalisation are blowing in a different direction. They are blowing against the belief in the free market, and in favour of intervention.”

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John McDonnell accused the government of dragging its heels on intervention in the steel industry

The future of manufacturing, he will say, lies in collaboration – underpinned by high-skilled labour and high levels of investment – rather than “dog-eat-dog competition”.

Citing the government’s response to the steel crisis, its cuts to solar and wind subsidies and its approach to R&D funding, he will claim only Labour can unlock the true potential of the British economy.

“Be certain the next Labour government will be an interventionist government,” he will argue. “We will not stand by like this one has and see our key industries flounder and our future prosperity put at risk.

“When we return to government we will implement a comprehensive industrial strategy. After Brexit, we want to see a renaissance in British manufacturing.”

‘Entrepreneurial state’

The Labour leadership has alarmed some business leaders by calling for selective nationalisation – including the return of the railways to public ownership – and for business taxes to rise to fund investment and skills training.

But Mr McDonnell – who has previously called for “socialism with an iPad” – will reject claims that the party is anti-enterprise and its approach marks a return to the state planning of the 1970s.

“Our government will create an entrepreneurial state that works with the wealth creators, the workers and the entrepreneurs to create the products and the markets that will secure our long-term prosperity,” he will say.

Mr McDonnell told BBC Radio 4’s Today programme that Labour wanted to “modernise” government.

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Jeremy Corbyn was re-elected with a slightly increased mandate on Saturday

Asked whether the party would fight for the UK to stay in the EU single market, Mr McDonnell said: “We want access to the single market… We want the best deal we can get.”

Pressed further, he said Labour didn’t want to “restrict ourselves at the moment in the discussions that we’re having with our European colleagues”, but he stressed that the party wanted to protect employment rights and the UK’s financial services sector and to “create a new Europe”.

On Labour unity, following Mr Corbyn’s re-election on Saturday, Mr McDonnell said there was an “open door” to “virtually all” of the Labour MPs who resigned from the shadow cabinet to return to the front bench.

He said he thought Labour was working “pretty well” until the mass walkouts and said it was time to “get back to business”.

Mr McDonnell also said he did not anticipate that a reshuffle of Mr Corbyn’s team would happen before NEC discussions about elections to the shadow cabinet had concluded.

‘Turning point’

Allies of Mr Corbyn are pressing him to use his increased authority following his re-election to set out bold policies on the economy and the public services – cementing the party’s anti-cuts agenda.

Speaking at a rally on Sunday evening, shadow health secretary Diane Abbott said anti-austerity was once seen as a “left-wing preoccupation” but was now Labour’s official position and Mr Corbyn’s re-election was a “turning point” for progressive politics across Europe.

Also speaking at the conference, former leader Ed Miliband said the confusion unleashed by the Brexit vote was an opportunity for Labour but only if it spoke for both those who voted to leave as well as remain.

Amid calls for the party to unite behind Mr Corbyn, MPs critical of his leadership said they wanted reassurances that there would be no constituency deselections and at least partial elections to the shadow cabinet.

Ben Bradshaw told activists “we all want unity as long as it’s not the unity of the graveyard”.

John McDonnell: Intervention key to post-Brexit prosperity}

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