Labour promises to 'transform' financial system

Labour promises to 'transform' financial system

Labour will “transform the financial system”, according to John McDonnell.

The shadow Chancellor of the Exchequer promised that if his party is elected in the next general election it will reconnect the financial sector to the economy of research, development and production.

Speaking at the Labour Party conference in Brighton, he said Labour will establish a Strategic Investment Board to co-ordinate the promotion of investment, employment and real wages. 

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He said: “We’ll put taxpayers’ money into key research projects; we’ll foster the creation of networks and clusters of expertise. To reconnect the financial sector to the economy of research and development and production, we will transform our financial system.

“Labour will establish a Strategic Investment Board, comprising the Chancellor, Secretary of State for Business and Governor of the Bank of England, to co-ordinate the promotion of investment, employment and real wages.”

He also added that Labour's investment strategy will see a fairer distribution of investment through the UK and not just focus on London and the Home Counties.

He added it will also devolve decision making through Regional Development Banks, mayors, and regenerate the powers and resources available to local councils.

Mr McDonnell also used his speech today (Monday) to pledge the party’s support for entrepreneurs, small businesses, and self-employed people.

He said: “Ours will only become an economy for the many, if we significantly broaden ownership. That means supporting entrepreneurs, small businesses, the genuinely self-employed and massively expanding worker control and the co-operative sector. 

“Building an economy for the many also means bringing ownership and control of the utilities and key services into the hands of people who use and work in them. Rail, water, energy, Royal Mail- we’re taking them back.”

He also said that if Labour wins the next general election, it will set out plans to eliminate the deficit and reduce debt, based upon its Fiscal Credibility Rule.

He added that to pay for public services, Labour will close tax loopholes and avoidance scheme to ensure the rich and giant corporations pay their way.

Tackling wage inequality will be high on Labour’s list, according to Mr McDonnell. He added that this would be achieved by scrapping the current pay cap and introduce a real living wage of £10 an hour. He added the party will introduce pay ratios at the top and address the gender pay gap, which leaves women’s wages still trailing men’s salaries by 14 per cent.

He said: “Many people are also forced into debt by low wages. It cannot be right that we are the only major developed economy to have grown, while wages are lower than they were before the crash ten years ago. And as inflation hits, many workers are facing yet another real-terms cut in their pay, while the pay of FTSE 100 chief executives is 160 times that of the average worker.”