John McDonnell MP asks the Chancellor to apologise to the British people for the utter failure of this Government’s economic policies and for the pain he has inflicted on this country

This morning, the Prime Minister called a general election. She has blamed Brexit, she has blamed our European neighbours, she has blamed the parties on these benches, but the real truth is that after seven wasted years of economic failure under the Tories:

• They have failed to close the deficit
• They have added £750bn to the national debt
• Pay is falling behind prices
• 4 million children are growing up in poverty
• Our schools are in crisis
• Our prisons are in crisis
• There's more people than ever on NHS waiting lists
• More families are homeless
• More elderly people are not getting the care they need

We need a Labour government to rebuild and transform Britain.

I’m delighted to be standing again as the MP for Hayes and Harlington. It’s a real privilege to represent our community in which I have lived for 40 years and brought my family up in. I’ve worked hard for my constituents in Parliament for the last 20 years and I hope to be elected again to continue this work.

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Labour launches Pensioner’s Pledge Card

Coventry.jpgSpeaking today (Wednesday 12 April) on a visit to an arts and crafts exhibition at Age UK Coventry’s Craft and Computer Centre, John McDonnell, the Shadow Chancellor and Debbie Abrahams, Shadow Work and Pensions Secretary, launched Labour’s Pensioner’s Pledge Card. 

The Pensioner’s Pledge Card lays out Labour’s four promises to protect older people in our communities:

  • Protect pensioner incomes by legislating to keep the Triple-Lock on state pensions up to 2025

  • End Tory unfairness on the women’s pension age, compensating those worst affected

  • Protect the pensions of UK citizens living oversea

  • Keep the Winter Fuel Allowance and free bus passes for pensioners 

Alongside the pledge card, Labour will publish new analysis from the House of Commons Library showing pensioners will be at least £650 better off by the end of the next parliament from keeping the triple-lock. 

Highlighting an increase in pensioner poverty over the last year, Labour will also commit to compensating women worst affected by the Government’s speeding-up of the state pension age; protecting pensioner benefits and protecting the pensions of UK citizens living abroad. 

John said “ I am delighted to be launching this pledge card that will inform many elderly people in our communities that Labour is not only promising to stand up for pensioners; but is determined to ensure they keep the hard-won entitlements they currently hold. 

It’s a national scandal that pensioner poverty is rising and the Tories are refusing to commit to keeping the triple-lock or compensate women worst affected by the speeding up in the state pension age. 

Only a Labour Government will stand up for pensioners and protect them throughout the next parliament.” 

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Libor rigging – schools, hospitals, local councils all potential victims – Shadow Chancellor demands compensation for public bodies

Local councils, NHS hospitals and schools engaged with PFI contracts, derivatives linked to Libor and day-to-day borrowing could be large scale victims of Libor rigging.

Yesterday, Shadow Chancellor, John McDonnell MP, called for the Chancellor to establish a public inquiry into the scandal. He is today demanding an independent assessment of the losses to public bodies and that where losses are identified as a result of Libor rigging, they must be made good by the banks.

Revelations by the BBC's Panorama programme concerning the involvement of the Bank of England and senior officials from major banks in the rigging of the Libor index raise urgent questions for the Bank of England and the Government:

- Did senior Bank of England officials, in allegedly applying pressure to banks to lowball their reported borrowing rates, act with or without the knowledge of Treasury officials and ministers?
- Was the Bank or Treasury aware of the potential costs to public authorities as a result of lowballing?
- How many public bodies have losses arising from their purchase of Libor-linked derivative products, and what are the scale of those losses?

John McDonnell MP said:

"This is now a matter of utmost concern that gets to the heart of failings in our banking system. Did senior officials at the Bank of England, with or without government encouragement, knowingly cause public bodies like NHS hospitals, schools and local councils to suffer potentially major losses?

My concern is that local councils, NHS hospitals, and schools could have paid a huge cost for the Libor rigging scandal. We need to know exactly what went on, what was the impact on public finances and who was responsible. Above all else if local councils and other public bodies suffered losses then the institutions responsible should pay them back for those losses."


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John McDonnell Criticises Government Tax Changes

Labour research reveals that the Tories’ tax changes that came into effect on 1 April will see £2.5 billion in tax giveaways alone handed out to big business and a wealthy few in 2017/18.

The figures also reveal that by 2022, Tory Tax giveaways that came into effect on 1 April could total around £20 billion, which includes over £2 billion in corporation tax giveaways to big corporations like Google in the next year alone.

These changes will take place at the same time as the Government goes ahead with billions of pounds’ worth of cuts to low income working families on in-work benefits.


John said: “This April the Tories are taking working families for fools by thinking they can hand out billions of pounds in tax giveaways to big business and the super-rich and expect no one to care, while at the same time cutting in-work benefits to the low paid.

“These figures show the true priorities of Theresa May and Philip Hammond. They refuse to ensure that big corporations like Google pay their fair share, while they are handing out huge tax giveaways worth billions, and cutting the incomes of low paid people in our country.

“Only Labour will create a fair tax system: one in which all big businesses pay their fair-share and working families are supported by ending the tax giveaways at the top, bringing in a £10 an hour Real Living Wage by 2020, and reversing the cuts to in-work benefits.”

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John McDonnell MP, Labour's Shadow Chancellor, commenting on a series of ONS economic releases today, said:

Today’s data exposes the underlying weaknesses of the UK economy and highlight the concerns Labour have been raising for some time.


Growth is modest and led by consumer spending. Production and construction were broadly flat in January and the service sector saw a decline in output.  


With business investment falling for the first time since 2009 and a squeeze on real wages and consumer spending because of rising inflation, is it clear that consumer spending alone will not be able to power the economy indefinitely.


Working people in Britain face difficult times ahead. So far, the Tory Government has been remarkably complacent in addressing the serious structural weaknesses of the UK economy. 

Only Labour, with a proper industrial strategy, and a plan for a high-investment, high-skill and high-wage economy will confront the challenges facing the UK economy and deliver for working people

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John McDonnell MP, Shadow Chancellor Comments on Banks ‘dirty money’

John McDonnell, responding to the Guardian revelations that some British banks were involved in the laundering of hundreds of millions of pounds from Russian criminals, said: 

This scandal needs to be investigated in full by the National Crime Agency, and the government must ensure they have all the resources and support needed. Britain cannot be a haven for the criminals of the world who are looking to hide their money. 

It’s deeply disappointing that there are British banks involved in yet another banking scandal as the actions of a few shouldn’t overshadow the hard work of the thousands of employees in the sector who will have had nothing to do with this case. But it appears that some of these big banks haven’t learnt the lessons of the past, and are clearly not doing enough to clamp down on financial crime and money laundering. 

The government’s overall approach to the banking sector is one that has seen them handout billions in tax giveaways that favour the big banks over the challenger banks, and pursue a ‘light touch’ approach to regulation that borders on a return to the bad old days before the crash. Now we know the date for when Article 50 is to be triggered, we need clarity from the government that this scandal is not a glimpse into the future of what a Tory Banker’s Brexit will resemble. 

It is scandals like this that only further support the case for Labour’s Tax Transparency Enforcement Programme to ensure that there are no more hiding places for the super-rich to dodge paying their taxes, or to hide proceeds of crime. If the Tories will not act to clamp down on such acts, then the next Labour government will make them a thing of the past.

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John McDonnell MP, Labour's Shadow Chancellor, responding to the Government's u-turn on its £2 billion NICs rise in the Budget last week, said:

This is a humiliating reversal for the Chancellor forced upon him by Labour’s opposition. His authority is now shredded after just one Budget, and he tore up a manifesto commitment to do it.


We welcome the Government's decision to finally listen to Labour's calls made in Jeremy Corbyn’s Budget response along with those of business groups like the Federation of Small Businesses to not go ahead with an unfair £2bn tax rise on low and middle earners. But they should never have been placed in this position to start with, and now we face yet another Tory Budget only a year on with a blackhole in the billions. In 2015, we had the tax credit shambles. In 2016, we had Personal Independence Payments reversal. Now in 2017 we have the u-turn on National Insurance Contributions.

There will be millions of working people who are now breathing a sigh of relief, but it is the Chancellor who should be holding his breath as this episode throws up urgent questions that he and the Cabinet must now answer. 


Did the Prime Minister or the rest of the Cabinet, who must have seen the Budget in advance and known this measure was to be implemented, raise their concerns with the Chancellor before he announced it, worrying millions of families? It was in the weekend papers before the Budget so they can't say they were unaware it was to happen.

This is also the second year we have had a Tory Budget with a black hole in it worth billions. This is not acceptable. What will he do to fill the shortfall in a Budget he delivered less than a week ago without pursuing unfair tax increases or further cuts to public services? As the Budget will still see working people £1,400 worse off under the Government.


On the day the Brexit Secretary has admitted that he hasn't looked into the costs of the Prime Minister's negotiating strategy, this is yet more proof that there is disarray at the top of a government clearly making things up as they go along.

We need answers from the Chancellor and accountability at the top of government. In no workplace would such practices be allowed to continue, and it should not be allowed from those responsible for the public finances. Labour’s new roundtable on self-employment will bring together business organisations, trade unions and self-employed groups to lay out a serious and realistic strategy to provide a fair deal for the self-employed at a time of major labour market changes. We are proud to be the party of working people, small businesses, and the self-employed.”

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John McDonnell MP, Labour’s Shadow Chancellor, responding to the Budget, said:

Philip Hammond has used his first Budget to claw £2 billion in tax on those self-employed who are on low and middle incomes. But he continued to boast about the £70 billion worth of tax giveaways at the top announced by his predecessor.


Labour will oppose this unfair £2 billion sole traders tax on the self-employed low and middle earners. 


Rather than provide the funding that would end a social care crisis in which 1 million vulnerable people go without adequate care, or calling an end to the state of emergency in our NHS, the Tories are doing next to nothing and don’t seem to recognise the scale of the crisis they have created.


The Tory rigged economy continues for households in our country, who face being £1,800 worse off by the end of the forecast period, and if you are on the National Living Wage by the end of this parliament you face a 25p per hour cut.


This Budget does not address the problems created by seven years of Tory failure, and it has failed the fairness test for women who will be hit by a cuts in public services, and the national living wage.


Instead of equipping our country for Brexit, he is building our economy on sand, and the little he has announced today will mean we are less prepared for the challenges we face outside of the EU.

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John McDonnell's interview with Andrew Marr


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John McDonnell's Pre Budget Speech 2017


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What does the Leadership of the Labour Party Stand For EL4C Video

Very good video from Ealing Labour 4 Corbyn. 


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Labour caught in struggle to survive media attacks, says John McDonnell

Anushka Asthana and Heather Stewart

Friday 3 March 2017 19.34 GMTLast modified on Friday 3 March 2017 22.01 GMT

jmcd_4032017.jpgJohn McDonnell says that the Labour leadership has been embroiled in a “360 degree struggle to survive” in the face of repeated
attacks in the media and anonymous briefings.

In an interview with the Guardian, the shadow chancellor said his team had been involved in a daily battle against critics who have “been coming at us”, making it more difficult to get the message about their policy ideas through to the public.

He claimed that powerful figures were determined to destroy a socialist Labourleader who wanted to radically transform society and shift power to the people.

“So that’s exhausting: you spend your time having to rebut stuff continuously,” he said, singling out oligarchs that own newspapers as well as the Guardian.

In a wide-ranging discussion before Wednesday’s budget, McDonnell also said:

  • Labour’s byelection loss in Copeland had left the party looking “over the cliff edge” and that now was the time to step back and unite.
  • Jeremy Corbyn should have been widely praised for his strong leadership in placing a three-line whip on Labour MPs to vote for article 50, arguing that failing to do that would have meant a “Ukip MP in Stoke at the moment”.
  • Philip Hammond ought to place the vast bulk of an extra £12bn expected to be available as a result of strong tax receipts to plug a gaping spending gap in social care and the NHS.

McDonnell said the chancellor would have to “dig himself out of a hole” over changes to business rates that triggered a backlash among Conservative MPs on Wednesday. He argued that challenges for hospitals, councils, prisons and schools ought to be the priority. “Public services are collapsing around his ears,” he said.

“In the real world, all of a sudden, NHS in crisis, patients on trolleys, social care nightmare, school budgets cut for the first time since the 1970s, prisons in riots. You look across the whole of the public sector and it’s imploded”.

People were “suffering out there”, McDonnell said, worse than anything he had seen in 30 years in politics, adding that 79% of austerity measures were still to come and that 86% of them hit women hardest.


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Shadow Chancellor’s speech to the Engineering Employers’ Federation

eef.jpgWe are meeting just a few weeks ahead of the Budget and, more significantly, perhaps just a few weeks from Article 50 being signed and Britain beginning the process of leaving the European Union.

Labour voted to give the government authority to begin that process, but we have not handed them a blank cheque. The next two years or more will involve intense negotiations and scrutiny of the government and other positions. But more than this, I believe they will involve a significant national conversation about the kind of society and economy we want to live in.

Amongst all the many interpretations of the vote to Leave the EU, it is clear to all sides that it was a vote for change. The status quo is no longer an option. We have to now do things differently from the past.

That means a recognition once more that securing the prosperity of our manufacturing sector is the key to securing the prosperity of the wider economy. Labour will place support for our manufacturing sector at the centre of its approach to Brexit, and at the heart of its economic policymaking.

Current failures

It was obvious even before the Brexit vote that our economy was not functioning as it should. Productivity growth has stagnated. Since the crash, it has been too easy for some employers to substitute cheap labour for capital investment. The result has been a proliferation of jobs – but a collapse in wages. Real hourly pay is still 10% below its level of a decade ago.

Mark Carney, governor of the Bank of England, has called this a “lost decade” for living standards. It is unprecedented in British history – at least since the industrial revolution. And with prices set to rise as the fall in the value of the pound feeds into the economy, the squeeze on living standards will get tighter and tighter.

It’s Labour’s belief that if we are to going to prosper as a country after Brexit, we need a sharp change in economic direction. If we are to create a fairer and more prosperous economy after Brexit, manufacturing will have to have a central place. It is manufacturing that reliably creates the well-paid, secure jobs– and not just concentrated in a few hotspots, but spread throughout the country.


Because we have reached the end of the line for the old economic model.

For many of those communities who voted Leave, it has been thirty years of neglect and decline. Of seeing solid jobs in manufacturing and industry replaced by work that is too often insecure and poorly-paid. We shouldn’t tolerate a situation any longer where a few, privileged centres grow at the expense of the rest of the country.

The decade since the financial crisis has drummed home this point. The crisis was centred on the catastrophic failures of a few, London-based institutions. Management was poor, and regulations failed to work as they should. The bonuses paid out by major financial firms didn’t end up spent in Stoke or Hull. They stayed in London. But when the bubble burst, the whole country had to carry the losses.

The profits went to a few. But the pain of austerity has been felt by the many. The injustice of this should be apparent. Parts of the country that had never been part of the good times during the bubble were now being asked to cover the costs. They have paid, and paid again, for nearly seven years.

It should be no surprise that for many in those forgotten places took the chance to give the whole system a kick. That kick contributed to the Brexit vote.

Like yourselves, Labour campaigned to stay in the EU. We argued that the risks of an exit, particularly under this government, were too great. However, the vote was to Leave. Labour respects that decision as a fundamental democratic choice.

But it is essential we fight for the best possible Brexit – one that protects jobs and living standards above all else. People voted to Leave the EU, but I don’t believe they voted to lose their job, or trash the economy.

So we have insisted, as soon as the vote was declared, that the government observe clear red lines in its negotiations with the EU. These are to protect jobs and living standards.

It’s essential instead that we develop a broad national consensus on how the negotiations should be conducted.

If we believe that manufacturing is essential to securing a fairer and more prosperous economy after Brexit, that consensus on negotiations should place the needs of manufacturing at its centre.

Single Market access

Labour is absolutely committed to securing the fullest possible access to the Single Market for goods.

The case for a comprehensive free trade agreement with the EU that would continue to allow manufacturers here to access European markets at minimum cost is overwhelming.

The damage done not only to the markets for final output, but to extended, Europe-wide supply chains from a failure to secure this deal could be enormous. UK manufacturers are tightly connected to European supply chains.

Of the goods and services we export, twenty three percent of their value is accounted for by the imports needed to make them. This is far higher than for countries like Japan or the US, where just 15% of export value depends on imports.

Imposing tariff barriers would tear up those extended supply chains. It could mean a sharp increase in costs for manufacturers, hampering British competitiveness.

Yet the government, and government ministers, appear to believe they can, if pushed, simply walk away from whatever deal is on the table in favour of the fallback option of the WTO.

Not only are the costs, particularly to manufacturers, likely to be high, negotiation over WTO schedules will still entail a lengthy process of discussion with the EU and others. As a negotiating position, these attempts to play hardball simply do not work. It’s a bluff, and it will be seen as such across Europe.

Far better to adopt the approach that, whilst the UK has voted to Leave, we want the best possible relations with our European partners to continue. It will be a different relationship, of course. But it cannot be one based on mutual distrust.

Later this week, Labour will be hosting a conference in London of European social democratic parties to discuss Brexit and the EU. A process of discussion and mutual agreement where possible is far better than the phony tough posturing adopted by this government. That’s the approach to negotiations we favour.

It’s on the basis of a recognition of mutual interests that we can secure the best possible access to the Single Market for goods. There will be trade-offs, of course.

But if the aim is to protect jobs and living standards in the UK, the widest possible Single Market access for goods is the best available outcome. And that applies for the whole of the manufacturing sector. Labour does not believe in creating special deals for favoured parts of the economy. So we need a trade deal that works for the whole of manufacturing.

Any future deal with the EU should seek to keep tariffs on goods where they are presently: zero, as in the existing Customs Union arrangements. There is no good case to be made in favour of tariff walls between European countries, at similar levels of development, particularly where supply chains might be placed at risk.

We recognise that with more than half the UK’s exports now going to the rest of the world, whatever opportunities exist to strike specific deals would also need government to deal with the risks of leaving the Customs Union. We should maintain a sense of realism about the immediate possibilities.

Signing comprehensive Free Trade Agreements will be a long process, since it is essential to get the details right. Government ministers should not encourage illusions that quick deals will be best for Britain. It is more important to get the right deal, than to get a quick deal.

We want a future trading system that will allow manufacturers the freedom to establish their own supply chains and open new markets, whilst protecting jobs and rights in the UK. And as part of that freedom, Labour will continue to support the right of British manufacturers to employ whoever they think is best for the job.


EU migrants have made and will continue to make a huge contribution to this country. In particular, we know that many of you rely heavily not only skilled workers from across the Continent, but also on less skilled labour. The ability for manufacturing employers to tap into this pool of labour is an obvious strength for them. But the right to freedom of movement that creates this strength will be directly challenged by Brexit.

Labour backs fair rules and reasonable management of migration in the best interests of the economy and society. They have attempted to use EU migrants as bargaining chips in Brexit negotiations. As a bargaining position, the government’s posturing makes little sense.

There are 1.5m British citizens resident in the rest of the EU whose rights in turn can be put on hold. Our European partners understand this and will not be swayed by attempts at tough talk from London.

The sooner the situation is resolved with a clear and unambiguous statement that EU migrants currently resident here will have their rights protected, the sooner the negotiation process can move on. That’s not only the principled position to take. It’s also popular. And it’s economically the most sensible, since it guarantees those currently in work can remain in work, and plan for the future.

Industrial strategy

The challenge in Brexit is not only in how we approach the negotiations. It is also in how we transform the operations of our domestic economy. It has been pleasing to see some movement in this government’s rhetoric on the economy over the last year.

The recognition that a modern industrial strategy should be central to how governments conduct economic policy is very welcome. The recent green paper, unfortunately, fell far short of what was required. It offered plenty of evidence of the need for a strategy – some of it damning. The major global trends are now clear.

After years of declining manufacturing employment across the developed world, “re-shoring” is now well established. One in six manufacturers now report bringing some production back to the UK. It is clear why this is happening.

Proximity to major markets and access to skilled labour are both prerequisites for manufacturing success today. But the economies that are navigating this switch are those with governments prepared to properly support their manufacturing sector.

When the steel crisis broke out last year, governments across the developed world moved quickly to intervene. The US increased some tariffs on Chinese steel to 266%. Germany increased its subsidies. Italy nationalised a producer. At the EU level, attempts were made to impose tariff barriers against the dumping of cheap steel.

In all these cases, governments recognised the need to move swiftly and defend a foundational industry. It is simply not possible to run a modern, developed economy without a steel industry. And whilst the crisis in British steel has eased, significant uncertainties remain.

A comprehensive industrial strategy would place steel and other foundation industries like chemicals at its centre. It’s no longer good enough, post-Brexit, for governments to hide behind State Aid rules as an excuse for shoulder-shrugging.

This government, like others in the developed world, should be prepared to intervene to support essential production. That means action on procurement to sustain supply chains and create markets, using government’s own purchasing power to buy domestic steel and industrial products. But it’s not just defending existing and essential industries. It means supplying the cheap, long-term loan finance that meet the potential of our smaller firms.

That’s why Labour is committed to setting up a National Investment Bank and regional development banks, charged with delivering financing to small and medium-sized firms in particular. The inability of smaller firms to access the finance they need for growth has held back their potential.

And the concentration of lending by our existing financial system in London has meant the rest of the country has lagged behind. Labour will correct this bias. We want to see smaller firms, especially in manufacturing, across the whole of the country.

We can build on the success that is already out there and develop a ‘British Mittelstand’: high-investment, high-productivity smaller firms that provide high-quality employment in those sectors where we have the greatest potential, like high-value added manufacturing.

There is the potential here, as the fourth industrial revolution gets underway, for a manufacturing renaissance that can transform the potential not of those places and regions already succeeding, but of those areas that have been left behind for too long.

Training and skills are an essential part of that. Over a third of manufacturers are still struggling to recruit because applicants lack the relevant qualifications.

We have supported the Apprenticeship Levy because we recognise that high-quality training requires funding. But like you we have raised concerns both about how it has been applied and, more generally, about the quality of training provided.

There are steps to be taken here in tightening up the provision and monitoring of apprenticeship training, including ensuring the new Institute for Apprenticeships and Technical Education is up and running promptly.

More generally, the approach from government has to recognise that vocational and more academic training enjoy a parity of esteem. There is no place in a modern economy for the old blue collar versus white collar distinction. This isn’t simply a point about equality. It’s a hard-nosed recognition of the fact that advanced manufacturing requires advanced skills.

Labour is developing its own industrial strategy as part of our new economic offer. The response to the consultation has been overwhelming, and positive. As we move forward and develop policy, we want to make sure you are involved at every step of the way.


This years’ Budget, due in just a few weeks, could be an opportunity for government to address the concerns of our manufacturing sector. Unfortunately, the signs so far are not promising.

A small amount of additional funding was pledged for public investment by the Chancellor at the Autumn Statement. This was not even close to matching the levels required to drive up research and development spending to the levels of successful advanced manufacturers like Germany or Sweden. And it scarcely undid the damage of the £1bn real-terms cuts in R&D spending the previous Chancellor had allowed.

Labour is committed to achieving the OECD target of 3% of GDP spent on R&D, from all sources. We’re committed to keeping in place those mechanisms that help the private sector, like R&D tax credits. And we’ll make good any loss in EU funding for research, whilst pushing for a deal that maintains essential Europe-wide research and safety arrangements, including UK membership of Euratom.

But we also recognise that serious, long-term commitments to research and especially on the development and application of scientific research will require public funding. That commit to invest goes further.

Broadband provision in Britain remains inadequate for a modern, developed economy. It has to be considered an essential part of modern infrastructure. Labour has committed to the delivery of a fully-fibre optic broadband connectivity, across the whole country.

As part of our commitment to investment, we will in government deliver the funding needed to accelerate fibre to the premises, prioritising areas of clear business need.

Business rates

The business rates system is frankly a mess. The revaluation of rates has been exceptionally poorly handled, landing unfair and unsustainable increases in business rates on smaller businesses.

The instability of periodic, sudden revaluations creates instability that is debilitating for many businesses. Rates need to be adjusted in a way that gives business more predictability.

The current system penalises businesses for investing in the machinery and other capital that our economy desperately needs is self-defeating and out of line with other countries.

This is the very opposite of what a tax system should do. The clamp down on appeals is unfair as leaves businesses without recourse when rates are valued unfairly.

The government have repeatedly cut corporation taxes while leaving our business rate system in disarray. This disproportionately helps the largest businesses and harms the smallest.

Labour is calling for an overhaul of business rates to help manufacturing. We’ll be bringing forward our own proposals ahead of this year’s Budget.


The years ahead will be challenging for this country, but they will also contain opportunities. But if we are to take them we cannot settle for the status quo. If we want to continue to prosper as a society, and make sure that prosperity is more fairly shared, the old rules of the economy have to be written.

Manufacturing will be central to that transformation. It is where the high-quality, secure, well-paid jobs will be found.  It is the lever by which we can lift all parts of the country into sharing wider prosperity. It will need a government prepared to intervene and support the sector. Where a renaissance in manufacturing can deliver prosperity for all.

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John McDonnell MP, speaking at the Open 2017: Platform Cooperatives conference at Goldsmiths University in London today, said:

“The discussion of the challenges for the modern world of work posed by the so called ‘gig economy’ are nothing new. They represent an age-old threat to diminish the hard-won workplace rights, terms and conditions offered by full-time employment.


“However, as technology changes so too does the nature of the threat to job security in the new world of work. That is why it’s exciting to see the ideas and the discussions on how we can help build the economy and society of the future that secures sustainable, well paid jobs. 


“Rather than running away from innovation and technological advances, we need to see where we can use them to adapt to the challenges they may present to full-time work. 


“The power that these changes in technology give us all is the ability to pool our collective talents and skills and produce wealth not just for the benefit of a tiny handful at the top, but for all of us. It can help us mitigate the potential growth in the ‘Uberisation’ of the workplace.


“Digital technology means there is no longer a convincing reason to allow the wealth of society to be taken by a tiny elite, instead of shared for the many. The old rules about the supposed efficiency of the free market and the private firm are being rewritten right in front of us.


“That’s why the next Labour government will be completely committed to fixing our rigged economy and promoting the co-operative ownership of the wealth we produce, doubling the size of the co-operative sector. We’ll support the development of platform co-operatives instead of allowing new technologies to be exploited for the benefit of an elite few.


“The new National Investment Bank and network of regional development banks will be tasked with supplying the funding to help support a new generation of co-operatively owned Ubers and Airbnbs.”

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John McDonnell MP, welcoming the publication of Labour’s independent Kerslake Review into the Treasury this morning, said:

 “I welcome this report, which has been produced by some of the leading experts in our country who have worked closely with the Treasury. Labour will be responding in full in the coming weeks to the review.


"Labour asked Sir Bob Kerslake to head up a review into the Treasury because we needed to have a serious and thorough examination of one of the most important pillars of government, and the cornerstone of economic policy making in our country.


"The Treasury is our most important economic policymaking institution, but one that has been criticised by some for its approach and attitudes.


“This review will help shape Labour's economic policy, as well as being a first important step in setting a new direction for the Treasury in the 21st Century. The views of the former head of the Civil Service are ones that should be taken on board right across the economic and political spectrum in our country.


"As Sir Bob has made clear, we need the Treasury in the 21st century to be not only able to meet the big challenges of the day such as Brexit, but also one that focusses on all corners of our country, so that no one and no community is left behind. Therefore, I am deeply concerned that the review has raised this as areas which need reform.


“Given the severe challenges that our economy and our country face in the coming years, it is vital that we have a Treasury that is up-to-speed and is able to match them. The next Labour government will need to deal with many of these challenges, with what by then could potentially have been 10 years of Tory economic failure, and it will fall to us to ensure that the Treasury is ready and properly equipped for the 21st century.


“I am are deeply grateful for the contribution from all the independent members of the review’s panel, who represented many different fields of expertise, and who gave up a considerable amount of their time to take part. And I would also like thank Sir Bob Kerslake for his time, energy and expertise in producing this report for Labour.”


Lord Kerslake, former head of the Civil Service, who headed up the review, said:


“The Treasury is a small but very powerful department. To make the most of its very capable staff, it needs to fundamentally change both what it does and how it does it. It should focus on its core economic and financial roles and work in a much more open and collaborative way. The impact of Brexit reinforces this need for change”.

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Labour sets up 'working group' to investigate universal basic income, John McDonnell reveals

independent_article.jpgLabour has set up a “working group” to investigate the radical idea of a basic income and will report back on its conclusions before the next general election, John McDonnell has said.

In an exclusive interview with The Independent the Shadow Chancellor appeared to signal his desire to bring basic income in the party’s manifesto. The concept involves overhauling the welfare state and ditching means-tested benefits in favour of unconditional flat-rate payments to all citizens.

During the summer of 2016 Mr McDonnell, who has been the MP for Hayes and Harlington since 1997, suggested he could “win the argument” on basic income within the Labour party but now he intends to publish a report on the idea with Guy Standing, one of his economic advisers and a founding member of Basic Income Earth Network – established in 1986 to encourage discussion on the topic around Europe.

Speaking about the idea – floated by Benoit Hamon during the socialist primaries of the French presidential elections – Mr McDonnell added: “Interestingly, [Narendra] Modi’s government has brought forward a report in India as well about the need to develop basic income ideas and again see how they can implement it over a period of time. All of a sudden it’s become… an idea whose time may well have come.

“We’ve set up a working group,” he added.  “Jonathan Reynolds in my team is now leading on that. We’re working with Guy Standing, one of our economic advisers. What we’re going to do with that again is bring forward a publication and then tour around the country and have discussions with people around that. It’s interesting – the winds have sort of taken in the sails of basic income at that moment.

Asked whether he thought it was still a credible idea, he replied: “We’re exploring it. We think there are elements of it that we can bring forward as first steps towards a basic income that people can support”.

“I was involved in the early campaigns many years ago on the development of child benefit – at that point in time there were all sorts of anxieties about whether you could bring forward a benefit for everybody that wasn’t based upon an assessment of need and we won the argument. I think child benefit is like one of the foundation stones of a future basic income.

His comments come before he appeared alongside his long-time comrade Mr Corbyn in Liverpool on Saturday to launch a series of regional economic conferences, aimed at addressing the regional investment imbalance in the economy. “It’s pretty stark what’s been happening over a period of years especially under this Government, is the lack of investment particularly in the North,” Mr McDonnell added. He’s anxious over what he describes as a potential “bankers’ Brexit” – a deal at the expense of the wider economy for a special settlement to be done with the City of London.

He also vowed to deliver a “Crossrail for the North” with a series of major upgrades to east-west transport links. A new “High Speed 3” rail link would transform the economy of northern England, creating 850,000 additional jobs by 2050.


Ashley Cowburn, independent, 5th February 2017


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Labour's first regional economic conference takes place in Liverpool

At Labour's first Regional Economic Conference in Liverpool I set out how the next Labour government will close the gap in public investment between the North and the South. The day was hugely successful with  substantial participation from delegates. There were good common sense ideas and discussions in the workshops.  If you would like to contribute to the plan on line please click here. 



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Local MP Calls for Action to Refurbish Local Heritage Building – The Dower House, Harlington

dower_house.jpgLocal MP John McDonnell said “7 years ago, after a failed planning application, the Dower House was severely damaged. Seven years on the Dower House remains derelict and despite the local council’s talks with the owner, no remedial works have been undertaken.

This once beautiful historic building remains an eyesore and at risk of further deterioration. Local residents and I have written to the owner calling upon him to start work urgently on refurbishing this once beautiful building which is an important part of our local heritage”

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Labour will fight against May's 'reckless Brexit', says John McDonnell

John McDonnell, the shadow chancellor, has promised that Labour will fight against Theresa May’s pursuit of a “reckless Brexit” after the party was whipped in favour of giving her the power to trigger article 50.


Jeremy Corbyn’s closest ally said the party would not give the prime minister a “blank cheque for what others call a hard Brexit and I think is a reckless Brexit”.


“We are all uncomfortable with the position, we campaigned to remain, but we are democrats and have respect the will of the people,” he told BBC Radio 4’s Today programme on Thursday.


McDonnell said Labour would come together as a party to shape Brexit, after 47 MPs defied the party whip to vote against triggering article 50, which begins the formal EU exit process.


He also hinted that the party may not sack more than a dozen junior frontbenchers and whips who voted against Brexit, even though three shadow cabinet ministers resigned.


McDonnell said Labour had not decided how to whip the final vote on article 50, but the party would not block Brexit, raising the possibility of abstentions.


Diane Abbott, the shadow home secretary, who avoided the vote on Wednesday night because she was ill, has previously said the position would be reviewed before third reading in the House of Commons.


Even the former chancellor George Osborne acknowledged that the battle over the direction of Brexit would begin after the parliamentary vote, McDonnell said.


“What we are going to fight for in the coming period is to regain the future based on a thriving economy, jobs protected, a constructive relationship with Europe and the rest of the world, the protections of workers rights, environmental regulations, consumer regulations; all those benefits we got from the EU we want to preserve, but we want to tackle some of the perceived disbenefits that motivated people to vote leave,” he said.


The shadow chancellor also highlighted the rebellion among the pro-EU Liberal Democrats. Two out of the party’s nine MPs abstained, while the rest voted against the bill.


He was speaking as May prepared to publish a white paper later on Thursday morning, which will set out in more detail the government’s plan for Brexit.


No 10 will be hoping the document satisfies would-be Conservative rebels who could threaten to back opposition amendments if they feel there is not enough parliamentary scrutiny of the process.


The legislation is still highly likely to pass through parliament and make it into law, allowing May to meet her self-imposed deadline of triggering article 50 before the end of March.


Rowena Mason, Guardian, Thursday 2nd February

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John McDonnell Tax Return 2016

Last year I published my tax returns for 2015 as I felt it was important for politicians to show transparency.

This year I am doing the same and my full Tax Return can be viewed by clicking the link below.

John McDonnell's tax return 2016




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John McDonnell MP, commenting on the Public Affairs Committee (PAC) report:

Commenting on the Public Affairs Committee (PAC) report on HMRC's tax collection efforts from high net worth individuals, which shows that the very wealthy are receiving preferential treatment, said:

"This latest report from the PAC shows how the Tories have run a rigged economy where the super-rich pay less and less in tax while earnings for average working households are still below their level of a decade ago. It's a national disgrace that the amount lost in tax from a super-rich elite under the Tories would be enough to help end the crisis in social care.

"Labour will call time on the super-rich tax-dodgers and give HMRC the legal and staff resources it needs to close the tax avoidance loopholes and scams. We'll stop the Tories using the excuse of Brexit to turn Britain into a tax haven off the coast of Europe, and build an economy that leaves no-one and no community behind."

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John McDonnell MP, speaking after the vote on the revised Charter for Budget Responsibility, said:

charber_for_Fiscal_Responsibilities.jpgThis is not a Charter for Budget Responsibility, it’s a ‘Charter for Alternative Facts’, as the Chancellor has tonight abolished the OBR’s ability to determine when a negative shock occurs. This represents a lack of confidence by the Chancellor in his ability to reach his own targets, as well as a rowing back of the welcome principles the OBR was created for – impartiality and credibility of fiscal policy.


Instead of less scrutiny by the OBR, Labour would like to see more, such as our call for the Chancellor to give power to the OBR to assess short-medium term policy decisions on health spending. Given the last six years of Tory underfunding in our NHS alongside the Government’s denials of the resulting crisis, we need to restore not diminish the public’s faith in the Government’s spending plans.


Under this new charter the OBR will assume the role of bystander rather than arbiter of whether or not the economy is facing a negative shock. This is a huge power grab by the Chancellor, as it means he can decide when and what such a “shock” will be, and therefore he can suspend his rules when he likes, and make up his targets as he goes along.


This Charter also continues with the practise of lumping infrastructure spending in with day-to-day spending, meaning that there will be insufficient scope for investment in our economy, which could hinder growth and therefore our ability to reduce the national debt.


Despite all the rhetoric of “pressing the reset button”, the Autumn Statement has shown that there would be a continuation of austerity cuts to public services. There is still no more money for the NHS and social care crisis, or for ESA and Universal Credit recipients facing cuts.


Labour’s Fiscal Credibility Rule would provide the adequate level of investment our economy needs, underpinned by independent oversight coming from both the MPC and a beefed up OBR, which would report to parliament and not the Treasury.”






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British Airways strike: Shadow chancellor John McDonnell backs latest BA cabin crew walkout

John McDonnell spoke at a Unite rally as a second, three-day strike of Heathrow staff began

ba_strike.jpg“Onwards to victory”: the rallying cry of Fidel Castro was deployed in unusual circumstances this morning, at a rally of striking British Airways cabin crew at a football ground near Heathrow.

The staff, who work for BA’s Mixed Fleet operation and are members of the Unite union, have begun a second strike in protest against what they describe as “poverty pay”. The stoppage will continue until midnight on Saturday.

The strikers held a rally at Bedfont FC, a football ground beneath the flightpath. Some had exchanged their normal uniforms for T-shirts reading “Dreamliner crew” on the front and “Binliner contract” on the back.

Another message read: “I was exploited by Willie” — a reference to Willie Walsh, chief executive of BA’s holding company, IAG. Mr Walsh was boss of British Airways in 2009-10, during a long and bitter cabin crew dispute. 

All cabin crew who have joined BA since that dispute ended are in Mixed Fleet. They are employed on inferior terms to their longer-serving colleagues, and operate a range of short- and long-haul flights from Heathrow.

Services from Gatwick, London City and Stansted are unaffected.

The shadow chancellor, John McDonnell, addressed the rally; the Labour MP’s constituency includes the airport. He accused BA’s management of “bloodymindedness” and described the strikers as “the heroes and heroines of our movement”.

The strikers were told that bus workers, dockers and hospital workers are being asked to contribute to a hardship fund to help BA cabin crew.

The union claims many cabin crew are reporting for duty while unfit, rather than lose the £3 per hour allowance they earn while working.

In addition, says Unite, some staff are sleeping in their cars at the airport because they cannot afford the petrol to drive home and back to work the following day.

Last week hundreds of Mixed Fleet cabin crew went on strike for two days. BA cancelled 44 flights and chartered aircraft and crew to cover 28 more.

In a statement ahead of the latest strike, the airline said: “We will merge a small number of our short-haul services at Heathrow, resulting in the cancellation of only one per cent of our total scheduled flights across the three days.

“Customers affected will be able to fly slightly earlier or slightly later.”

British Airways has cancelled 12 flights on Thursday, in the shape of round trips to Aberdeen, Bologna, Dusseldorf, Hamburg, Hannover and Oslo. It plans to cancel another dozen departures on Friday. Saturday, which has a lighter flying programme, will be unaffected.

Three aircraft belong to Titan Airways have been chartered by BA to cover for other flights.

Gareth Theobald, a member of Mixed Fleet and a union rep, said: “Our message has never been about grounding planes.”

He said that crew would typically pay £300-£400 per month on food in overseas locations where they night-stop.

British Airways rejects Unite's contention that average earnings for Mixed Fleet crew are £16,000 annually. A spokesperson for the airline said: "Their pay and reward is in line with cabin crew at our competitor airlines. New cabin crew in their first year working full time at British Airways will receive more than £21,000 based on pay, allowances, incentive and bonus."

One in five of the recruits for Mixed Fleet last year were from other UK airlines. 

As the strike got under way, Heathrow Terminal 5, BA’s main base, was quiet; passengers on the cancelled flights had been contacted in advance and offered alternative departures or refunds.

Back at Bedfont FC, striking cabin crew were dispatched to picket lines around the airport. The shadow chancellor said they were the first group of workers he had seen who fixed their make-up before joining a picket. 

The strikers left with the revolutionary message of Che Guevara ringing in their ears: the struggle continues.

Peter Kavanagh, Unite’s London & Eastern regional secretary, told the cabin crew: “This is going to be potentially a long struggle, a hard struggle.”

The Independent, Simon Calder Thursday 19 January 2017

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John McDonnell calls for NHS funding audit as winter crisis deepens

NHS funding levels should be checked by the government’s budget watchdog amid public distrust of the figures and a worsening winter crisis in hospitals, John McDonnell has said.

The shadow chancellor wrote to Robert Chote, head of the Office for Budget Responsibility (OBR), asking him to look at NHS funding levels, as doctors warned that the shortage of resources in health and social care has created a crisis.

There have been a number of calls from Labour and the Liberal Democrats for an independent auditor for the NHS. But McDonnell called on the existing OBR to see if it could establish the truth about public spending on the NHS.

The level of NHS funding has become hotly contested amid claims that cuts to social care have been causing unprecedented pressure on hospitals and further controversy over the government’s claims to be putting in another £10bn a year into the health service by the end of this parliament.

“It has become clear that Labour’s warnings of a looming winter crisis in the NHS were not heeded,” McDonnell wrote to Chote. “And we have seen in recent days that the British Red Cross has now had to describe the ongoing situation as a humanitarian crisis. The response from the prime minister at the weekend was to play down this situation despite the volume of continued complaints from frontline NHS staff.“I strongly believe that this is leading to widespread public distrust in the government’s presentation of the level of funding and support for the NHS and social care. Therefore, it seems that now is the time to assess further enhancing the role of the OBR, and add additional responsibilities to your organisation.”

He suggested there should be an “annual standalone report that assesses short-medium term policy decisions made on health spending by the government, that takes into account the analysis you already do on the long-term trends and drivers of health spending.”

On Monday night, frontline doctors issued an unprecedented warning that patient safety was at risk at many A&E units across the NHS because hospitals are overwhelmed.

The health secretary, Jeremy Hunt, told the Commons in an emergency statement that hospitals may have to cancel operations and outpatient appointments so that staff can concentrate on the sickest patients.

GPs may also be drafted in to help hospitals cope with record demand for medical care. He also provoked controversy by suggesting the four-hour treatment target should exclude people who waste time by presenting with minor ailments.

The Royal College of Emergency Medicine said a substantial number of A&E departments were falling significantly short of the four-hour standard – but Hunt said that as many as 30% of those turning up were neither an urgent case nor a genuine emergency.

The college, which represents doctors in emergency care, warned: “In our expert opinion, when an emergency department falls below 75% against the four-hour standard, it shows a significant level of overcrowding and begins to put safety at risk. Present figures suggest a substantial number of departments are falling below this level.”

The college believes that one in four A&E units are at risk of offering poor care, citing delays in assessing patients and administering pain relief.

In an emergency statement prompted by reports of intense pressure at A&E units around the NHS in England, Hunt said that the four-hour waiting time had to be revised to remove non-urgent cases.

“This government is committed to maintaining and delivering that vital four-hour commitment to patients,” Hunt said. “But since it was announced in 2000 there are nearly 9m more visits to our A&Es, up to 30% of whom NHS England estimate do not need to be there. And the tide is continuing to rise.

“So, if we are to protect our four-hour standard, we need to be clear it is a promise to sort out all urgent health problems within four hours, but not all health problems, however minor.”

NHS Providers, which represents hospital bosses, welcomed the change as “potentially helpful” in relieving the strain on A&Es.

But Jonathan Ashworth, the shadow health secretary, said: “Is he now really telling patients that rather than trying to hit the four-hour target, the government is now rewriting and downgrading it?”

Guardian 10th January Rowena Mason and Denis Campbell

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John McDonnell calls for 'radical federal UK' as Labour shifts ground on union.

UK Labour shadow chancellor John McDonnell has called for a "radical federal" UK.

The move would signal a major change in the UK Labour Party's position when it comes to the constitutional settlement in Britain.

The Sunday Herald has also learned that other senior figures in Jeremy Corbyn's shadow cabinet are also looking at formally adopting federalism as party policy.

Last night, McDonnell, Corbyn's closest ally, gave the clearest indication yet that Labour will legislate for the UK to become a federal state if it wins the next General Election.

Speaking to the Sunday Herald, McDonnell said: “I believe there is immense potential in developing a radical federal structure [for the UK].”

Meanwhile, former London mayor Ken Livingstone told the Sunday Herald he was "certain" Labour under Corbyn would embrace federalism. Livingstone also stated his own support a federal UK - which would be the most radical shake-up of the UK's constitution since devolution.

The left winger, who was also elected twice as London mayor, said that he was convinced Corbyn and McDonnell would promote federalism as an alternative to both Scottish independence and the status quo of the Union.

Livingstone said: "I'm certain that they will. John McDonnell like me came into politics from local government to make sure that wealth and power are fairly distributed across all regions."

Federalism - a policy so far only embraced by the Lib Dems at UK level - would see national parliaments in Scotland, Wales and Northern Ireland have power over all legislative matters except foreign affairs and defence.

Scottish Labour leader Kezia Dugdale has also backed federalism. In a major speech in London last month, she said the UK needed “a new political settlement” to stop an erratic and uneven distribution of power between its regions and nations.

Dugdale said the UK should be transformed into a federal state with Scotland taking control over fisheries, farming and social rights now covered by EU laws. Former Labour Prime Minister Gordon Brown backed a similar package.

Speaking this week, Dugdale said: "I have proposed a federal solution, where every nation and the regions of England could take more responsibility for what happens in their communities – while firmly safeguarding the redistribution of wealth across the UK."

UK Labour's national elections coordinator Jon Trickett is understood to be examining a radical policy package for the party at Westminster to deliver a federal British state if it wins the 2020 General Election.

Trickett, who is Corbyn's lead on constitutional issues, is a strong supporter of devolution to the UK regions as a former leader of Leeds City Council and an MP for Hemsworth in West Yorkshire.

He has also held talks with figures in Scottish Labour on how the party could use a federal structure for the UK to promote a left-wing agenda by the redistribution of wealth through the parliaments in Edinburgh, Cardiff and Belfast, as well as the English regions.

Livingstone, commenting on the proposals, said such an agenda for the party north and south of the Border would "help" it to develop an alternative to Scottish independence and the status quo of the union.

Speaking to the Sunday Herald, Livingstone said: "There are about a dozen places that would benefit from federalism, including the Welsh and Scottish Parliaments. It would help, but the fact is people voted against independence.

I support Jeremy [Corbyn] because he's got ideas about moving away from a society where the 10 per cent control most of the wealth. The SNP poses itself as of the left and talks left, but it definitely doesn't act in the same way."

Livingstone, who served as a Labour MP in London for 14 years, also claimed federalism would make it less likely that any region of the UK can be dominated by "little elites".

He said: "I've always been in favour of devolving power to whatever region we're talking about. If you look at America or Germany, states and regions have real local recognition unlike in the UK where all the power is sucked up by Whitehall.

"I've advanced the devolution approach all my political career. If you'd had north east and north west regional parliaments or assemblies they would have got massive investment. So federalism absolutely. We need it as people in regions in all parts of the UK are being excluded by little elites."

However, Chris Stephens, the SNP MP for Glasgow South West, said independence would make it easier to deliver social justice than federalism.

Stephens, the SNP's trade union and workers' rights spokesman at Westminster, said: "The clear difficulty with federalism is that there appears to be a lack of enthusiasm for it elsewhere in the UK.

"In terms of autonomy on issues such as employment law and workers' rights, independence remains the best option for those seeking a different approach to the Tories and their current hatred for trade unions and progressive politics." 

Andrew Whitaker, The Sunday Herald, 8th January 2016

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John McDonnell MP, Shadow Chancellor, commenting on the IFS report which shows that the most well off will see their inheritance increase, said:

This report's warning that wealth inequality is set to rise is deeply worrying. It further highlights why this is the wrong time for the Tories to go ahead with £2.3billion worth of inheritance tax giveaways that would at most benefit 63,000 estates.

The Chancellor should not be pushing ahead with policies that could contribute to an increase in wealth inequality and further reward those already well off in our country, especially at a time when many of our public services such as the NHS are being hit with cuts that have led to rising waiting times and bed shortages.

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Interview with Annabelle Dickson

John recently did a couple of interviews with Annabelle Dickson which were published on the Eastern Daily Press on the 17th and 19th December 2016. The articles provide some very good information on John's position across a range of topics nationally but also focusses on his links with East Norfolk and some memories of his life there. The first is entitled: 'East Norfolk’s special place in the heart'. The second is called: 'Brexit must be based on what drove the vote to go'.

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John McDonnell accuses Philip Hammond of handing Britain’s biggest banks a rebate by not reversing cuts to the bank levy.

John McDonnell, the shadow chancellor, has accused Philip Hammond of failing to cancel a “tax giveaway” by his predecessor to Britain’s biggest banks, worth more than £1bn this year.

In his summer budget after the 2015 general election, the then chancellor George Osborne announced deep cuts to the bank levy, which was introduced after the financial crisis and charged according to the size of banks’ balance sheets.

Big banks, including HSBC and Standard Chartered, which felt penalised by the levy, told him that they could move their headquarters outside the UK.

Osborne announced phased cuts in the levy over the parliament and made up the shortfall in revenue by imposing an 8% surcharge on banks’ corporation tax, which falls on all lenders, not just the largest.

McDonnell said by failing to reverse the cuts in the bank levy in November’s autumn statement, Hammond was handing the big banks a rebate taxpayers could ill afford.

The latest forecasts from the independent Office for Budget Responsibility, published alongside the autumn statement, showed revenue from the bank levy at £2.7bn for the current financial year, instead of the £3.8bn expected in March 2015, before the general election.

“Philip Hammond tried to sneak out the fact that he has continued this cut in the bank levy, which will provide big banks with a tax giveaway larger than under even George Osborne.

“The fact that we are seeing such a large handout to the biggest banks in our country at a time when we are seeing cuts to our schools, NHS and a funding crisis in our care service is truly shameful.”

McDonnell, who is the closest ally of Labour leader Jeremy Corbyn, will make a major speech on economic policy this month and hopes to draw a clear dividing line with the Conservatives by showing that he would take on vested interests as chancellor.

He recently made a series of spending pledges to protect pensioner benefits, including the costly triple-lock guarantee (that pensions rise by the same as average earnings, consumer price index or 2.5%, whichever is highest), in an effort to win over elderly voters.

Labour also wants to show that it will fight to avoid a “bankers’ Brexit” – protecting the interests of the City at the expense of ordinary taxpayers – though it has said it would like to see the continuation of “passporting”, the regime allowing UK-based banks to trade throughout the EU.

A spokesman for McDonnell said Labour would reverse the cuts to the levy and would be unlikely to remove the corporation tax surcharge, because it came alongside a series of cuts in the corporation tax rate which had reduced big corporations’ tax liability.

When the government announced that policy, the Treasury minister Harriet Baldwin told MPs: “It means that the overall rate of corporation tax will be slightly lower for banks than it was in 2010.”

Britain’s competition watchdog, the Competition and Markets Authority (CMA), warned that the shift to the corporation tax levy would reduce the advantages of the tax system for smaller banks trying to break into the market. So-called challenger banks told the CMA they expected to be paying up to £123m more in tax between them by 2020-21 as a result of the changes.

“The overall effect, compared with the pre-2016 position, is that the tax advantages of smaller banks including new entrants have been reduced as a result of the changes to the bank levy and the introduction of the CTS [corporation tax surcharge]. Therefore, any effect that these tax advantages had in offsetting the barriers to entry and expansion such banks face are likely to be reduced,” the CMA said.

A Treasury spokesperson said: “The government is clear that banks, like all businesses, must pay the right amount of tax. The reform of the bank levy was announced alongside the introduction of a new 8% surcharge on bank profit. Together, the levy and the surcharge are expected to raise over £18bn from banks over the next five years.‎”

McDonnell also called for Hammond to abandon “deeply unfair” cuts to the corporation tax rate, saying the money could have been used to fund teachers, nurses and police officers.

The rate has been reduced from 28% in 2010 when David Cameron became prime minister, to 20% and will fall to 19% in April under plans to reduce it to 17% in 2020. The cuts will be worth almost £15bn a year to businesses by 2021 and Labour claims this is equivalent to employing 12,000 nurses, 10,000 police officers and 10,000 teachers full-time every year for a decade.

McDonnell said: “We have known for a long time that the Tories’ cuts to corporation tax have cost the exchequer billions and today we have laid bare what this means for our public services.

“Labour is calling on the government to reverse these deeply unfair tax giveaways and start properly investing in our vital public services.”

Heather Stewart, The Guardian, January 2 2017

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John McDonnell says emergency funds could solve social care crisis

John McDonnell, has today written to Philip Hammond offering cross party support to solve the social care crisis in our country, which this Christmas sees a million elderly people not get the care they need.


Under the Government’s spending plans outlined in the Autumn Statement there is £27 billion of potential additional spending available. This would be more than enough to cover the £1.9 billion funding gap in the social care system next year.


Labour is offering support to the Government if it releases this funding.


In his letter to Philip Hammond, John McDonnell has offered his support “in finding an immediate funding solution for the social care crisis this winter” and has pointed out that they could provide the support he will “still be able to meet his “own target for deficit reduction, set at 2 percent of GDP in 2020-21.”


This letter follows on from the one that Jeremy Corbyn sent at the weekend calling for an urgent meeting to discuss emergency support for social care.

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Labour will guarantee pensioner incomes beyond Brexit

pensioners.jpgLabour is today giving a guarantee to pensioners and those approaching older age that we will guarantee their incomes regardless of the Tories' shambolic handling of Brexit. 

John McDonnell MP, the Shadow Chancellor, and Debbie Abrahams MP, the Shadow Work and Pensions Secretary, on a visit to Southwark Pensioners Centre, South London, have given a firm commitment to pensioners in Britain that the next Labour government will protect the triple-lock and pensioner benefits such as the TV license, bus passes and winter fuel allowance. 

John McDonnell said "After six wasted years of Tory economic failure that has seen some have to wait longer to receive their pension, and those in work approaching retirement having to work longer with earnings stagnating, Labour won’t let them face further uncertainty or reductions income. 

"The OBR and Bank of England are projecting inflation to rise in the years ahead and with the Tory government all over the place on Brexit, there is too much uncertainty for those on fixed incomes such as pensioners. 

"Philip Hammond refuses to give this guarantee to our country's elderly population, or stand up to Tory politicians calling for the triple-lock to be scrapped.  

"Those older people who voted for Brexit did not vote to see their incomes threatened as a result. Labour is instead committed to protecting pensioner incomes in our country, and we will provide the certainty that this government refuses to whether it is on the state pensions or the crisis in our care service. 

"It is only a Labour government that can make an economic success of Brexit, so that no one and no community is left behind." 

Debbie Abrahams MP, Labour’s Shadow Secretary of for Work and Pensions, said: 

“This Government is abandoning older people. They are failing to protect existing Defined Benefit pension agreements, failing to guarantee the triple-lock and failing to act on the injustices placed upon WASPI women by their chaotic state pension age equalisation.” 

“Labour has already committed to extending pension credit to provide support to hundreds of thousands of the most vulnerable WASPI women, now we are committing to guaranteeing the triple lock under our watch. 

“When taken with our plans to defend the NHS, and end the Tory crisis of social care it is clear that only a Labour government will guarantee a dignified living standard for older people.” 

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Hundreds attend public meetings on Heathrow expansion

Residents flocked in their hundreds to two public meetings held by local MP John McDonnell last week to voice their concerns about the proposed third runway at Heathrow. (1)


At a meeting held at Harlington Baptist Church Hall on Thursday 8 December, around a hundred locals spoke about the threat to Harlington that a new runway would bring, such as being situated at the end of the runway, bringing unbearable new noise levels to the village, whilst around 200 West Drayton residents packed the main hall at Yiewsley & West Drayton Community Centre on Friday 9 December. At this meeting the message from local residents concerned increased traffic congestion and the toxic pollution levels that would result from the area being brought closer to the border of the expanded airport, with the new boundary just 200 metres from some West Drayton residents.


John McDonnell, Labour MP for Hayes and Harlington, said:

heathrow_1.jpgThe message from these public meetings couldn’t be clearer: local residents are going to fight this runway all the way. A third runway at Heathrow is undeliverable and I believe we will stop it from ever being built.

“I’m also fairly certain that the legal action from a coalition of local authorities will be successful. The decision by this Government to build a third runway was shameful and remains a huge threat to local residents who face losing their homes, schools, community centre and village life. And when you add in the air pollution, noise and climate change concerns then it becomes even more obvious that this runway makes no sense.” 


Jackie Clark-Basten, Chair of Stop Heathrow Expansion, who spoke at the meeting, said: “Heathrow heathrow_2.jpgexpansion would not just have a devastating effect on Harmondsworth, Longford and Sipson. As we heard at the two public meetings, the impact is far greater, bringing new noise misery for residents of Harlington as well as toxic air pollution levels for West Drayton residents and a traffic nightmare for all local areas. I am confident that this runway will never be cleared for take-off.”



More public meetings are expected in Hayes in January.

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John McDonnell joins Jeremy Corbyn at pop-up food bank outside Parliament

unite_food_bank.jpgJohn McDonnell, Shadow Chancellor joined Labour leader Jeremy Corbyn MP on Wednesday outside Parliament at Unite’s Hope not Hunger pop-up food bank to take a stand against hunger. 

Figures released on Friday 2nd December revealed that during December 2015, The Trussell Trust’s foodbank network provided 133,734 three day emergency food supplies to people in crisis; 56,779 of these went to children.  

The call comes with the launch of Unite’s Hope not Hunger Christmas appeal which has already raised thousands of pounds in donations for Trussell Trust foodbanks from union members across the country.  

John said: “It’s a disgrace that we have a Government at the moment who can’t even feed its own people. “One million food parcels were given out last year by the Trussell Trust alone which is a very alarming situation.” 

Len McCluskey, Unite General Secrerary, said: “No person should have to choose between heating and eating this Christmas but without the support of local foodbanks up and down the country many thousands will. 

“Holiday food is good, but foodbanks also need the basics that we take for granted like toilet rolls, toothpaste and toothbrushes, deodorant, shampoo, winter coats, gloves, scarves and Christmas presents for the kids.”



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John McDonnell visits RSPCA clinic to launch Christmas appeal

rspca.jpgJohn McDonnell visits charity’s clinic to meet staff and animals as they get ready for Christmas

A deaf kitten in desperate need of a loving home was one of a number of animals who greeted John McDonnell when he visited the Hillingdon, Slough, Windsor, Kingston & District Branch of the RSPCA to help launch their Christmas appeal. 

The Labour MP for Hayes and Harlington and Shadow Chancellor was given a tour of the branch’s Hillingdon Clinic and nearby charity shop on Friday (2 December) where he learned more about the vital work done to help animals in the local area. 

Irene Hansford, who is chair of the RSPCA branch, said she was pleased to have the chance to showcase the work they do as she explained they need to raise more than £9,000 each month to carry out work at their busy clinic. 

She said: “Mr McDonnell joined us for a tour around the clinic and charity shop as he endorsed our Christmas appeal where we hope to raise money and encourage donations of food and bedding to help the animals in our care. 

“He was very interested in the fact local people who cannot afford private veterinary fees can access subsidised care for their pets. 

“Ouroverhead costs are the same as same as a private practice, but we only charge a fraction of the costs. This means we have to work very hard all year round to make sure we raise the money we need to carry out this work and are reliant on regular donations and support from local people. 

While visiting the clinic the parliamentarian learned more about the need for more volunteers to help lend a hand and even met with a nine week old deaf kitten called Autumn who is looking for a loving home where she can be kept inside and safe from traffic. 

Little Autumn, who was found dumped at just five weeks old, is one of more than 70 cats being cared for by the branch who are looking for forever homes.  

John praised the work of staff and volunteers at both the RSPCA in Hillingdon and across England and Wales and also agreed to work with the RSPCA to ensure the new Government licensing legislation on pet sales and dog breeding, due to be agreed in 2017, will provide the best animal welfare standards and will reduce many of the problems the RSPCA faces on a daily basis.  

John said: “I had a fantastic visit to the RSPCA last week to help launch their Christmas appeal. The staff and volunteers at the Centre do an excellent job all year round looking after all the animals and it was a pleasure to drop in to support the work that they do.”

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John McDonnell MP calls for justice for Human Rights Day

To celebrate International Human Rights Day On Saturday, John McDonnell, Labour MP for Hayes and Harlington and Shadow Chancellor took part in Amnesty International’s largest annual letter writing campaign at a reception in Speakers’ House in Westminster Palace.


Amnesty’s Write for Rights encourages people around the world to send personal messages of support to people behind bars, or whose lives are in serious danger.


Year after year Amnesty sees successes from its global letter-writing campaign.  Last year thousands of people across the world wrote messages of support for Albert Woodfox – the longest-serving isolated prisoner.  Albert had spent a staggering 43 years in solitary confinement. In February this year, after thousands of letters of support Albert was freed.


This year one of the people Amnesty is campaigning for is British-Iranian charity worker Nazanin Zaghari-Ratcliffe. Nazanin was arrested at Tehran's airport and has been sentenced to five years in prison on unspecified 'national-security-related charges'. Amnesty is calling for Nazanin's immediate and unconditional release.


Nazanin’s husband Richard Ratcliffe attended Amnesty’s human rights reception, where he appealed to MPs and Amnesty supporters to continue to support and campaign for his wife. 


Former Al Jazeera foreign correspondent Sue Turton, who had been charged and tried in absentia in Egypt, after being falsely accused with eight of her colleagues of aiding and abetting the Muslim Brotherhood, also attended and spoke at the reception.


Sue Turton said:


“Locking up a journalist who is asking too many questions can scare others into self-censorship clearing the way for further abuses to be committed with impunity.


“There has never been a greater need for balanced, well-researched journalism….but those of us who go into conflict and war zones need to know someone has our backs.”


John McDonnell, Labour MP for Hayes and Harlington, said:


“As a Member of Parliament, I know all too well the power of the pen, and the impact that can be achieved when many voices rally around one call. I am hoping that my message, and those of others sent during Amnesty’s Write for Rights campaign, will send a clear message to governments that the world is watching and human rights must be respected.” 


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John McDonnell MP, Labour’s Shadow Chancellor, commenting on the speech by the Governor of the Bank of England in Liverpool last night, said:

The Governor has made an important intervention in the discussion about the future direction of our economy. He is right to point out that there have been losers as well as winners from free trade.

We are going through a lost decade in earnings growth, as the Governor highlights, and the fundamental crisis of productivity will not be solved without major government investment, backed up by an industrial strategy, that can deliver growth in high potential new areas like renewable technology.


The Governor hits the nail on the head in calling for societies to redistribute the gains from trade and technology and to educate and empower its citizens.

Labour in government is committed to tackling the challenges outlined by the Governor of rising inequality, low wage growth, and driving up Britain’s productivity growth so that no-one and no community is left behind.

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John McDonnell MP, Shadow Chancellor’s response to the House on the Autumn Statement:


 Mr Speaker


Today’s Statement places on record the abject failure of the last six wasted years and offers little hope for the future.


The figures speak for themselves: growth down; wage growth down; investment down.


The deficit target, failed. The debt target, failed. The welfare cap, failed.


The verdict could not be clearer.


The so-called “long term economic plan” has failed.


As the Treasury’s own leaked paper revealed, they knew it had failed before the referendum result was announced.


And we now face Brexit, the greatest economic challenge of a generation, unprepared.


The new Chancellor acknowledged the failure himself in October, when he promised a “reset” of economic policy.


So today we expected a change of direction after those six wasted years.


Instead we’ve seen further cuts to earnings for those in work through cuts to Universal Credit and a living wage increase that is lower than expected under the previous Chancellor.


This is a new Conservative leadership with no answers to the challenges facing our country following Brexit and no vision to secure our future prosperity.


Labour respects the decision of the British people to leave the European Union.


But the chaotic Tory handling of Brexit threatens the future prosperity of this country.


The Chancellor must now do the right thing for British workers and businesses.


He must insist on full, tariff-free access to the Single Market.


He and the Treasury know that’s what will give the best deal for jobs and prosperity here.


It may not be in the Chancellor‘s nature but in the national interest I urge him to stand up to the Prime Minister and the extreme Brexit fanatics in her Cabinet.


If he stands up for British businesses and jobs in fighting for Single Market access he will have our full support.


But after six wasted years, wages are still lower than 2008.


Self-employed people are on average paid less than a generation ago.


Six million people are earning less than the Living Wage.


Too many people are having to worry about buying school uniforms, affording a family holiday, or even just paying the rent or mortgage.


We’ve had a month of briefing from the Party opposite on those people who are called “just about managing”.


To the Party opposite, these people are just an electoral demographic.


To us, they are our friends, our neighbours, and the people we represent.


Let me tell you why they are “just about managing”.


It’s the result of Tories imposing austerity on an economy that couldn’t bear the strain.


We’ve seen productivity stagnate.


But there’s nothing in this Autumn Statement on the scale needed to overturn those six wasted years.


If the Chancellor really wants to make a fairer tax system, he can start by bringing back the 50p rate for the very richest.


And its familiar hollow rhetoric from the Tories on tax avoidance when they have cut resources at HMRC.


Resources available to HMRC today are around 40 per cent less than they were in 2000.


The Chancellor has frozen in-work benefits at a time when food prices are rising and we don’t expect wages to keep up.


But we need an economy that is fundamentally more prosperous and where that prosperity is shared by all.


The increases in the National Living Wage announced today are lower than expected and leave the lowest paid workers still earning less than they need to live on.


So I ask the Chancellor to adopt a Real Living Wage level, as Labour has pledged to do, and abandon his predecessor’s empty rhetoric.


Regrettably, the Chancellor is still going ahead with some of the cuts to Universal Credit.


Thanks to pressure from all sides of this House he is offering to soften the blow.


We don’t want the blow softened, we want it lifted altogether.


Today’s changes will leave a single parent on the average wage £2,300 worse off.


These are people working hard to deliver for their families and the Government is betraying them.


As for people with disabilities put through the ordeal of the discredited Work Capability Assessment, who are trying to get themselves ready to return to work ‘just about managing’, yes, they still remain in the Chancellor’s firing line, cutting £30 a week from their support.


Those that are “just about managing” rely upon our public services.


They send their children to local schools.


They depend on their local hospital.


They rely on local council services like cleaning their streets, tending to their parks, and opening their libraries.


But the reality is our public services are just not managing.


Today, the childcare that parents rely upon remains underfunded, as the Public Accounts Committee has reported.


I would like to also pay tribute to the Honorable Members for Swansea East and Erith and Thamesmead for their important work in bringing the issue of child burial fees to public attention.


I ask the government to do the right thing on child burial fees and reconsider making funding available for families in these desperate circumstances.


Councilors from all political parties are reporting that they are at a tipping point in the provision of social care.


The previous Chancellor cut nearly £5 billion from social care meaning over one million people who need care aren’t getting it.


They’re not even just about managing. They got little help today.


We called for additional support for social care.


But the funding being provided is only a stopgap measure.


Our social care system will not be secure without long-term funding.


Tonight, many elderly people will remain trapped in their homes, isolated, and lacking the care they need because of continuing cuts to funding.


You can’t cut social care without hitting the NHS.


The supposed £10bn funding allocated is a restatement of an earlier commitment.


But the Health Select Committee described this £10bn claim as “misleading and incorrect”.


The real amount is less than half that claimed.


We have 3.9 million people on NHS waiting lists. More than ever.


Many of those 3.9 million people are waiting in pain, and they got no relief today.


Across the country, hospitals are facing losing their A&Es, losing their maternity units, losing their specialist units.


This Tory Government is failing patients and failing dedicated NHS staff.


It is the first time healthcare spending per head has declined since the NHS was created.


I fear there will be a crisis in funding and care over this Christmas.


The NHS cares for us – we should care for the NHS.


Members of this government have also overseen the biggest real terms cuts in education for four decades.


One pound in every seven has been cut from FE colleges budgets.

Conservative policy has saddled a generation of students with a lifetime of debt.


How can the Government seriously talk about supporting a 21st century economy when they are planning to pour tens of millions into the failed 20th century policy of grammar schools?


The Chancellor has announced today that he is scrapping “pay to stay” proposals and letting agents’ fees.


This U-turn is a victory for Labour’s campaigning against both the ‘tenant tax’ and lettings agent fees.


The Chancellor has spoken of the “dream of homeownership” for the young.


Nothing announced today is of the scale needed to suggest it will remain anything other than a dream.


The hard facts are these.


The Government of which he was a member built fewer homes than at any point since the 1920s.


There are now a third of a million fewer homeowners under 35.


The Chancellor could have delivered today the scale of investment required to build the homes we need and create a new generation of home-ownership.

He failed.


The Chancellor has failed to address properly this government’s most consistent shortcoming.


His predecessor cut public investment to the lowest it had been since the 1990s.


Instead of delivering the ambitious investment this economy needs, across the whole country, the Chancellor has failed to recognise the scale of the challenge.


He also risks repeating the mistakes from last year, with the National Flood Resilience Plan failing to provide the protection our communities need.


Just one in five of the projects in the investment pipeline are under construction and there are £82bn of shovel-ready projects still delayed.


The infrastructure gap between London and the rest remains unbridged.


London was scheduled to receive 12 times the public investment per head of the north east of England.


But the £1.1bn of investment in transport is a reannouncement.


The Oxford-Cambridge rail link is significantly delayed against Network Rail’s original planned completion date of March 2019.


No new ideas here, just a promise to deliver what they have previously failed to deliver on.


The “Fourth Industrial Revolution” will not be delivered on delays and old news.


At last, the Government has realised its mistake and now talk about an industrial strategy.


But it isn’t enough to change a few Ministerial titles.


This government and the Chancellor need to deliver.


But we’ve yet to see the proposed green paper on industrial strategy that was promised over the summer.


This same government that now talks up high tech oversaw £1bn in real terms cuts to science funding in the last Parliament.


The OECD recommends that developed countries should be spending 3 per cent of GDP on science.


On what we’ve heard today, the new spending will lift our expenditure from under 1.7 per cent of GDP, to a mere 1.8 per cent.


It’s the same familiar story for business.


The Chancellor is continuing the race to the bottom on Corporation Tax.


Whilst continuing the cuts to public services, the Chancellor is cutting taxes for big business.


We now know it’s not headline tax rates that encourage long-term investment from businesses.


Business investment has been revised down every year.


What encourages business investment is knowing they have access to skilled workers, to world-class infrastructure, and to major markets.


Today’s grim economic forecasts show the challenge ahead.


The Chancellor admitted, over the summer, that it was time for a change of course.


He has now had to abandon his government’s fiscal charter with its failed hard surplus target.


Labour warned that a hard surplus target lacked the flexibility to adapt to economic circumstances and the capacity to allow investment.


The Chancellor’s U-turn today demonstrates how right we were.


Mr Speaker


Only weeks ago, the new Prime Minister offered the hope of change.


The Chancellor offered to “reset” economic policy.


Today we’ve seen the very people the Prime Minister promised to champion betrayed.


The Chancellor has failed to break with the economic strategy of austerity.


The country remains unprepared and ill-equipped to meet the challenges of Brexit and secure Britain’s future as a world-leading economy.


After all the sacrifices that people have made over the last six years, I fear today’s Statement has laid the foundations for more wasted years.


Only a Labour Government will deliver on the ambition and vision to rebuild and transform our economy so no-one and no community is left behind.

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Shadow chancellor uses the Autumn Statement Opposition Day Debate to force vote on reversal of ESA and UC cuts

“That this House notes with concern the £3.4 billion reductions to the work allowance element of universal credit and the £1.4 billion reductions to employment and support allowance; calls on the Government to reverse those reductions; and further calls on the Government to reintroduce detailed distributional analysis for the Autumn Statement and all further Financial Statements, as was done between 2010 and 2015.”

I want to explain the genesis of the motion I and my honourable friends have tabled for today’s debate.

Traditionally we would seek to hold an Opposition Day debate and use it to have a wide ranging debate second guessing and commenting on what we predict is to be contained in the Autumn Statement. This year we want to try something different.

 A radical break with that tradition because next week could be the last chance to head off what is shaping up to be a harmful disaster for many low earners and vulnerable people in our society.

So we have taken two significant issues that are contained in the budget plans announced earlier this year by the Chancellor’s predecessor and which the new Chancellor has the ability and opportunity to intervene upon and reverse.

The first is the plan to cut universal credit and Employment Support Allowance.

And for the later debate, the issue of funding social care.

In withdrawing the ESA and Universal Credit proposed cuts, the new Chancellor would dramatically beneficially impact upon the lives of many, many of our fellow citizens who are low earners but also through their disability often the poorest and most vulnerable in our society. We want to see today if we can assemble across the House a moral coalition of pressure that can decisively influence the Chancellor to think again. I believe and certainly hope that we can.

So the appeal to Honourable Members today and in the coming week is to do all we can to prevail upon the Chancellor to halt the policy of cuts to Universal Credit and ESA contained in the budget introduced by the former Chancellor and planned to come into effect in April next year.

Before I come to the grounds for this appeal to the Chancellor, it’s important to understand the origins of these proposals to cut these lifeline benefits.The origins lie in the mistake by the last Chancellor to impose a fiscal framework on his colleagues that was simply impractical given the economic circumstances we were facing and were about to face.

If the fiscal framework is wrongly set and importantly is so inflexible that it cannot reflect the realities and challenges of the economy, then decisions on both tax and spending equally fail to reflect and meet the economic realities.

In this instance the fiscal framework imposed by the former Chancellor was so inflexible and unworkable that it totally failed to meet the economic targets he set it. But also as vitally important, the former Chancellor’s fiscal framework imposed unrealistic constraints on his colleagues’ departments that are undermining their ability to achieve their policy goals.

On the government’s own economic metrics, the fiscal frame work has failed.

Its targets were to eliminate the deficit by 2015. The deficit remains at over £45bn in the first six months of this financial year alone.

Its target was to reduce debt. Debt now stands at £ 1.7 trillion and has increased over the last 6 years by £740bn.

Its biggest failure has been to ignore the needs of the real economy by using the fiscal framework to constrain investment.

The result is a failure to invest on the scale needed to modernise our economy and consequently stagnating productivity.

In the face of all the evidence that the fiscal framework was not working, not achieving its targets. the decision to then set a target for the framework to not just to eliminate the deficit but to produce a multi billion pound surplus by 2019/2020 demonstrated how for the former Chancellor politics was overriding sounds economics.

The result of the then Chancellor setting targets even more removed from reality meant that he imposed upon his colleagues the task of scrambling round to find a scale of cuts that in many instances undermined what chance they had to implement the policies upon which they were elected or which had been longstanding ambitions.

This was nowhere more evidenced than in the Department for Work and Pensions.

For the Treasury to demand cuts to Universal Credit that would take on average £2,100 out of the incomes of people who are doing all that is asked of them, working all they could to come of benefits, bringing up their families, contributing to society, this just flew in the face of all that the Universal Credit system was meant to be about.

The same is said of the cuts of nearly £30 a week to Employment Support Allowance. This is a significant cut to the incomes of disabled people who are also doing all that has been asked of them, seeking to find work to lift them off benefits.

I understood at the time when the then Secretary of State, the Right Honourable Member for Chingford and Woodford Green resigned. He rightfully objected to a further burden being placed upon the social security budget especially at a time when new long planned systems were at the early stage of introduction.

I understood then his sense of frustration and understand now why he and many of his Honourable Friends are calling upon the new Chancellor to look again at this burden being placed upon the welfare budget and the threat it imposes to the successful roll out of universal credit and the policy of supporting disabled people into work.

But these planned cuts are more than a threat to the implementation of policies long advocated and indeed cherished by many members opposite. More importantly they are a threat to the livelihoods, living standards and quality of life of millions of many low earners and of some of the poorest and most vulnerable people in our communities.

The government has sought to judge itself on its own set of economic metrics – eliminating the deficit, reducing debt, adhering to a cap on welfare spending. And on all of its own metrics it has failed. But there are an alternative very basic set of metrics upon which you judge a government.

It’s whether a government can ensure its population is adequately fed, decently housed, kept warm in winter and has sufficient income through employment or a support safety net to have a quality of life.

From our privileged position in this House before we consider any cuts to the basic support low earners and disabled people receive, I firmly believe that we have a moral duty to fully appreciate the plight of many of our fellow citizens and the impact any changes forced upon them could have. There are some basic facts that we need to face up to that depict the harsh reality of the lives of so many members of our community.

Nearly 4 million of our children live in poverty. The scandal is that 2/3s of them live in families where someone is working.Thanks to low wages and zero hours contracts, and often forced or often bogus self employment, the promise of work lifting you out of poverty is a broken promise for many.

If a basic responsibility of government is to ensure that its population are adequately fed and housed, well it’s failing. One million emergency food parcels were given out by food banks last year to families that haven’t sufficient income to feed themselves and the latest reports confirm the numbers are rising. 200,000 children will be dependent on a food bank to get a decent meal this Christmas. One survey reported that more than 20% of parents had regularly not eaten themselves so that their children could eat. Others report a frequent choice forced upon them between eating and heating.

On the duty to ensure people are adequately housed, failing. Rough sleeping has doubled. The equivalent of 100 households a day are evicted from rented homes, a near record 40,000 in the year to date. 1.2 million are stuck on council housing waiting lists and in my own constituency tonight families will be sleeping in beds in sheds rented out to them.

As for responsibility for disabled people, as the UN report concisely summed up the government “has systematically or gravely violated the rights of disabled people.” Independent research suggested that government efforts to push people off claiming disability benefits have driven 590 people to suicide in three years.

Three years ago I lead a debate following the presentation of the WOW petition highlighting the call for an overall impact of the government’s policies on disabled people. I cited then the immense human suffering caused by the brutal implementation of the Work Capability Assessment and the latest round of cuts to benefits and care services. I cited examples of people who tragically had taken their own lives in despair following the WCA and penalisation by sanctions imposed on them. We now know that the suicides were not isolated examples but have been in their hundreds. And we now know that between 2011 and 2014 over 2000 people assessed as capable of work died before they could take up that work.

Surely we have to learn the lessons from all this evidence. Surely one lesson is that is you impose further cuts on people already struggling, not only will you increase the deprivation and suffering people endure but many will see no light at the end of that tunnel and will despair. The WOW debate was simply to ensure that the impact of any decisions on benefits were properly assessed.

Is a supposed post truth environment evidence based policy making still worth aiming for.

That is why it is critical that the government also restores the distributional analysis of its proposals. But not just to publish the distributional analysis, but to publish one that is intelligible and usable. The Chancellor’s predecessor, before scrapping the analysis entirely, took to publishing figures that disguised the real impact of his policies. That accusation is not mine, but that of one of his old colleagues, the former Chief Secretary to the Treasury [the former member for Inverness, Nairn, Badenoch and Strathspey]. So if the Treasury is now to try and restore public trust, it must not just let the House know when it will publish the distributional analysis. It must make sure the figures are published clearly and without any attempts to massage or spin the numbers. Only in this way can we be able to test the fairness and equity of policy proposals.    

When these cuts were first introduced they reflected a grotesque unfairness at introduction of these cuts when cutting taxes to some of wealthiest and to corporations. Reversing just some of those tax cuts as Resolution Foundation has pointed out could render these cuts to benefits unnecessary. The last Chancellor also had a penchant for absorbing budget gaps at times.

So there is a real opportunity for the Chancellor to live up to the Prime Minister’s spoken commitment to tackle social injustice.

It has been claimed the Chancellor will be resetting the fiscal framework in next week’s autumn statement. This will allow him the flexibility he needs to reverse these cuts.

I appeal to Honourable Members across the House to help us lift this threat of further cuts from these families and disabled people.

We have a week in which to achieve this. We can start today by supporting this motion.

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John McDonnell MP, Labour’s Shadow Chancellor, speaking at Dragon Hall, London, today said:

dragon_hall.jpgIt’s great to be in Dragon Hall, where there’s a real life example of how changing technology can provide huge new opportunities to young people especially .I think it’s important today that we remember the reasons for hope, and look to the future. That is why I came into politics – because I could see how we could live in a society much fairer and better than the one we live in. 

But as I watched Donald Trump win the American election on Wednesday I, like many of you, felt real concern. His was a victory won with the rhetoric of division. Coming on the back of Brexit it is a wakeup call not just for the parties of the left, but for everybody who believes in science over superstition; merit over inherited wealth; paying your taxes instead of dodging your taxes. Like Brexit it was a vote driven, in part, by discontent with what the economy delivers. Dead town centres; job deserts; stagnant wages – and the constant feeling that the basic things we rely on – our jobs, our savings, our homes – are not safe.  

So today I want to tell you what Labour is going to do, as the Tory Government struggles to get a grip of the chaos it’s injected into the Brexit process. 

We need a government able to take five steps. 

First, place the public finances on secure foundations for the future.

Second, end the cruelty of the spending cuts programme.

Third, invest in the long-term to create secure, well-paid jobs.

Fourth, reform our tax system so the richest pay and the rest don’t shoulder the burden.

And fifth, lay out a clear plan and a vision for our country after Brexit. 

New Chancellor Philip Hammond is presenting his first Autumn Statement next week. Philip Hammond has promised it will be a “reset” of economic policy. That’s welcome news, if it’s true. The old policy was wrong and didn’t work. If only somebody had told them. Well, we did. We said austerity will suppress growth; wages won’t recover; the country’s infrastructure will fall apart. They said – don’t worry, most of the cuts will fall on welfare. 

The film I, Daniel Blake brought home with exceptional force some of the cruelty of what that means. But it’s not just those on the sharp end. We have all been failed by the Conservatives’ economic programme. Six wasted years of spending cuts instead of investment. For ordinary people, six years of low pay and high rents; six years of zero hour contracts and job insecurity. They’ve given up on the national interest because they have failed, and failed badly. 

Philip Hammond will have to admit that the Conservatives have failed in every task they set themselves. They failed to bring the deficit under control. It was supposed to have been eliminated by 2015. They failed to bring down the government’s debt. It’s now 1.7 trillion. They failed to restore wages, they failed on productivity, they failed on investment. They failed because at every step of the way there was a Conservative Chancellor who put rhetoric ahead of the hard economic facts. 

He chose austerity, when he could have chosen investment. Worse yet, he chose spending cuts at the same time as cutting taxes for large corporations and the wealthy. Austerity was a political choice, not an economic necessity. And now, because that choice has failed all of us, the economic facts are brutal. This is an economy sliding down the league table. It is an economy with the largest foreign debt of any major developed country. It is an economy where investment remains £50 billon below the levels reached before the crisis. It is an economy where productivity increases, the fuel of growth, have ground to a halt even as other large economies race ahead. 

And worst of all, it is an economy where after all the sacrifices of spending cuts and stagnant wages and zero hour contracts - the government debt burden continues to rise and the government deficit remains stubbornly high. There is no other way to say it. Those sacrifices were made in vain. 

They were made at the altar of the political conceit that said for as long as you could pose for the cameras in a high-vis jacket, it didn't matter that actual manufacturing employment was still falling. The million queuing at the foodbank didn't matter. The lost decade for wages didn't matter. That cuts to vital investment didn't matter. 

The Tories want you to forget George Osborne but I want to you to remember what he did in detail. Because he not only failed on every target he set himself – he plunged Britain’s hard pressed communities into such a state of neglect that they reached for the option of a break with Europe.  This year his Budget fell apart, leaving Labour to pick up the pieces. We forced through reverses to the cuts in disability benefits. And we will continue to oppose unnecessary spending cuts that have created so much hardship for so many. 

Next week we will see a Tory Chancellor admit that he has not met any of the targets in the 2010 Conservative Party manifesto. There’s been a change of rhetoric but the priorities remain the same. The tax giveaways to the wealthy remain.  Just as the cuts to the poor and the vulnerable remain. The Tories failure on the economy precedes the referendum, and they will try their best to convince us otherwise, but no one will believe them. Even their own leaked Treasury documents admit it. 

So we will set out tests for next week’s Autumn Statement. Those tests are based on what we need as a country. We need a credible fiscal framework that supports Brexit.  We need actual support for those in work on low and middle incomes. And we need secure and properly funded public services. We want to see an end to austerity, with the NHS and social care properly funded and ESA and Universal Credit cuts reversed. We want to see an end to tax giveaways for the wealthy.

And we need a serious commitment from government to invest across the whole of our country. 

Labour’s Fiscal Credibility Rule remains intact while the Tories’ fiscal charter lies in tatters.  It further highlights we are the only party with an expert-designed fiscal framework that can strengthen our economy and protect the public finances. It will be part of how we judge the fiscal rules that the Chancellor announces next week. They need to be robust and flexible enough to deal with any potential downturn from Brexit, and they must not be political tricks to catch cheap headlines.  I hope he leaves the gimmicks on the shelf alongside George Osborne. 

Let’s talk about the first step in turning our economy round. I want to be absolutely clear about this, as I have been before. Those on the left have a duty to be scrupulously honest about the economic tasks in front of us. There are no easy options.  There is no proverbial magic money tree. We can only deliver the high-quality public services that our communities want and need when we have a high-quality economy that can pay for them. 

That means an absolute and unbreakable commitment to fiscal discipline on the part of any future Labour government. There is nothing “left-wing” about running an excessive deficit. There is nothing “progressive” about running up excessive debts. A government has an absolute responsibility to manage the money it is entrusted with by the people it serves.

That means being transparent about how we intend to manage it. 

So for Labour that means not thinking about how to spend money until we have shown how to earn it. That is the absolute commitment built into Labour’s Fiscal Credibility Rule which I announced in March. We drew this up with world-leading economists because we wanted to bolt into place the rock-solid foundations needed for a government that is determined to transform this economy for the better. It says that a Labour government will only spend what it earns, but that we will invest for the future. 

We'll bring the deficit down in a way that does not compromise our public services, or jeopardise our shared prosperity. Every single spending commitment we make, to repair our NHS or to deliver an education system that will meet the aspirations of this country, will fit inside this Fiscal Credibility Rule. If a commitment does not fit inside the Rule, it will not be made. 

To oversee the operation of our Fiscal Credibility Rule, we will make sure the Office for Budget Responsibility reports to Parliament, rather than to the Treasury. We’ll make sure fiscal and monetary policy work together, with clear rules for when monetary policy does not function. Every penny we spend will be earned, and every penny accounted for.  This is what a responsible government would do. 

To take responsibility, Philip Hammond now needs to get a grip.  Philip Hammond now must come clean to the British people. He, like his Cabinet colleagues, supported George Osborne's calamitous economic choices. Worse, as Shadow Chief Secretary to the Treasury, he helped draw them up. He cannot duck his responsibilities, but he can at least attempt to undo the damage. That means no more targets that cannot be met. 

He needs, instead, to set out how he will place the government's own finances on the stable foundation that was so lacking from his predecessor. Abandoning George Osborne’s fiscal framework was the right decision, since the framework had failed so abysmally. But in typical fashion, the Conservative leadership have tried to put the blame for their shift on Brexit. They'll blame anyone and anything instead of accepting their responsibilities. 

We know Brexit will create challenges, but those challenges are harder to meet because after six wasted years under a Conservative Chancellor we have an economy that has been chronically weakened. The Tory leadership need to stop looking for someone else to blame, and start taking responsibility. 

The Autumn Statement this year must set out a new fiscal framework. It has to be based on sound economics. So like Labour's Fiscal Credibility Rule, it should make clear the distinction between day-to-day spending, and investment. And like Labour's Fiscal Credibility Rule, it should build in enough flexibility to allow a government to bring day-to-day spending in balance without damaging the economy. 

Yet on current evidence they appear content to settle for the steady management of decline.

The government has been content to drift through the first months after the referendum. They have placed a great burden on the Bank of England to see us through their own failure to plan. 

I want to pay tribute here to the Governor and to those at the Bank. When the Chancellor was nowhere to be seen, the Prime Minister resigned, and assorted Tory Brexiteers simply walked away from the mess they helped create. It was the actions of the Governor and the Bank of England that were there to offer the necessary support to our economy. And yet their reward has been noises off from the Tory Party elite about the alleged failings of the Bank. Yet the simple truth is that if monetary policy has been exceptionally loose this last six years, it is only to compensate for the exceptionally tight fiscal policy. 

As the consensus amongst economists now says, imposing austerity on an economy battered by the financial crisis of 2008 was self-destructive. It was fortunate that the Bank of England responded appropriately to ensure the economy did not simply drop into extended depression. The Bank's actions were not cost free. I share those concerns about the consequences for inequality that follow from the version of Quantitative Easing that has been applied. But it was the Bank that had to deal with the calamitous economic decisions by the Conservatives running the Treasury. Without the foolish and destructive dash after fiscal targets that could never be met, the Bank would not have had to rely on monetary policy to the extent that it did. 

You think the Conservatives would be more grateful. Instead we have heard idle chatter from some quarters about removing the Bank's independence. At a time of economic uncertainty, not just here but across the world, we would trifle with the Bank's independence at our peril.

It is a hard-won economic asset for this country. So I want to repeat a point I have made already: under Labour, the Bank of England's operational independence will be sacrosanct. 

It is up to the government of the day to give the Bank its mandate. But it is up to the Bank, and the Bank alone, to achieve it. We will not allow a return to the days when Conservative Chancellors would deliberately slash interest rates just ahead of an election to create a boom, only to drive them back up again once the election was over. The public servants who run the bank are drawn from the very top of the global talent pool. We will not allow a cabinet drawn from the dregs of a Tory government to place the blame for their failures on the bank. 

On the second step, we have to now make different, and better, choices than to impose spending cuts on the scale the Conservatives attempted. 

The economy is growing.  We can use the proceeds of that growth more fairly. If we allow the economy to grow, there is no need to make cuts to the in-work benefits that millions rely on.  The majority of those in poverty are also in work, and depend on the lifeline of in-work benefits to compensate for poverty pay. The government can’t claim to be for working people, and be cutting the earnings of those who work. The planned cuts to Universal Credit must be reversed, and reversed in full. 

And there is no need for us to make spending cuts to the lifeline of some of the most vulnerable. Those who can’t work through no fault of their own, whether through illness or disability, should not be targeted for punitive measures. This seems, to me, to be fundamental to a decent and humane society. 

Let’s remember what austerity has meant in human terms. Nearly 90 people a month are dying after being found fit for work by work capability assessments. This is a direct consequence of the decision, taken by a Conservative Chancellor, to impose the biggest and most destructive spending cuts seen in this country since the 1930s. The scale of what is happening is almost beyond belief. It should shame all of us when a United Nations report published last week finds that our own government has “systematically or gravely violated the rights of disabled people.” We are better as a society than that. And we should demand better from our government. 

Every planned cut to Employment Support Allowance must be reversed, just as George Osborne reversed his planned cuts to the Personal Independence Payment. But wherever the cuts have landed, they have caused hardship. 

Our local councils are now so hard-pressed that they are in danger of failing their statutory duties. That is what six years of devastating cuts have done. And it’s been the poorer authorities that have borne the brunt of it. Spending cuts for the poorest local councils are five times bigger than those for the richest. Local councils have stretched every last penny as far as they can go for six years. But now they’re at breaking point.  Local authority leaders say they simply cannot bear another year of spending cuts. 

Social care provision is in crisis. Across the country, care providers are facing bankruptcy. Due to local authority cuts, some care workers have had to slash their visits to elderly and disabled people from 30 minutes to 15 minutes.  That's 15 minutes to make somebody dinner, give them a bath, help them take their medication, change their bedsheets and any other help that they might need. In some places, councils have had to consider reducing visits to as little as ten minutes. Over a million people in need of care are receiving no formal help. 

The NHS is being left to pick up the pieces. The hidden costs of cuts to social care appear as the intolerable strain now being placed on our National Health Service. Three major health foundations have called on the government to make good the deficit in social care. 

As we reach the winter period, bed blocking has reached a new high for the sixth successive month. Older people being left stranded in hospital wards by Tory cuts to social care. The government must provide the £2.5billion needed to stabilise the system. 

We are on course for food bank usage to reach the highest it’s been for its 12 year history this year.  In the run up to Christmas, almost 200,000 children will be relying on a food parcel to get a decent meal.  Food banks increasing, the NHS at breaking point and a housing crisis threatening to spiral out of control. 

Under the Tories, rough sleeping has doubled. The equivalent to approximately 100 households a day are evicted from rented homes, 40,000 in the year to date. And 1.2 million people remain stuck on council housing waiting lists. A Government that cannot feed or house its population and cannot ensure our children do not live in poverty is a Government that does not deserve to exist. 

If we place the government’s finances on a firm footing, we can build the world-class public services people want. That means taking a serious approach to tax reform, the third step in turning our economy round. 

Labour will reform HMRC, ending staffing cuts and making sure it targets the tax dodgers who are failing to pay their fair share. Our Tax Transparency and Enforcement Programme will permanently close the loopholes and the scams the tax dodgers use to duck the taxes the rest of us have to pay. It’ll insist on transparency from the tax havens, to stop the super-rich hiding their wealth and ducking their taxes. And as we lay out our programme of tax reform, we’ll show how the burden of taxation can be shifted away from working people whose real-terms pay has fallen and towards those with the broadest shoulders. 

We know the world is changing.  Advances in technology are reshaping our economy. They are changing how, and where we work. Manufacturing jobs are returning to the UK, looking for highly skilled labour and access to major markets. Digitisation is bringing the design and productions sides of manufacturing closer together. Smaller, faster companies are being established to take advantage of these opportunities. They mean the old rules are being rewritten in front of us. 

For decades, the belief held that the global free market alone would deliver rising prosperity.

Since the financial crisis of 2008, that rule has been torn up. Successful economies today are those with governments prepared to intervene for the common good. They provide vital support for new industries, and sustained investment for the established. Good business doesn’t need no government. Good business needs good government. Good governments don’t, in a panic about job losses, make secret deals with big employers.

They make serious, long-term commitments alongside business to deliver jobs and growth across the whole economy in just the way my colleague the Shadow Business Secretary is now laying out. 

This is our fourth step, delivering an industrial strategy and investment. With our shared values at its heart, we can deliver an industrial strategy that will focus on meeting the real needs of society, and rebuild and transform our economy. That means bringing together and working with all sides in our society – the businesses, the customers, and the workers – to develop a clear vision and plan for the future. 

Labour will offer a New Deal with Business. We’ll offer businesses the education and training their workers need, and the infrastructure they are crying out for, and in return we’ll ask them to pay their fair share. 

Labour’s vision places investment at the centre. Every part of our country has talent and potential. Every person living here deserves to see their own potential realised. But decisions taken by this Conservative government do not reflect that. 

The value of planned investment per person in London is more than twelve times the planned investment in the North East.  We need to bring every part of the country up to the level of the best in its transport, its housing, and its communications. We’ll create hundreds of thousands of secure, well-paid jobs across the whole country. 

This country has an enormous potential in the renewables industries of the future, but we’re not reaching it because we have a government that is failing us. We have the natural resources and the engineering heritage to become a world-leading supplier of clean technology. Backed up by an industrial strategy, we’ll lead the drive to decarbonise our economy and create the jobs of the future. 

As part of that investment in future prosperity, the next Labour government will commit to funding tidal lagoon technology, supplying millions of homes with secure, low-carbon electricity for the next century.   

It’s the investment that government can deliver that will rebuild and transform those communities that have been left to fall by the wayside. 

It’s the investment in education that government can deliver that will make sure our young people have the skills they need to get the good jobs they deserve. 

It’s the investment in housing that government can deliver that will ensure all our families have safe, secure, decent home to live in. 

It’s the investment in superfast broadband that will give our smaller businesses the capacity to succeed in a changing world. 

It’s the investment in research that government can deliver that will give our scientists and engineers the capacity to develop and apply the technologies that can transform this society. 

That means a commitment to sustained increases in government research funding, alongside continued support for private sector researchers. The next Labour government will aim towards the OECD target of 3 percent of GDP a year on all research, and we can start by doubling government spending on energy research. If we want every part of our country to prosper, as we should, we have to make sure every part of our country has the capacity to succeed in a changing world. 

After Donald Trump’s victory – we understand the price for failure. When decade after decade the rich get richer and the ordinary people see their incomes stagnate, something snaps. 

I hope to see from Philip Hammond a commitment to deliver investment not just in a few hotspots, favoured by the Treasury and benefiting the lucky few, but a real commitment of resources to every part of our country. With the costs for government investment at close to the lowest they have been in history, now is the time for government to commit to invest – as we have long argued and as the Chancellor’s Cabinet colleague, the Chief Secretary to the Treasury has now accepted. And those resources that government can commit shouldn’t just go on the big-ticket projects, important as they are. 

It’s not enough to only build a high-speed rail line to connect the places that are already successful. We can’t just ask those in left-behind Britain to stand and wave at the trains as they go shooting past. It’s government that needs to provide the resources for our local communities to invest in what they need to succeed. It’s central government that can provide the scale of investment we now need, after decades of underfunding. But it’s our local communities and our regions that need to take back control of their own economic destinies. 

The alternative is the disarray we can now see from this Government. They can’t tell us their negotiating position for Brexit, and they’ve delayed telling us how they intend to deliver an industrial strategy. They have no coherent plan for Brexit and no coherent vision of how our country will prosper. That is why we see a government in stasis as its shambolic approach to Brexit extends into every aspect of government. 

But the reasons it’s shambolic is because the closed-minded Brexit the Tory establishment want deep down is one the British people do not. They have the wrong ambitions for our economy, and the wrong ambitions for Brexit, which means they will continue to undermine the ambitions of working people.  It also means we will be left with a Brexit that works only for bankers and the rich, instead of one that's based on fairness and works for the rest of us.

Labour has argued for a Brexit that prioritises jobs, prosperity and the public finances. The source of this chaos stems from weakness at the very top of government. 

According to reports just this weekend, the Prime Minister and Chancellor are too busy fighting each other than fighting for an ambitious Brexit deal for Britain. We appear to have a Chancellor who is slapped down by his Prime Minister when he makes an announcement, and ignored by her as she sets his economic policy for him. According to other reports he is also isolated by his Cabinet colleagues to such an extent that it seems he has to read about the Brexit negations with the rest of us in the newspapers. The CEO of Nissan probably knows more about our Brexit negotiating position than the Chancellor. Britain cannot afford a weak Chancellor who cannot find his voice, when our country faces the biggest economic challenges for a generation. It’s time he steps up to the task, and stands up to his Cabinet colleagues. 

Donald Trump’s victory in America has underlined the point that the old rigged economy working just for those at the top has failed. But the Trump plans to increase infrastructure spending serves as a smokescreen to cut taxes for those at the top and to deport migrants. At the same time as spending more on infrastructure, he wants to put jobs at risk by deregulating finance and encouraging speculation. 

We need genuine progressive investment that supports everyone, and not one that divides our society and hurts our economy. That is why people in western democracies who have been left behind are rejecting it.

While Labour supported remaining in the EU to protect workers’ rights, we cannot hide from the fact that too much of the EU also had aspects of the old model, putting the interests of big business over ordinary people. Labour accepts the referendum result as the voice of the majority and we must embrace the enormous opportunities to reshape our country that Brexit has opened for us. In that way we can speak again to those who were left behind and offer a positive, ambitious vision instead of leaving the field open to divisive Trump-style politics.

This means we must not try to re-fight the referendum or push for a second vote and if Article 50 needs to be triggered in parliament Labour will not seek to block or delay it. To do so would put us against the majority will of the British people and on the side of certain corporate elites, who have always had the British people at the back of the queue.

The question of what Brexit means will be fought in the months and years through the negotiations and in the next election when we will define what a post-Brexit Britain looks like. It is time we all were more positive about Brexit, Labour wants to see an ambitious Brexit Britain.

And the British public know that only a Labour government can make an economic success of Brexit, as we are the only party prepared to make the hard choices, and invest seriously to grow a post-Brexit Britain we can all be proud of. 

But the Conservatives are turning Brexit into a shambles - a shambles of indecision, a split cabinet, an attempt to sideline parliament and keep the British people in the dark. While this circus is under way, something deadly serious is happening: sterling has fallen – and that means, in the next year, many of us will be caught in a vice between rising prices and frozen pay. 

So it is more than time for a reset. It’s time for a re-think. It means ending the misery of austerity spending cuts. It means placing the government’s own finances on a secure footing for the future. It means investing for this country’s future. It means addressing the squeeze in living standards. Above all else, it means saying that instead of Conservatives’ Brexit shambles, with special favours for some but nothing for most, we have a clear plan for how this country will build on its potential. 

We have the alternative – and it is now more than ever, with the nationalist right surging everywhere, that we, in Labour would just ask people to consider. Labour is ambitious for Britain. But the Conservatives have given up. They have MPs resigning not just from Parliament, but from the Party. The Treasury is fighting with Number 10. There’s no plan for the future and no prospect of finding one they can agree on. Tory elite is squabbling amongst themselves instead. They’ve lost sight of the bigger picture. 

To make a success of Brexit, we need to lay out an alternative vision of our economy, our society, and our country. The status quo is no longer an option.  That, above all else, is the clear signal from the vote to Leave the European Union. Labour respects that vote and will support the signing of Article 50. But we do not believe that it was a vote for maximum disengagement with the biggest market in the world. 

We are insisting on full, tariff-free access to the Single Market for our businesses because this is the best way to protect jobs and living standards here. This must include provision for our financial services sector, as part of a deal for the whole economy. But as we leave the European Union, we need an alternative vision of our economy that places our shared values at its heart. 

We want an economy that works for the benefit of all. We can’t live by the old rules any more. And we don’t have to. It’s time to rewrite the rules. Invest and innovate to create the decent jobs we need. Re-set the global system so it works for everybody, not just the rich. That way we can unleash the power of hope not hate.

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After labour Party Conference I returned to my childhood street in Liverpool.



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John McDonnell: Neoliberalism has run its course – let's build an inspiring, modern alternative

After four decades, the economic consensus is crumbling. What can politicians do next?

Theresa May’s speech to the Conservative party conference in early October seemed to mark a clear turn in economic policy. It was condemned by the right-wing Institute of Economic Affairs as “an alarming attack on free markets” and by the Adam Smith Institute as “the opposite of pragmatic”. The Institute of Directors felt compelled to point out that “business leaders are not pantomime villains”.

Here was the Conservative Party, the historic party of British capitalism, picking a fight with British capitalism. The agenda of recent years – City-friendly, in thrall to fiscal tightening, with an active monetary policy  is being challenged, in rhetoric at least. The prospect of a “hard Brexit”, with potentially terrible consequences for jobs and living standards, is causing great concern in the world of business.

More fundamentally, the whole political and economic settlement of the past 40 years is potentially under threat. As the new Chancellor, Philip Hammond, told Bloomberg TV on 6 October: “We have a problem – and it’s not just a British problem, it’s a developed-world problem – in keeping our populations engaged and supportive of our market capitalism, our economic model.”

Students of recent history would generally agree that the economic model of Western democracies changed fundamentally from the 1970s onwards. The crises of that decade gave way to a great shift in the balance of power towards capital and away from labour. The rules of the game were rewritten to favour a rhetoric of free markets and small states, and the reality was corporate power and wealth inequality.

For some, this created opportunities. For others, it led to decline or even post-industrial devastation. On balance, there were enough winners, over successive decades, to tilt parliamentary democracies towards acceptance of the new order. Social-democratic parties accepted the new economic rules, even if they insisted on smoothing off the rougher edges.

It is becoming clear that neoliberalism – as these rules have become known – has run its course and cannot deliver the rising living standards that were supposed to be the hallmark of modern economies.

Since the global financial crisis in 2008, ultra-loose monetary policy has been needed across the developed economies. In the UK in particular, stagnant wages for the lower-paid sectors have been supported by in-work benefits, whose costs to the Exchequer have been rising.

Now, the political and financial limits of this course are being reached. The Brexit vote sounded a death knell for our economic and political settlement of the past few decades. On the left, the temptation for some may be to celebrate. After all, we have called insistently for more public investment and economic intervention, alongside policies such as worker representation in boardrooms and clamping down on tax avoidance.

The change in rhetoric by the government has been portrayed as “Conservative tanks on Labour lawns”. But this cliché gets it wrong: it is when your opponents start using your arguments that you know you are winning – as Margaret Thatcher recognised when she claimed New Labour as her greatest achievement.

The breach between the Conservatives and capital does not necessarily herald an improvement in the fortunes of the left. If it is replaced instead by an inward-looking, xenophobic autarky, prepared to sacrifice the living standards of its citizens in the desire to please the most virulent anti-immigrant tendencies of the right, the organised left and the people we exist to represent will be worse off, as will all those who favour a free and open society. If Ukip wins, we lose.

It is only 18 months since David Cameron’s re-election as prime minister. So how has this shift in thinking come about so quickly? Central bankers are understandably reluctant to concede that they are running out of tools to support the economy, but many others have been prepared to say it for them. With interest rates across the West at record lows, some of the brightest minds have been discussing ideas that would have been deemed cranky a generation ago: “helicopter money”, negative interest rates and digital currencies.

The obvious alternative – expansionary fiscal policy – has been out of political favour. But the challenges we face are far greater than those which could be addressed by government spending, even ignoring any Budget constraint. Countries that have undertaken less austerity face many of the same problems as we do.

Over the decade since the global financial crisis, living standards for most people have barely recovered. In the UK, real hourly wages have declined by more than 10 per cent since 2007. Precarious jobs and zero-hours contracts have become the norm in huge sectors of our labour market.

The system of tax credits and other in-work benefits has helped cushion the blow for many. But if wages are not rising, increased spending on tax credits needs to be paid for from tax revenues: Osborne’s attempted tax-credit cuts last autumn were a warning sign. This in turn will require levels of growth not seen since the crash. The same could be said for our NHS, which is facing an urgent funding crisis, as are many other public services.

As the labour market has hollowed out, with a few well-paid jobs at the top, overwhelmed by large numbers of poorly paid, insecure jobs at the bottom, our tax base has narrowed. There are limits to asking those who have experienced falling real wages to pay more, and the global super-rich have found it all too easy to treat taxes as an optional extra.

But responding to the politics of the recent past is not a viable option. We must acknowledge that the model that New Labour relied on to fund public spending increases is broken.

Wolfgang Münchau wrote recently in the Financial Times about the decline of European social-democratic parties, partly as a result of their failure to offer alternatives. It could be added that the assumptions that they were built on for 20 years are crumbling.

We do not have the option of relying on steady growth, driven by services and, in particular, finance. One of the sharpest shifts within the productivity figures is how the financial sector has gone from being a key contributor to productivity growth to a drag on it since the crisis.

At the same time, a nostalgic return to the postwar consensus is similarly impossible. Infrastructure rebuilding, the remnants of the British empire, a dramatically different political context and rapidly rising productivity drove wage and tax increases that transformed our society, thanks to the Attlee and Wilson governments.

Now, trend productivity is lower in the UK than in most G7 countries. According to researchers at the Bank of England and elsewhere, underlying growth has been in decline for some time: at least since the start of the 2000s, well before the crash. By some measures, it has been in slow decline since the 1960s. Government investment can – and should – help address this, but state investment cannot compensate fully for sluggish private investment demand.

The underlying reasons are uncertain. Talk of “secular stagnation” has come back into fashion, thanks to the US economist Larry Summers. This is where increased savings and a decreased desire for investment drive “neutral” real interest rates to impossibly low levels.

Politicians who correctly identify the problems often miss the target by placing the blame on central banks. Research from the Bank of England and the Federal Reserve Bank of San Francisco suggests that global real interest rates haven’t just been low since the financial crisis, but have declined significantly over decades, and are likely to remain low thanks to factors such as demographic change.

If true, this poses significant challenges for an economic model that has increasingly relied on monetary policy for macroeconomic stability. It also puts into context the complaints of politicians who seek to blame central bankers for the consequences of low interest rates, while refusing to take responsibility with fiscal policy.

There are several potential explanations for the long-term difficulties we face. The economist Robert Gordon of Northwestern University has written about “the end of growth”, as the stream of productivity-enhancing innovations of the past century and a half – world-changing inventions such as the internal combustion engine, better plumbing, the internet – dries up. Alternatively or additionally, the IMF has recently pointed to the overhang of debt that built up after the global financial crisis. This has refused to come down, a situation not helped by persistently low inflation. Janet Yellen, the chair of the board of governors at the Federal Reserve, recently hinted at the possibility that insufficient demand could harm potential supply-side growth.

Beyond the mainstream, post-Keynesians have spoken of the need for wage-led growth: one of the contradictions of resurgent capital has been to push down the purchasing power of the working population, limiting the scope for consumption growth. Meanwhile, Marxian economists blame the increasing role of capital in production for persistently low rates of profit in the real economy, resulting in lower investment and slower growth.

What can politicians do, if economists can’t agree what the problem is? I have said that we need to offer answers soon, and I tentatively suggest that these need to be in three areas.

The increasing automation of jobs, reduced dependence on carbon fuels, artificial intelligence and the so-called gig economy have provoked understandable anger among many workers whose jobs are under threat. More generally, concerns about the effect on the labour market are widespread: either threatening mass unemployment or a significant shift towards low-productivity, low-paid jobs.

This need not be the case. In a society where the benefits of technological advancement are shared, productivity gains can be made to work for the benefit of all. It requires original thinking – one possibility is a universal basic income – to suggest how we can make a society with less demand for medium-skilled labour become wealthier and less polarised.

Future automation is likely to hit service-sector jobs, while the fusion of digital technology with manufacturing in the “fourth industrial revolution” is creating new demand for highly skilled labour. This will demand a major policy response if we are to harness the potential of this.

Second, if we are to meet the needs of those who need health care, pensions and social security, we will need to find ways to tax wealth more effectively. Not just because it is fairer than taxing labour, but because our tax base has shrunk. And as more of the economy now goes to capital owners, taxing a fair share of this is essential to affording the public services that we want.

Finally, none of this is sustainable in the long term unless we change the ownership of this capital. Through new forms of democratic and small-scale ownership, such as employee-owned firms, and by sharing the ownership of society’s assets more broadly, we can reduce the need for redistributive intervention, while increasing society’s power to choose the future direction of our economy and address the urgent demands of climate change.

These issues are confronting left-wing political parties across the West. In the UK, we are now at a crossroads. We cannot afford to let out a sigh of relief at the end of Osbornomics. There is no guarantee that what comes next will not be worse.

We cannot allow our politics to degenerate into a fight between an inward-looking, regressive xenophobia and the failed economic liberalism of recent history.

Nearly 40 years on from Eric Hobsbawm’s warnings about the future of the labour movement, we have the opportunity to put an end to neoliberalism with a modern, inspiring, collective economic alternative. If we don’t offer a credible alternative, someone else will, and the results will be ugly.

Of course our immediate priority is to hold the government to account during the negotiations over Brexit, but at the same time we must be looking ahead to rethink how our economy works. I want the Labour Party to be at the centre of that, and I want as many people to be part of that conversation as possible: through our policymaking structures and at our forthcoming public national and regional economic conferences.

To coin a phrase: change must come. But what type of change, and for whose benefit, is up to us to determine.

The New Statesman, 03 November 2016

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Public Meeting on Third Runway

Dear Resident, 

Public Meeting on Third Runway

Heathrow School, Harmondsworth Lane, Sipson UB7 0JQ

 31st October at 7.30 pm


I am writing to invite you to a public meeting I have convened to discuss the Government's announcement to support the construction of a third runway at Heathrow airport.

The final decision will not be made until next year following further consultations and it is almost certain that there will be legal challenges to the Government's position.

It is vitally important that residents are fully informed of the consequences of a third runway, the process from here and how best to protect their interests.

I hope that you will be able to attend the meeting and I look forward to seeing you then.

Best wishes,

John McDonnell MP

Member of Parliament for Hayes & Harlington
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Only a Labour Government can make an economic success of Brexit

John McDonnell MP, Labour’s Shadow Chancellor, today gave a keynote speech at the Institution of Mechanical Engineers (IMechE) in London, where he made the argument that only a Labour Government can make an economic success of Brexit, as the Conservatives are not prepared to do the economic heavy lifting that is required to prepare our economy for leaving the EU.

He also said that the British people did not vote for a “Bankers’ Brexit”, which is all the Tories are offering as they look to cut special sweetheart deals for big business and bankers, whilst ignoring manufacturers and SMEs.

He set out his economic plans to rebuild and transform Britain, so that no one and no community is left behind, by taking back the economic levers of power that the EU currently have at their disposal, such as the reform of state aid rules and an end to enforced privatisation and deregulation, as part of the negotiations for a new relationship with the EU.

The Shadow Chancellor emphasised the importance of working with our European neighbours constructively to clamp down on tax avoidance and not threaten them with a race to the bottom in low corporation tax rates.

Mr McDonnell also warned that the Tories will try to strike a Brexit deal in which they create a TTIP-like agreement that allows privatisation through the backdoor.

In his speech today John McDonnell MP said:                                                

Theresa May has shown that she will change her mind on a major constituency matter like Heathrow. When she used to say she was: “firmly against plans to build a third runway at Heathrow..." as she knew her constituents would be “devastated”. 

She now talks of the “benefits of a new runway”. 

So can we say she won’t decide that Brexit means a Bankers’ Brexit at the expense of the rest of the overall economy? 

Just check the deleted web pages on her own website as a sign of her commitment. 

If she is willing to turn her back on her constituents to satisfy the Conservative establishment, then how can we take on blind trust that she will seek a Brexit deal that benefits everyone in our country and not just Tory special interests?

And nor can we trust Philip Hammond to speak for Britain in striking a deal. Just look at his record.

In 2013 when he was Transport Secretary and dealt with the Thameslink trains contract when it came to British workers fighting for their job, he chose to award a contract to an overseas country regardless of the job losses.

And his excuse? He was worried not about those workers losing their jobs, but upsetting Eurocrats.

Whether by design or by default, this Shambolic Brexit will end up where the Tories always end: looking after the few, not the many. Already, Tory Cabinet ministers are looking to cook up special deals for their friends in the City of London. While Tory backbenchers want to attack hard-won workplace rights. They want a “Bankers’ Brexit”, in the interests of an elite few, not the majority. They'll cut a deal for finance, but ignore our small businesses and manufacturers.

Labour will fight for all our businesses to have Single Market access, not just the favoured few. Let me be clear, those who have voted Conservative are not the same as the Tory establishment. Like me, you will have friends who have voted Conservative. They don’t want a Bankers’ Brexit any more than I do.

The simple truth is that the Tory establishment cannot be trusted to make a success of Brexit. They want to take control for themselves, not the many. They want to turn Britain into a Singapore of the North Atlantic. Not because they want to match the huge public housing provision that country offers for the many. But because they want to match the low taxes for the few.

The Tories would want to strike their own TTIP deal that would keep in place the backdoor privatisations of our NHS, and they would run down our hard-won employment rights.

Labour in government is the only party that would be prepared to take the necessary measures to make a success of Brexit.

Labour is committed to serious investment in our country that would make sure our economy can power through the stresses of Brexit, and help us rebuild and transform our country so no one and no community is left behind.

Labour is also the only party of government that has the necessary fiscal framework that will underpin it so we can take control of the public finances. We are also committed to making sure that Brexit works for everyone not an elite few. The Tories want to cut special deals for bankers, and cut taxes for big multinationals.

Labour would work with our European neighbours to protect our key industries like steel, and broker deals with the EU to make sure big multinationals like Google pay their fair share in tax. We will put the national interest first. The Tories will put their vested interests first.

Labour will take back the economic levers of power currently in the hands of the EU, such as over state-aid rules, and return them to the people.

Not a Bankers’ Brexit for the lucky few, but a People’s Brexit for the many.

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John McDonnell vows to keep fighting against 'devastating' third runway at Heathrow

Shadow chancellor John McDonnell has vowed to continue campaigning against government plans for a third runway at Heathrow and labelled them as 'devastating'.

The Hayes and Harlington MP has publicly campaigned against the runway and has vowed to persist 'so it never sees the light of day'.

He highlighted that up to 10,000 people could be removed from their homes, as well as an increase in air pollution and noise levels.

Releasing a statement via his Twitter account today, Mr McDonnell said: “I’ve campaigned against this runway for over 30 years and in that time Heathrow have never managed to win the argument for expansion which still remains the case today

“Nothing has changed. Building a third runway would be devastating for local residents who face losing their homes, schools, community centre and village life. It also remains a disaster for air pollution, noise levels and our effort to tackle climate change.

“4000 homes face the prospect of either being demolished or rendered unliveable by air pollution and noise. This means 8 to 10 thousand people being forcibly removed from their homes. We have not seen anything on this scale in our country’s history.

“I’ll continue to support my constituents in campaigning against this runway so it never sees the light of day.”

Mr McDonnell will host a public meeting on Heathrow’s third runway plan at 7.30pm on Monday 31st October at Heathrow Primary School.

Rob Guest, Hillingdon Times 25th October

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Labour’s economic policies more popular than the Tories’, new poll finds

As the dust from party conferences begins to settle, a new YouGov poll shows strong public support for Labour’s economic policies under Jeremy Corbyn’s leadership. But it also reveals a striking disconnect between support for policies and support for parties on specific economic issues.  

Despite a focus on the economy by Corbyn’s summer leadership campaign and Labour’s party conference last month, many voters appear unaware of the party’s stance on key economic issues. The survey asked respondents to identify policy positions that most closely matched their view in two broad areas: taxation and spending on the one hand, and public/private ownership on the other.  

With regard to taxation and spending, 45% of people support Labour’s anti-austerity platform (reversing the government’s planned spending cuts and increasing tax for the wealthiest). This compares to just 13% who support the current levels of cuts, and 22% who think the cuts should continue but be scaled back.  

On the subject of public/private ownership, 58% of people oppose any form of private sector involvement in the NHS while 51% support some degree of public ownership of the railways, mirroring Labour’s position on these issues since Jeremy Corbyn became leader. 

However, when asked which party “currently has the best policies on taxation and spending”, 30% identified the Conservatives compared to 16% for Labour. Even on “overseeing the balance between public and private ownership”, more people thought the Conservatives have the best policies (24%) compared to Labour (16%). 

Dr Justin Schlosberg, Chair of the Media Reform Coalition which commissioned the poll said “There is a worrying disconnect between the economic policies that many voters support and the parties they associate with those policies. We feel that much of the media have been more preoccupied with dismissing Jeremy Corbyn as ‘unelectable’ than with seriously reporting on the policies he represents. Since the economy is often the issue that wins or loses general elections, it is imperative that journalists now give due attention and scrutiny to the economic alternatives put forward by the official opposition, as well as other anti-austerity parties. This is not about a failure of communication on the part of Labour so much as a failure of nerve on the part of a great swathe of the news media. Without a change in approach, our democracy is in deep crisis”.

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John McDonnell; The Tories’ best business policies are our ideas.

The CBI and 100 business leaders are warning the consequences of a Tory “Hard Brexit” will cause massive damage to our economy and to business. This Government is prepared to sacrifice our living standards and scapegoat migrants to satisfy the right wing of their own party. Instead of proposals to publish divisive foreign worker lists, thankfully now abandoned by Amber Rudd, we need to show that Britain still remains open to attracting workers who bring many benefits to our economy.


Our policies are popular – even with the Tories At the same time, the Tories are trying to claim our ideas on investing in the economy to promote growth, and employee representation on boards to reform corporate governance. Given these polices are proving popular, Labour’s task now is to step up and become a Government-in-waiting.


Our plans for a National Investment Bank would help to create jobs and wealth while delivering the modern infrastructure which employers and others tell us we need. We’ll be designing an industrial strategy that can deliver growth right across the UK. We’ll be strengthening trade union rights to redress the balance of power, and designing a welfare system which is better able to support the self-employed.


Low pay must be a priority But most urgently of all we need to tackle the scourge of low pay in the economy the Tories have created. It simply cannot be right that over half of all those in poverty are in work, and it will only get worse as the Government’s cuts to Universal Credit leave millions worse off. Decent pay is not just fundamentally right: it’s good for business, it’s good for employees, and it’s good for Britain.


That’s why I announced recently that the next Labour Government will bring in a real Living Wage. An independent review body – not whatever government is in power at the time – will calculate what is needed for people to live on: and current forecasts are that this is likely to be over £10 per hour by 2020.


Of course some businesses will struggle, at least initially, to pay everyone this higher rate. Small and medium sized enterprises in particular may worry that they can’t afford it; which is why our Living Wage Review Body will also advise us on where and how we can provide businesses with support that this historic step forward in improving living standards won’t impact on employment. Decent pay is not just fundamentally right: it’s good for business, it’s good for employees, and it’s good for Britain.


We can win the argument again The minimum wage was one of the greatest achievements of the Labour Government elected in 1997. Though the Tories threatened it would cause mass unemployment, working together we proved them wrong and won the argument. Working together, we can defeat them again and deliver radical solutions to make millions of hardworking people in Britain better off. Together we can rebuild and transform Britain so that nobody and no community is left behind.


Inews: Monday October 10th 2016

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John McDonnell MP, responding to reports that a “hard Brexit” could lead to the treasury losing up to £66 billion a year in tax revenues, said:

Losing access to the single market would be devastating for jobs, livelihoods and our public services yet the Tory government are prepared to take this desperate step, despite being warned by their own experts of the consequences.


"The British people voted to leave the European Union and all sides must respect that decision, but what they certainly didn't vote for was economic misery and the loss of jobs.


"The Tories should be sticking to their manifesto promise and fighting tooth and nail for access to the single market. Instead they are abandoning Britain's clear national interests by putting narrow party political concerns first.


“It's time for Theresa May's government to show some responsibility and stop playing political games when our future as a country is at stake."

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John McDonnell MP’s comments on Facebook’s published tax:

Yesterday Ebay were accused of not paying their fair share in tax and today Facebook have been accused of the same thing. To ordinary taxpayers this looks like multinational companies playing by different rules to the rest of us.

"The Tories have dragged their feet for years on tackling tax avoidance which has created a climate where multinational companies think they can do what they want and not pay their fair share in tax.

The Tories should adopt Labour's Tax Transparency and Enforcement Programme which would stop the dodgy deals and finally put an end to tax avoidance.

There is nothing less patriotic than trying to get away with not paying your taxes."

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John McDonnell MP, Labour’s Shadow Chancellor, responding to today’s ONS trade and manufacturing statistics and the fall in value of the pound said

Today’s trade and manufacturing figures demonstrate the immense challenges facing the UK economy after years of Tory failure. 


“Unfortunately, it comes off the back of the Conservative Party Conference were we heard nothing about the Tories' plans to boost UK exports and support the UK economy.


The widening trade deficit, sluggish growth in exports and falling manufacturing output despite the weakening pound all highlight the recklessness of a Tory Government that failed to plan for a Brexit vote and which continues to have no answers to the challenges facing the UK economy.


The country deserves better; the Government has no answers and no plan for working people and for the UK economy. Only a Labour Government will stand up for working people and build a fairer economy that works for all”

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John McDonnell MP, Labour's Shadow Chancellor, responding to the Chancellor's speech at the Conservative Party conference in Birmingham this morning

This morning Philip Hammond may have performed a u-turn on investment spending, admitting that the failed 'long-term economic plan' never really existed, he still intends to go ahead with cuts to in-work benefits, and local authority funding. 

Labour is now the only national party with a fiscal frame work that supports patient long-term investment in our economy, and it's clear that Phillip Hammond is now borrowing from Labour to invest in his own speech. As well as abandoning their own fiscal charter this was full of the same empty promises George Osborne made, only with worse gags. 

The Chancellor should apologise today for the failed Tory approach that has meant he has had to abandon the failed economic agenda of the last six years, an approach which has seen them dragging their heels on tax avoidance, an increase in child poverty, and house-building falling to its lowest peacetime rate since the 1920s. The dangerous divide in society the Chancellor mentioned has come about as a direct result of the policies he has voted for since 2010. 

There is clearly still a need for increased investment in our economy to equip our country for the future after Brexit, as well to overcome the last six years of Tory under-investment, but if they pursue a 'Hard Brexit' strategy we know that the Tories will continue to make working families pay for their failure. 

Therefore, although we welcome the Chancellor abandoning George Osborne’s fiscal approach, justifying Labour's approach in opposing it, he still needs to now actually provide the investment we really need. That is why Labour has consistently called for an investment programme in line with what many independent experts are calling for, and the timing of which will be based upon OBR forecasts and the timetable for Brexit.  

Otherwise everything he said today will be undermined by the Tories' Hard Brexit strategy that could see us facing around £40 billion risk to the public finances and put British business at a serious disadvantage.

In contrast, Labour's Fiscal Credibility Rule provides the robust framework needed to deliver financial stability and investment, so that our country can have a high-wage, high-tech economy of the future, in which no one and no community is left behind."


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John McDonnell MP, Shadow Chancellor, speaking at Labour Party Conference 2016





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Labour will set our economy on the right path—and a return to 1945 or 1997 is not the answer

At the heart of Britain’s economic issues is the failure to invest. Business investment remains lower than its pre-2008 peak, and, improbably, the government plans to cut its own investment further. The result is an economy that relies on substituting cheap labour in the place of capital. As research by John van Reenan and others has shown, this has become pronounced since 2008.

OECD figures suggest that real hourly wages are down 10 per cent since 2008. This makes the UK the worst performer in this respect in the entire developed country OECD group, bar Greece. 80 per cent of those in work have seen either flat or falling pay since the crash. We are facing a “lost decade” for living standards. But with de-industrialisation over the last forty years, the relatively stable well-paid jobs that manufacturing has supported have become thinner on the ground. The labour market has hollowed out, with a few, very well-paid jobs at the top—and ranks of lower paid, increasingly insecure jobs for the rest. Worryingly, forecasts cited by Andy Haldane at the Bank of England suggest that 15 million jobs are open to being automated out of existence over the next decade.

Factor in the concerns raised by the discussion of “secular stagnation” in the developed world, with low or zero growth persisting, and the future for our economy can look bleak. Britain has compensated for its structural weaknesses with debt, both in its domestic, private sector borrowing, and internationally, with our record current account deficit necessitating huge borrowing from and assets sales to the rest of the world.

Under these circumstances, hoping to turn the clock back to 1945 or even 1997 is simply not an option. Our economy needs restructuring if it is continue to provide rising living standards and the high-quality public services we demand. We need to think not only about how to spend money, but how to earn it.

The opportunities are there if government is prepared to take them. Manufacturing is going through a renaissance, on the back of new technology and more sophisticated processes. One in six UK manufacturers have “reshored,” bringing production back from overseas, in the last few years. The most adept governments are those able to take advantage of this shift, as in the German government’s “Industrie 4.0” programme.

Our party’s economic policy falls into three parts. First, an iron commitment to fiscal stability. Our Fiscal Credibility Rule, drawn up in consultation with world-leading economists, was originally announced in March. The basic idea is simple: we will spend only what we can afford, but ensure government has the capacity to invest in transforming the economy. And of course we will stand ready to use fiscal policy if economic stability demands it.

The second plank is our investment commitment, totalling £500bn, between a £250bn National Investment Bank and network of regional development banks, and a £250bn public investment commitment. All of this will fit inside the fiscal space currently provided by the Fiscal Credibility Rule. That £250bn figure, if invested over ten years, would represent a doubling of current public investment, bringing the UK up to OECD standards.

We would look to address the huge inequalities in investment, where planned public investment in London is over £5,300 per head, but in the north east only £413. We’ll provide for high-quality transport across the whole country, alongside a commitment to meet the best broadband internet standards in the world, matching the schemes being introduced in China and South Korea. And we’ll lift science and technology expenditure, reversing the £1bn real terms cuts George Osborne oversaw and aiming to meet the OECD 3.5 per cent of GDP target for public and private sector research spending. Britain’s science base is amongst the best in the world. We should be building on that history and success. We’ll move to rapidly decarbonise our energy system, putting Britain at the head of action on climate change—and building on our natural advantages to tap into the $630bn global renewables market forecast for 2030.

We’ll also establish a new National Education Service, ensuring that everyone, from the youngest to the oldest, has access to the best possible education and training, providing the skills our emerging high-tech economy needs.

Finally, we want to transform corporate governance, and spread company ownership far and wide. The lack of direction from government and the excessive focus on private financial returns has generated a short-termism in our big corporations. We aren’t delivering the investment needed to take best advantage of the opportunities there. Changes to corporate law, restricting some of the bad practices that characters like Philip Green have exemplified, and providing a bigger voice for the workforce are an essential part of this. The regional development banks will help promote small businesses, and co-operative and worker ownership across the economy, recognising the major productivity benefits these bring.

We’ll work with businesses, unions and customers to deliver a comprehensive industrial strategy for the UK, so that no-one and nowhere is left behind.

John McDonnell / September 20, 2016 / Prospect Magazine

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Jeremy Corbyn has been on the right side of history for 30 years. That’s real leadership

What makes a leader, and what is leadership? We are told every day that Jeremy Corbyn is not a leader, from Hilary Benn’s “He’s a good and decent man, but he’s not a leader” to the Daily Mail saying Corbyn “is the worst Labour leader in history”. But in spite of the relentless Corbyn-bashing, beyond the ability to win elections (Owen Smith: seriously?) there has been little discussion of what a leader, or leadership, means.

The adjective that sidles up most insistently to “leader” tends to be “strong”. For a strong leader is the thing to be. Margaret Thatcher was a strong leader. Tony Blair was a strong leader. David Cameron? He had pretensions in that direction. Theresa May’s performances at PMQs suggest she believes she too belongs in the strong leader club, and that condescension and archness are the way to achieve it, though her bid for membership took a turn for the worse this week when Corbyn challenged her on grammar schools.

Not all of us, however, are quite so in thrall to politicians who take voice coaching, visit bespoke tailors, employ image groomers, holiday with media moguls, or jettison past commitments (Blair’s unilateralism, for instance) when these things start to get in the way of a smooth ascent; and – to prove they are really strong, that they have the guts to take the really difficult decisions – bomb or invade some of the poorest countries on Earth.

On Wednesday a foreign affairs committee chaired by the Conservative MP Crispin Blunt delivered its excoriating verdict on David Cameron’s Libyan adventure. Few people will rush to Cameron’s defence. Yet the former prime minister might be forgiven for feeling a pang of irritation at the committee’s uncompromising verdict. In March 2011, when Cameron went to the Commons to propose bombing Libya, no fewer than 557 MPs voted with him. Just 13 voted against. 

Those 13, just in case anyone is interested? They did not include Crispin Blunt. They did not include Theresa May. They did not include Owen Smith, Corbyn’s rival for the Labour leadership or Angela Eagle, who kicked off the leadership challenge (she abstained). But they did include Jeremy Corbyn and John McDonnell. That’s what many of us call leadership.

Just last year Cameron was at it again, sombrely assuring the country that the deployment of Britain’s air power over Syria was essential for the defeat of Islamic State. It showed how little MPs had learned from the catastrophic interventions in Afghanistan, Iraq and Libya that the government was able to muster another majority. But it did. Among those who opposed, amid the familiar howls and insults and questions about their patriotism, were Jeremy Corbyn and John McDonnell.

Spooling backwards to March 2003, and the eve of the invasion of Iraq, when Blair told the house that Saddam Hussein’s weapons on mass destruction not only justified invasion but necessitated it as an urgent act of self-preservation, 412 MPs voted for the war, 149 against. Leading up to the vote, the government whips subjected Labour MPs to every kind of inducement and coercion – much of it highly unpleasant – in an effort to get them to support invasion. Those who held out were branded appeasers and cowards. Among them? No prizes for guessing: Jeremy Corbyn and John McDonnell.

When it comes to foreign military intervention, do I look to strong leaders or to someone who has, over 30 years in parliament, consistently shown that he makes the right call? Those MPs who now shake their heads in dismay at the utter calamity of Cameron’s bombing of Libya and Blair’s invasion of Iraq had the chance to make the right call.

But they didn’t. They failed. At the time when it really mattered, when the vote was before the House, when the issue was live and front and centre, they failed. Their judgment, their principles, their ability to stand their ground – they all went missing.

It is all very well to say, years after the event, that you believed the prime minister when he said that Saddam had weapons of mass destruction, or that bombing Gaddafi would bring peace and democracy to Libya. But what counts is what you do in the moment. What counts is where your vote goes. That’s when you get your chance to make the right decision.

Time after time, the Labour party’s worst leader in history has called it right. When he had a full head of hair and weighed a pound or two less, he was out on the streets marching (and being arrested) for the end of apartheid in South Africa and the release of Nelson Mandela, who was then branded a terrorist. I know because, like thousands of others, I saw him there. We didn’t see the iron lady, Margaret Thatcher. And maybe I wasn’t looking hard enough, but I didn’t see Tony Blair either.

When the scandal of systematic miscarriages of justice involving innocent Irishmen and women was at its height in the 1980s, desperate families approached senior members of the Labour opposition for help in reopening the cases. They were rebuffed. Anti-Irish sentiment was rife, and there were no votes for responsible politicians in helping Irish prisoners against the police and judiciary. Who took up their cases? Jeremy Corbyn and John McDonnell (not forgetting Chris Mullin’s powerful work on behalf of the Birmingham Six). Corbyn and McDonnell had the courage – and it took courage back then – to campaign and organise. But that’s what leaders do. 

On ID cards, on extended detentions, on equal pay and gender quality, on protection for workers and trade union rights, on anti-racism initiatives, on tax avoidance by the super rich, on the bedroom tax, on the recent welfare reform bill (Owen Smith? He abstained), on PFI – a massive, shameless scam perpetrated by financial institutions already as rich as Croesus, aided and abetted by government, that has brought the NHS to its knees – Corbyn and McDonnell called it right.

Give me this kind of leader anytime.

Ronan Bennett Guardian Opinion 15th September 2016

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John McDonnell MP, Labour's Shadow Chancellor, speaking at the Co-operative Party annual conference in Cardiff:

Co-op.jpg“I want to pay tribute to the Co-operative Party which is now 99 years old and looking forward to its century next year.

"It is refreshing to be addressing the Co-operative Party who have partnered with the Labour Party through thick and thin since our electoral pact in 1927. It’s our unity as a movement that has always been our strength.

"But let's be clear: the whole labour movement is at a turning point.

"The Leave vote was one marker for that. Simply put, it means the status quo is no longer an option.

"The despair that helped fuel the vote to Leave was driven by a deep disaffection with the political process.

"Successive governments have used an economic model that concentrated too much wealth in too few places and in too few hands.

"It was this model that spectacularly blew up in the crash of 2008, and whose consequences we are still living with.

"But the challenge for the labour movement stretches beyond criticising the failures of the old model.

"We have to recognise that if our solution to the crisis today is to pretend the clock can be turned back, we will fail.

"Since the Second World War, a political strategy has come to dominate the left that stressed the central importance of central government in transforming society.

"A successful progressive government would just have to oversee growth, and then redistribute the proceeds.

"The strategy for the left was then to win control of the state, and use the state to redistribute incomes from a growing economy.

"For seventy years, through Old Labour and New, this fundamental model of social democracy held.

"Some of Labour's greatest successes were built on this model, whether the NHS or Sure Start centres. Tax money was taken from rising incomes and spent in a progressive manner.

"That model now seems to have come to an end.

"The economists talk about “secular stagnation”, which is the idea that the developed economies are in for a period of extended low growth. The International Monetary Fund, in its latest forecasts, has downgraded its expectations for economic growth in the developed world.

"And we know from OECD figures, analysed by the TUC, that real hourly wages have fallen 10% in this country since the crash – a worse performance than any other OECD member, except for Greece.

"We have to search for a different approach.

"The next Labour government will stand ready to invest across the whole country.

"Whilst this government still intends to cut public investment in real terms over the next few years, we know that it is investment that will deliver the economic transformation this country now urgently needs.

"That is why we have proposed a £500bn investment programme, backed up with a National Investment Bank and a network of regional development banks.

"This will deliver the funding needed to allow every part of our country and every person to reach its full potential.

"There's a growing consensus, in these times of economic uncertainty and faltering economies, that public investment is essential to delivering prosperity.

"From the OECD to the IMF, and from the TUC to the CBI, responsible organisations concerned with the state of our economy have identified public investment as central.

"It beggars belief that Phillip Hammond has not already turned his back on former Chancellor George Osborne's failed austerity strategy"

The co-operative economy

"The evidence that co-operative enterprises and worker-owned companies can produce far better results is compelling.

"Twice as many co-operatives survive the crucial first five years as other businesses. And worker-owned enterprises offer a clear productivity advantage.

"So that is why after this conference season is over, we will begin a major piece of work on developing the co-operative economy.

"With UK productivity now lagging further and further behind the US, Germany, and France, it’s time to turn the corner on the model of economic growth that promotes low-paid, insecure work in huge quantities.

"It's a disgrace that zero hour contracts have risen by 20% in the last year alone.

"But by giving people a stake in the companies they work for and spreading the ownership of those companies, we can start to transform corporate Britain.

"That's why I've argued for a “Right to Own” for employees. If a company is facing a change of ownership or closure, they should have first refusal on forming an alternative employee-owned business plan.

"Backed up by financing from the new regional development banks, who will be tasked to deliver low-cost financing to co-ops, this can be one way to resolve some of the issues now bearing down on our local economies.

"With two-thirds of Britain's family businesses at risk of closure when their owners retire, employee ownership can help solve our brewing succession crisis.

"But we should be looking to the examples of Germany and the US and elsewhere, where co-operatives form a major part of how their economies operate.

"I want to see the next Labour government put in place measures that will at least double the size of our co-operative sector, giving a nearly £40bn boost to the whole economy.

"We'd look to introduce legislation to assist the formation of mutual guarantee societies, mobilising funds for small businesses by enabling them to club together to raise credit.

"Over 8% of lending to SMEs across Europe is made through mutual guarantee societies. We can end the starvation of funding for our small businesses here.

"We plan in the coming weeks to launch a guide, jointly with the Association of British Credit Unions, helping councillors and local authorities up and down the country to support the work of local credit unions."

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Labour publish the First Stage report of its HMRC Review

HMRC_Review.jpgThe Labour Party today is publishing the initial report of its review of Her Majesty’s Revenue & Customs (HMRC). This first stage of the independent review has been carried out by a team led by Professor Prem Sikka (University of Essex) with the aim of enhancing HMRC’s efficiency, effectiveness and public accountability.  

The report recommends:

  • The formation of a Supervisory Board, consisting of stakeholders, to watch over HMRC’s Board to give it direction and enhance its public accountability.  The board shall act as a bulwark against corporate capture and inertia and be accountable to parliamentary committees.
  • The Supervisory Board should support and protect tax whistleblowers.
  • Additional investment in HMRC resources and staffing.
  • That HMRC needs local knowledge and must respond to citizens’ concerns. This is best achieved through a network of local offices and staff with local knowledge.       
  • That HMRC should have a well-resourced internal investigation and prosecution unit. This would strengthen its in-house institutional knowledge base.
  • That HMRC should offer competitive financial rewards to its staff.
  • Tax returns, related computations and documents of all large companies must be made publicly available. The public availability of corporate tax information will improve the quality of information available to parliamentary committees to scrutinise the effectiveness of HMRC in meeting its objectives.
  • Parliamentary committees should be empowered to examine any tax information, no matter how sensitive. It would be up to the relevant parliamentary committee to decide whether scrutiny of any documents and practices should be conducted in private or closed meetings
  • The backlog of tax cases creates uncertainty and anxieties. This is also unfair to taxpayers. The judicial capacity to hear cases should be expanded.
  • Various reports published by HMRC should contain information that enhances transparency and accountability.
  • Public pressure is a vital ingredient in transforming HMRC. It should not be diluted by the introduction of fees to challenge tax assessments.
  • HMRC needs effective tools to combat sham. We recommend a rewrite of the General Anti Abuse Rule (GAAR). HMRC should be guided by the Department of Justice and/or a panel of retired judges, rather than by people from the corporate sector. 

John McDonnell MP, Labour’s Shadow Chancellor, said: 

“I welcome this very important contribution to the debate about tax in this country, and I would like to thank Professor Prem Sikka and his panel of experts for their enormous contribution. 

“The public want to urgently see more action on tax avoidance but the Government have made things words by cutting staff and resources at HMRC. This report lends further support to something we have been arguing for years: that HMRC needs more accountability and resources to deal with tax avoidance and evasion. 

“Labour will be looking at the report’s recommendations in great detail while we develop our policies in this area, and also discussing how to take the review forward to the next stage. 

“It’s only under a Labour Government under Jeremy Corbyn that the UK can get a serious grip on the problems of tax avoidance and evasion.” 

Professor Prem Sikka said: 

“HMRC performs a vital task in collecting taxes, enforcing lax laws and delivering services to taxpayers. Against a background of reductions in resources, it has experienced considerable difficulties in meeting the service expectation of taxpayers and challenging organised tax avoidance. We have investigated the difficulties and made recommendations to strengthen HMRC and its public accountability.”



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John McDonnell MP, Shadow Chancellor, responding to today’s reports that the UK financial sector is to raise concerns with the Prime Minister on access to the single market.

John said “Today's reports on the threat represented to Britain's financial services industry and the employment it supports shows the real dangers presented to jobs and the economy from the Tories' lack of preparation for Brexit. It is typical of the Tories to now be pulling together a backroom offer that defends financiers whilst failing to clarify how they will defend the workplace rights of working people. In July I set out five principles that must be respected during negotiations to leave the EU, which included protecting the access rights of UK financial services firms alongside freedom of trade, protecting workers’ rights, maintaining our role in the European Investment Bank and protecting the rights of EU citizens currently living and working in the UK and UK citizens in the EU.


Labour has made clear in its five red lines for Brexit negotiations that it will not support a deal that significantly harms financial services' market access to Europe, which can include passporting rights. However, the Brexit vote shows clearly that we cannot presume business as usual will continue. All sectors of the UK's financial services industry will need to continue to demonstrate that they are prepared to make a fair contribution to national prosperity and that their activities produce genuine social value, rather than socially useless activities, to retain public support in any future deals on market access.


The Government must bring forward without further delay its options for future financial services market access and make clear its preferred negotiating position before the damage caused by delay and confusion impacts on jobs and prosperity."


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John McDonnell MP, Labour’s Shadow Chancellor, commenting on NIESR’s monthly GDP estimate

"The evidence is beginning to mount about the lack of preparation for the referendum on behalf of the Tories. Not only did they fail to plan for a Leave vote, but their economic policies have left our economy weaker and more vulnerable as a result of their failure to invest for the future.

"Report after report is showing the impact the Leave vote is having.  The UK economy needs immediate investment from the Government, rather than sticking to the failed policies of George Osborne which have helped create the problem. “

“Without urgent intervention the jobs and prosperity of millions of people could be at risk. Britain is on hold waiting for Philip Hammond to tell us what approach he is planning to take, and we can’t wait until the Autumn. It’s time the Chancellor got off the sun lounger and started to show the country he has a grip."

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John McDonnell’s speech at The National Glass Centre, Sunderland

sunderland.jpgThe vote to Leave the EU presents every single one of us in politics with a challenge: to think big and adjust our policies rapidly to the new situation. 

So today I want to announce a major new commitment from Labour to the British people. A policy that will form the lynchpin of everything else we do to rescue Britain’s communities from decay; and to rebuild Britain’s industries after years of neglect. 

Britain’s relationship with Europe and the rest of the world has now been thrown open to question in a way that it hasn’t been for decades. Labour will not hesitate to defend the interests of working people in the UK, whatever the negotiations throw up. 

I have laid down clear red lines that Labour will insist future proposals on our relationship with the European Union cannot cross. These will protect jobs and existing rights for those who live and work here. 

But there are consequences for the domestic economy, too, and it is those that I want to address today. It is impossible to understand the vote to Leave without understanding how our economy is failing so many. 

One part of this is clear. George Osborne leaves behind a legacy of failure. We said austerity was a political choice. He chose it. The result was spending cuts on a scale not seen for generations. We’ve got public services cut to the bone and in some cases beyond.  

We’ve got million people using foodbanks in the sixth richest economy in the world. And investment has fallen, dragging down productivity. Our economy has become far too dependent on low-paid, insecure work as a result. 

Worse yet, spending cuts have hit the places least able to cope with them the hardest. If you live in one of the poorest boroughs – the bottom 10 per cent on the deprivation index – you’ve seen councils cut spending by £288 per person since 2010. What’s the figure for the top 10 per cent? £44. 

Disgraceful injustice. And those who suffer are: elderly people, disabled people, children at risk, council tenants – and council workers who are being asked every day to do more with less. The injustice here is painful - but it is also unnecessary. 

Labour told David Cameron that austerity is a political choice, not an economic necessity. We told him it would fail. We told them their targets would not be met. We were right. Today, in the wake of the Brexit vote, we can see that argument’s the Conservatives rejected – and Theresa May rejected - is close to becoming a consensus. The failures of austerity are all too obvious.  

However, the anger behind that vote runs far deeper than just the last six years. New analysis from the Resolution Foundation shows that it was long-standing economic injustice that helped drive the vote to Leave. Communities that had been left behind, with higher unemployment, helped determined the outcome. 

So the vote represents the wholesale rejection of an economic model that had been promoted by a few people at the centre of national political life. That economic model promoted the idea that if a lucky few at the top did well, the rest would surely also benefit. 

If you believe that, it’s logical to cut taxes on the rich, and on the big corporations. It’s logical to let tax avoidance rip on an industrial scale.

But here’s what we’re left with. The ruins of an economic model. Lives ruined by low pay, poor prospects, massive debts and a disastrous shortage of affordable homes. Some were winners, many others lost out. 

If you had the good fortune, for example, to work in financial services and own a property in London, you would have done extraordinarily well. But the better-paid, secure manufacturing jobs that were lost in the rest of the country over the last thirty years were too often replaced by poorly-paid, insecure work. 

Some of this work went to those who already live here, but some went to migrant workers from across the EU. We know why they came: to build a better life – and they had, and still have a right to. But too many employers used those new arrivals as exploited labour; kept in the dark about their rights; ripped off; forbidden to organise trade unions; sacked on the spot. 

It was to New Labour’s credit that it addressed some of the injustices of globalisation. Growth in inequality, which had risen so dramatically since 1980, was restrained during its time in office. But the inequality was not reversed. The UK has the worst regional inequalities of any current member of the European Union. 

And while we have some of the richest places in the whole continent, with central London as the single wealthiest place in the EU, more than three-quarters of the country earn less than the EU average. We can’t tolerate a situation where too many of our people live in places that are being left behind by economic growth. Under a Labour government – nobody, no town, now community, no region will get left behind. 

There is growing recognition today that we need a stimulus to mitigate a likely recession, in the wake of the vote to Leave. Andy Haldane, chief economist at the Bank of England, has argued for a big package of monetary measures to intervene against any downturn. I urge Theresea May to listen to Mr Haldane – not to any stay-behind right wing fundamentalists from the George Osborne fiasco. 

The areas most exposed to any shock and recession will not be the richest. The North-East exports more goods to the EU than any other English region, per head of population. It also receives more EU structural funding support than any other English region. The Government needs to tell us, now, what it’s going to do to stop North East’s trade relationships being damaged by Brexit. And Government must act to safeguard the £10billion of EU regional funding that is now at risk of being lost.  Either it should ensure funding remains in place, or it must guarantee the funding itself. 

Brexit is not happening in a vacuum. All over the world – as we fight to avoid the threat of stagnation identified by central banks – the old assumptions about how the world works no longer apply. The old idea that states could no longer play any role in the economy is breaking down. We’ve seen this with steel, where steel dumping by China has been met by concerted state action to protect domestic steel industries, from tariff barriers in the US to nationalisation in Italy. 

The Government’s failure to properly protect Britain’s essential steel industry suggests that it is not equipped to think through and act on these changes. There is a risk they will push the effects of any shock from the Leave vote onto the poorest and most vulnerable, and leave the whole economy adrift in an uncertain world. 

I fear, too, that the legacy of the last thirty years leaves this economy weaker than it ought to be to cope. Its low productivity, its dependence on domestic borrowing and its extraordinarily poor current account position all point to deep-rooted problems. 

We need decisive action to transform our economy. We need a break with the failures of the past. We need an economic strategy that builds on the real strengths that exist outside of the City of London. We need a government committed transforming economic outcomes for the benefit of the majority of our people, not just the rich. We need the country outside of the City and Westminster to take back control of their own economies. We need an economics that insists no one will now be left behind. 

Here’s what Labour plans to do. 

At the heart of Britain’s economic problem is poor productivity. Since 2007, productivity growth in the UK has stagnated. Every hour worked here on average produces one-third less than the average hour worked in the US, Germany, or France. Without sustained improvements in productivity, it will be harder to make real improvements in most people’s standards of living. 

The underlying problem here is the weakness of investment in the UK. Investment allows firms and workers access to new technology and ideas, and is the quickest route to drive productivity growth. Business investment in the UK was falling well before the Leave vote, and now looks set to fall further. And yet this government is currently looking to cut its own investment. 

Government investment spending is set to fall in every year from now until the end of the decade. This is uniquely damaging, since it is government investment that can provide the long-term spending on infrastructure that the private sector is unwilling to make. 

There is a near consensus today amongst economists and responsible organisations on the need for government to invest and provide the secure foundations for economic growth. From the OECD to the IMF, and the CBI to the TUC, there are demands for governments to step up. 

In the case of the UK, weak investment has meant increasingly poor infrastructure. We have been slipping down the World Economic Forum infrastructure rankings. This national weakness in infrastructure is then exaggerated by the imbalances in regional funding. 

London receives nearly half of all English infrastructure spending. Spending per head in the capital is more than £5,300. Spending per head in the North East is just £414. We know London has exceptional needs, but a gap on this scale is hard to justify. This isn’t about pulling down the successes. It’s about lifting our sights. 

Even raising public investment in the North East to the national average per capita would increase it by £7billion a year. As the OECD has argued, additional spending on infrastructure where infrastructure is already robust produces lower returns.

It is the places where that spending has been lacking that hold the greatest potential. 

We know there is huge potential here in the North East, as there is across the North of England. We can start to think about how and where future growth will come from, and plan for it now. The Northern Powerhouse Independent Economic Review identified particular strengths in advanced manufacturing, the life sciences and the digital economy. 

There are world-leading universities and research centres. The North East is an exports success story. It is the only English region to run a trade surplus with the rest of the world.  

We can see, in ten years’ time, how its economy can build on these foundations as an outward-looking, productive and fairer economy. 

But building on those strengths will need more than just the marginal tweaks of past years’ policy. We need to approach the future with confidence. Our country needs a programme of economic transformation. That must start with addressing the funding imbalance, and delivering the investment needed to kick-start high-quality growth. 

We should be aiming for nothing less than a transformation of the economies of the North. The potential here has been identified. The Northern Powerhouse Independent Economic Review suggested 850,000 high quality additional jobs can be created. But that vision won’t be achieved without a serious commitment of resources. 

At a time of grave and growing uncertainty, it is up to government to support the transformation of economies and to supply the long-term, patient investment where the private sector cannot. We can unlock the potential of the North of England with a push to deliver the sort of infrastructure and investment it has been deprived of for too long. And we should match this with a new approach to meeting the aspirations of those who live here.  Whitehall doesn’t always know best. Nor does the City of London. 

We should be handing the power to make decisions about local areas back to the people who know them best – those who live here. Devolution has to be more than a slogan. It has to mean trusting those across the rest of the country to make the decisions that are best for themselves. It means giving employees real power in their companies, with seats on boards. It means employee ownership and new co-operative enterprises to give those who work a stake in the wealth of society. Central government should be there as the backbone for this transformation. 

We should aim to match the best in the world for infrastructure and investment. South Korea, Singapore and China are moving to install ultra-fast fibre-optics, delivering speeds of one gigabit per second – or about 300 times current typical UK broadband access speeds. This will be the new frontier in connectivity. 

Why shouldn’t the North East aspire to meet that? And why shouldn’t our towns and cities provide free wifi access, just as they do now in towns and cities across the US. Our transport networks need overhauling. Rail electrification has progressed too slowly.  Bottlenecks and delays directly impact on productivity. This isn’t just about the big plans for high-speed rail. 

It means delivering the local improvements in connectivity that will make the biggest difference to those areas currently missing out on the economic and social benefits of high-quality public transport. 

There are projects held up by a lack of funding, and a lack of willingness of Government to deliver. We need to break out of the old Treasury model, which thinks that it doesn’t matter where growth occurs, as long as it occurs somewhere. 

This is quite wrong. Where growth happens and who benefits from it should be the fundamental questions of economic policy. But to break the hold of Westminster thinking, we need new institutions.  Government can commit to spending additional funds. 

For a stimulus, Government can and should mobilise its own resources to deliver shovel-ready projects. But the patient, long-term investment required for future growth needs something new. 

So today I am making a firm pledge: on coming to power, Labour will set up a National Investment Bank, and a network of regional banks whose aim is to help mobilise £500bn into the economy and transform Britain. 

A National Investment Bank, managed independently of government, can raise the financing needed to deliver infrastructure on this scale. By mitigating the risks and giving a firm, government-backed commitment to funding, it will draw in the private financing that has otherwise been wary of financing infrastructure in the UK. 

There are examples across the world of similar, successful banks. The model of KfW Banks in Germany is one of the most compelling. By working with regional banks, it helps sustain economic growth across the whole the country. 

So as well as our proposal for a National Investment Bank, we would look to establish a network of regional banks, publicly accountable and locally managed, with specialist local knowledge. These would break the logjam in the British financial system. 

By being closer to a locality, and by making decisions based on local needs, they will be able to deliver the capital that our current financial system cannot. A ‘Bank of the North’ could help unlock the potential of the North of England, delivering finance for critical local infrastructure and supporting lending to high-potential local businesses. 

It would mean starting to deliver on the promise of high-quality jobs. Weak investment has damaged job creation, and particularly high quality job creation in the private sector. The argument that cutting public investment would lead to a private sector resurgence has been proved wrong. It has led to the zero hours contract economy of mass insecurity and poor pay. 

Public funding does not ‘crowd out’ private. Instead, sustained public funding can help ‘crowd in’ investment from the private sector. The North-East Independent Economic Review suggests that if the North-East had similar levels of private sector job creation to comparable regions, another 70,000 jobs could be created. With an ambitious programme of economic transformation, it will be possible to beat that. Crowding in extra private investment by providing the high-quality, public funding. Together, these will transform the economic possibilities here. 

We should be aiming to create 100,000 additional well-paid, secure jobs across the North-East.  The funding to deliver this, and to transform the rest of the economy, should be top priority of any Labour government. The UK’s infrastructure requirements over the next decade or more come to £500 billion of additional spending. 

With £250billion of government funding, we could look to massively enhance the UK’s current public sector net investment. We wouldn't just reverse the planned cuts to investment. We would lay the foundations for a new economy. 

And with £100billion for new public national and regional banks, on the same conservative leverage ratio as the European Investment Bank we could look to deliver an additional £250billion of long-term, patient investment. 

But at a time when bond yields are the lowest ever recorded, private sector growth is weak, and there are good projects and decent companies crying out for funding, this is the scale of investment we need. 

We have to reverse an historic injustice. Globalisation and government policy have done huge damage to too much of our country. So much potential has been wasted.  So many lives have been blighted by the failure of the old economic model. It is time to turn our country around. 

Labour has offered bold visions for the future before. We set up the National Health Service. We delivered a welfare state. We must now raise our sights once again. We should now work to build a transformed economy where no-one is left behind. 

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John McDonnell: voting restrictions could rig Labour leadership race.

John McDonnell has accused members of Labour’s national executive committee of attempting to rig the leadership contest by changing the rules to prevent more than 130,000 new members from voting.

The shadow chancellor, one of Jeremy Corbyn’s closest allies, said there was “widespread concern and anger” about the decision that only people who had joined the party before January this year could participate in the forthcoming leadership contest.

Speaking to the Guardian, he added: “And the decision to increase the fee to become a registered supporter from £3 last year to £25 this year – and to leave just 48 hours in which to sign up – both discriminates against the low waged, unemployed, students and the elderly and is an affront to Labour values.

“These decisions, taken by Labour’s national executive committee [NEC] this week, will be widely seen at best as turning our back on an open participatory party democracy, and at worst as an attempt to gerrymander and rig the leadership election.”

McDonnell said the huge increase in members in recent weeks, thought to be mainly from people who want to back Corbyn, ought to be a cause for celebration. To “lock those members out of the right to vote” was a step backwards for Labour and a step backwards from party democracy, he added.

Regardless of any legal action that may be taken, the national executive needs to think again and reset rules for the contest that makes this leadership election the most open and democratic the party has ever held,” McDonnell said.

He added he was deeply concerned that members had not been consulted before the NEC decided to ban all local party meetings. “This is of particular concern over the next few months and sends a negative signal to the membership.

Anushka Asthana Political editor Guardian, Friday 15 July 2016  

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John McDonnell MP, Labour’s Shadow Chancellor, responding to the reports that George Osborne intervened on behalf of HSBC over money laundering accusations, said:

"Serious questions about George Osborne's actions are raised in a congressional report on investigations into HSBC.

“The Chancellor urgently needs to clarify whether he thinks that there are circumstances in which it is acceptable for financial service companies to potentially break the law and avoid prosecution. And he should clarify if he had received representations from HSBC prior to writing to Federal Reserve chair Ben Bernanke, seeking to sway the US investigation.

"It is not acceptable for any institution to place itself above the law, however powerful or financially important. It is hard to envisage circumstances where the Chancellor of the Exchequer should be using his office to interfere in a criminal investigation."

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John McDonnell MP, Labour’s Shadow Chancellor, speaking to the Local Government Association’s annual conference in Bournemouth, said:

We are meeting at a time of enormous uncertainty, following the result of the EU referendum just two weeks ago. There is the wider political uncertainty about Britain’s role in the world. And there is the economic uncertainty introduced by the shock of the Leave vote itself. Longstanding trading and financial relationships are at risk of being torn up. Perhaps the clearest message from the vote to Leave is that business as usual is no longer an option.  

The shock of the Leave vote has been worsened by the shaky foundations of our economy. Productivity growth has stalled since 2007, an unprecedented occurrence in modern peacetime history. Partly as a result of low productivity, wage growth remains low and any inflation arising from the falling value of the pound is liable to eat into real earnings. The current account deficit remains at near-record levels, whilst borrowing by government and households is also rising. The economy is, if anything, more unbalanced than it was before the crash of 2008. 

We argued that George Osborne’s fiscal rule, introduced last autumn, had no sound basis in economics. The Chancellor has failed to hit his debt target at this year’s Budget. The shock of the Leave vote, and the absence of a plan to deal with that shock, has now forced him to abandon his fiscal surplus target. This is absolutely the right course of action, as was abandoning the threatened “Brexit Budget” of swingeing cuts and tax rises. Further austerity would be absolutely the wrong course of action to take in an economy buffeted by a shock like Brexit. 

Let me make it clear - Local Government have been bearing much of the brunt of austerity. Councils cannot and should not be the target once again .Labour will continue to press for proper funding and resources for our local authorities. But we need to also recognise that our economic policy now must be about more than just accepting the status quo. We have to do more than try and patch up the damage. The Leave vote showed just how decades of underinvestment had left too many people here feeling abandoned by what they, quite understandably, view as a distant Westminster elite. We need a break with the old way of doing things. 

I believe that it is local councils that have started to show how a new path for the economy can be created. But it has to be matched up by action from central government. The challenges are substantial. 

Regional inequality

Britain today has the worst regional inequality in Europe. The gap between our richest regions and our poorest is wider even than that between North and South Italy, or between East and West Germany. In London we see the richest places in the whole of the EU, whilst nearly 80% of UK regions earn less than the EU average. These are the places that tended towards voting Leave.  

We should not allow a situation to persist where the majority of investment, from both public and private sectors, is concentrated in a few areas, and great swathes of the country are left behind. It was important to see the government begin to lay out its vision of the British economy after the Leave vote. George Osborne’s commitment, made in the Financial Times earlier this week, that he was seeking to boost the funding made available to regions in the North of England is to be welcomed. We have asked him to set out a timetable for delivering this, and some details of the projects to be brought forward. Local Government should be vitally important partners in designing and delivering this programme.  

We’re concerned that after the Leave vote, vital EU regional funding that comes to over £10bn a year will be simply lost. This has provided a lifeline of funding for some of the poorest regions in the country and is now at risk. So we’ll be pressing the Government to address this question urgently. The Government must guarantee this funding is protected.  


The Government’s austerity policies have reinforced the UK’s regional bias. It is local authorities that have borne the brunt of the cuts.  But it is then the local authorities in some of the poorest places that have been hardest hit. Overall, local authorities have seen their spending fall by 23% since 2010, allowing for inflation. These are huge cuts for local authorities to bear.  

Action by local authorities

But across the country, councils have responded with determination to their deteriorating circumstances forced on them by austerity. Oldham council has looked to develop its own responses to the crisis, working with Oldham Credit Union to reduce the burden of problem debt locally. Its Fair Employment Charter rewards local employers and looks to use local authority procurement to improve working conditions. Enfield council in London has developed innovative contracting models with major local employers to support good jobs. And Preston, inspired by the example of Cleveland, Ohio, has developed an extensive programme of work.  

Preston was one of the councils facing the very sharpest cuts to its funding out of any in the country. But they are responding creatively. They have got major local employers and buyers – so-called anchor institutions, like the University of Central Lancashire – to drive through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally.  

They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston. And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands.  

These are just a few of the ways in which imaginative local authorities are starting to show a new path for the economy.  We need to scale up and spread initiatives like these. And we have to make devolution a reality where it has not already been achieved. That doesn’t mean passing down responsibility for administering cuts to local and regional authorities, particularly in England. It means ending the concentration of power and wealth in just a few hands in our capital city, and giving the powers back to those local areas and places that have been excluded for too long.  

We need a government that trusts local authorities to find their own economic solutions for their own areas. Labour already has an agreement with our new Mayors to set up a Mayoral Economic Forum, helping to bring together best practices and ideas. Looking ahead, we need to bring other local authorities on board.  I think we can develop a consensus on the approach now to be taken, based on the foundation.  

Next steps

Most immediately, there is an urgent need for some clarity and certainty from government. The lack of planning for the Leave vote has already been damaging to our economy. Economic policy has been pulled together on an ad hoc basis. The centerpiece of the Government’s macroeconomic policy, the fiscal surplus target, has been ditched. And the Chancellor has now floated the prospect of exceptionally low Corporation Taxes as a solution to low and falling rates of business investment in the UK.  

This is not a view I share. Previous cuts to corporation tax have not resulted in increasing investment, as the Office for Budget Responsibility has found. And by whittling away at the tax base, cuts to corporation tax put more of the burden on households and small businesses, whilst increasing the pressure for cuts to local authority spending. So we are adamantly opposed to further cuts in the headline rate of corporation tax that threaten to turn this country into little more than a tax haven. 

We need, instead, some clear parameters for the ongoing discussions with the EU and other international partners about Britain’s future role in the world. Local Government must be represented in the negotiations and decision making as we remake our relationship with Europe. 

Another red line is preserving free trade. There is no economic case for reimposing tariff barriers with Europe and depriving British businesses of access to the world’s largest single market. And we cannot accept any restrictions on the rights of those who work here. That includes those from other EU countries who presently live and work in the UK. We will not be willing to support any EU deal that reduces the rights available to working people in this country.  

The way forward

The Brexit vote should act as a wake-up call for all of us. It will force major challenges on local and national leaders alike over the coming years. Labour wants to work in partnership with local authorities as we begin to put together a new political economy for the country. We will seek to ensure Local Government’s voice is heard and listened to in this challenging period ahead.

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Sir John Chilcot published his report of the Iraq Inquiry today Wednesday 6 July 2016.

The Iraq Inquiry has concluded that the decision to go to war was made on the basis of flawed intelligence and troops were sent in before peaceful options had been exhausted.

 This is the speech that I made in the Chamber in Iraq Debate on 18th March 2003 

John McDonnell (Hayes and Harlington): Today is the first occasion on which I have spoken in a debate about Iraq and I am grateful for the opportunity.

It is a time to draw on one's inner beliefs and vote according to principle. I want to put my views on record for my constituents and the community where I live and which I work hard to represent so that they know and understand what I do today. 

shall vote against the war and for peace. I shall walk through the Lobby with many members of the socialist Campaign group, but one will be missing. My hon. Friend the Member for Bolsover (Mr. Skinner) will not be with us tonight, and I send him our best wishes for a speedy recovery. 

Last week, in a desperate attempt to gain support for war, the Ministry of truth at No. 10 tried to portray the Campaign group's position as a challenge to the party leadership. Let us make it clear that today's vote has nothing to do with the leadership. It is a vote on principle: one is either for war or against it. 

The Prime Minister said that he wants people to vote not out of loyalty but on the basis of understanding and supporting the argument. I respect him for that. I would respect him even more if he gave us a free vote instead of a three-line Whip, and if the Whips were called off from trying to persuade people in their normal manner. 

I shall vote for peace tonight because the Bush war plan is immoral. It fails the test of the basic just war principles of not only last resort but right intention. I do not accept that Rumsfeld, Cheney, Perle and Bush have the right intention for the future of Iraq. 

I believe that war is illegal. We cannot simply erase the US ambassador's commitment to UN Security Council partners that resolution 1441 contained no hidden triggers and "no automaticity". Many will perceive war against Iraq as an act of international vigilantism by a superpower state that increasingly appears out of control. We will reap unforeseen and incalculable consequences for the world, our citizens and constituents for generations. People will suffer and die. No matter how few die, it will be too many for me.If we go to war, we must be clear that we have the support of our people.We will work through the UN. We will use weapons inspection and implement the proposal 

With great respect to the hon. Gentleman, I do not believe that the Basra road is a good example of supporting the Iraqi people. We inflicted carnage on them. Many were simply conscripts who did not wish to fight. 

If we go to war, we need the clear support of our people. In the past 12 months, we have been treated to a global propaganda exercise to persuade us of the need to attack Iraq. We have been subjected to a global stream of new-Labour-like publicity stunts, cynical in intent and increasingly ineffective. The lasting inheritance is the perpetrators' inability to tell the difference between truth and falsehood, even when lives are at stake. 

Most people have seen through the global propaganda exercise. The great persuaders have failed to persuade. People have seen through the dodgy dossiers and the forged nuclear weapons evidence. They have been offended by the use of the memories of those who died on 11 September to justify dusting off Rumsfeld's five-year-old plan to invade Iraq. They understand that the war has no link to the war against terrorism and will exacerbate the terrorist threat for years. They have grown wary of pleas for and justification of war on humanitarian grounds by those whose humanitarian credentials are compromised by their military, economic and political support for the tyrant Hussein and who, after 20 years, have suddenly discovered the plight of the Iraqi people. 

Even those who believed Bush and would have been held to the principles of the UN by the Prime Minister have been rapidly disillusioned. We now know that the Bush military regime had set a timetable for invasion of Iraq that was based not on the outcome of the UN weapons inspections but on the climatic conditions of the middle east.

A second UN resolution was not an act of faith in the UN and the rule of international law. It was simply another part of the propaganda exercise to bring states, and especially the British electorate, on side. When not enough states could be bought or bullied, the UN route was cast aside. 

We reached the height of cynicism last week when we were promised the Palestinian-Israeli road map. It comes from a President who was forced by world opinion to send Colin Powell to Israel when Sharon sent his tanks to demolish Jenin. To give Sharon the time to murder enough Palestinians, Powell took the longest route from Washington to Tel Aviv in the history of travel. Where was the road map then? Where was it this week when Israeli bulldozers drove backwards and forwards over the peace demonstrator, killing her outright?

When rational argument fails, we find a scapegoat. Who better than the traditional enemy, the French? The language that has been used in the debate against the French verges on xenophobia. Yet any criticism of the Bush regime is pounced on as anti-American.

It might be impossible to prevent the Bush regime from going to war, but we can still prevent Britain from being party to this international atrocity. Our vote tonight could withdraw any moral or political authority to take this country to war. Without the overwhelming support of the House, no Prime Minister can be confident that he has the backing of the British people for war, or the right to lead our people into this unknown risk. 

If the Prime Minister proceeds to take us to war in this coalition—not of the willing, but of the killing—I shall say clearly, "Not in my name. Not in the name of thousands of Labour party members up and down the country. Not in the name of the British people." To our communities, we say, "Continue the campaign for peace, to shorten this war and to prevent the next." To the British troops, we say, "Safe home." To the Iraqi people—the parents—we say, "Hide your children deep in the shelters, but we wish you safety. We will stand by you when the bombing stops." To the peoples of the world, we say very clearly, "We will not let this coalition destroy the United Nations as the arbiter of international order." We must form a new coalition to build institutions of global governance capable of safeguarding the world from the new superpower that is globally dictating its policy to the rest of the world.

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Novara Media Interview with John McDonnell



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John McDonnell MP, Labour’s Shadow Chancellor, responding to reports that George Osborne intends to cut corporation tax to 15 per cent, said:

"This is a futile and costly gesture from a lame-duck Chancellor who is clean out of ideas after being forced to abandon his failing flagship austerity programme. George Osborne is already set to slash corporation taxes to among the lowest rate in the G20.


"But despite falling corporate tax rates UK investment has shrunk in both of the last two quarters even with record profits and UK companies sitting on a £700bn cash pile.


"Instead of turning the whole country into a giant tax haven and playground for the ultra-rich, the Chancellor needs to get a grip on the real problems by reversing planned cuts to Government investment and bringing forward shovel-ready projects for those areas worst affected by the investment slump and the shock of Brexit."

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John McDonnell’s Speech at the Southbank Centre 1st July 2016

Brexit and what the economic implications mean for our country.

As today is the centenary of the battle of the Somme I would like to start by paying tribute to all those who lost their lives. Both my grandfathers served in the 1st World War. They as many survived but nobody ever lived through unscathed. We remember and honour the sacrifice made on all sides and are reminded of the importance of peaceful, constructive international relationships.

This has been quite a week in politics. Whatever our internal party activities, in both parties, we must recognise our responsibilities to fulfil our role to protect community interest.

Last Thursday’s vote to Leave the European Union has opened a period of intense political and economic uncertainty.

The UK’s triple-A credit rating has been lost.

Sterling markets have been in turmoil, as have stock markets here and abroad.

The FTSE100 index registered a bigger single-day fall than after the bankruptcy of Lehman Bros in 2008.

Some employers, most notably in financial services, are already looking to relocate jobs.

A quarter of those employers say they will introduce a hiring freeze.

Shares in UK banks have fallen most dramatically.

Looking ahead, most major forecasters have revised their expectations of future growth sharply downwards. A major loss of capacity, with the potential for permanent damage to the UK’s growth prospects, cannot be ruled out. The challenges ahead are immense.

I want today to look beyond the immediate economic situation, and towards a possible future for the UK and its relationship to the EU.

The people have spoken, and their decision must be respected.

We know that the population has voted to leave the European Union, we must respect that decision, but we now need to do more work to find out which elements of our European relationship our people want to preserve, and which must be changed.

This task is all the more important, given some of the frankly false information which was given out by the Leave campaigners in advance of the referendum, and the total absence of planning on their behalf for afterwards.

As I, Jeremy, and the Labour team argued during the referendum campaign, the EU has been on balance good for workers here, boosting employment and providing protections at work.

As guidelines for future negotiations or dialogue, protecting jobs and rights at work must be the starting point.

With those two aims, I believe, the following should act to outline an initial path through negotiations.

First, our aim must be to ensure freedom of trade for UK businesses in the EU, and freedom of trade for EU businesses in the UK.

Second, no EU citizen currently living or working in the UK will have their residency rights affected. No UK citizen currently living or working in the EU will have their rights affected.

Third, existing protections at work provided by the EU must be maintained.

Fourth, the UK’s role in the European Investment Bank should be maintained.

And fifth, the rights of UK financial services companies to win business across the EU must be maintained.

Any path through the negotiations that does not respect these guidelines will be liable to have severe consequences for jobs and protections at work.

Freedom of trade for UK businesses in the EU. Freedom of trade for EU businesses in the UK.

Labour does not believe that the people of Britain want to see tariffs erected around this country.

Over the years, thousands of British businesses have benefited from the freedom to do business throughout Europe, and British people have benefited from being able to buy tariff-free from European companies.

Whatever emerges from negotiations, when the final proposals for Brexit are decided, we do not want to lose the benefits that membership of the European Union has brought.

The damage that would be done to our economy by pulling out of the single market at this time could be substantial.

No EU citizen currently living or working in the UK will have their rights affected. No UK citizen currently living or working in the EU will have their rights affected.

Perhaps the most shocking and disappointing trend since last week’s vote has been the increase in racially motivated incidents.

Heartbreakingly, we have even heard reports of children asking their parents whether they will have to leave Britain because of the vote for Brexit.

Let me say to those children, and their parents, now:

Labour will always stand in solidarity with anybody who is abused because of their background.

And Labour will never vote for any kind of EU exit deal which reduces the rights to live and work of either British citizens abroad, or EU of citizens who are living here at the time of exit.

We are not that kind of people. And I don’t believe the British people, however they voted last week, are.

We have a proud history of welcoming migrants to this country.

I take heart at the number of people who have spoken out against the wave of racist attacks in the past week, and I know how many people have been shocked by them.

When the far right shouts on the streets of Britain that people who have lived, worked and raised families here for many years should be “sent back”, it is imperative that decent politicians stand with the victims and say: “we will never send you anywhere”.

It is also imperative that those politicians who knowingly helped to create the climate for such horrific incidents, in some cases seemingly to further their own careers, take responsibility for the consequences of their actions.

Guarantee of employment rights

The EU at present acts as an extra guarantee of rights for those in work.

These include maternal and paternal rights, and rights against forms of discrimination.

We will oppose any negotiations that include a reneging of those rights, and will fight any attempts to renege on existing rights in the UK.

This means that, before any withdrawal from the UK, the Government must guarantee that all the rights we have in UK thanks to our EU membership are to be preserved and not diminished on exit from the EU.

European Investment Bank

In addition to employment rights, the UK infrastructure projects often benefit from European Investment Bank funding.

The UK currently holds a 16% stake in the EIB, which last year disbursed a record £6bn in investment for the UK.

This includes £1bn for social housing.

Following the vote to Leave, there is already a threat to those projects that were seeking funding.

The EIB has a different governance structure to other EU institutions.

There is a lack of clarity about the UK’s status within it.

We should insist, given the benefits the UK enjoys and the stake we hold, that our position is maintained.

Bank passports and finance

Britain’s financial services industry employs over one million people, with another million employed in related professional services.

These aren’t just concentrated in London. Over half are outside London and the south-east.

Financial services as a whole account for nearly 10% of Britain’s GDP.

That is a similar size to our manufacturing industry.

London itself is the leading global centre for finance. It hosts the world’s largest foreign exchange market, turning over nearly $2 trillion a day. That status is directly threatened by Brexit.

There is enormous concern in the City, and amongst those major financial institutions with international interests. Those concerns centre on the potential loss of EU passporting rights.

This provides the rights for banks based in the UK to access EU financial markets. The loss of these rights, now threatened by Brexit, would be a huge blow. Financial institutions would be cut off at a stroke from those markets.

Already, there are contingency plans in place to relocate staff and, further down the line, headquarters. Research before the vote suggested that potentially 100,000 jobs in finance could be at risk. The threat is very real.

In addition, Lord Hill, the UK’s appointment as financial services Commissioner, has resigned.  Britain now no longer has any representative at the most senior level inside the EU to argue for the interests of British finance.

There is little prospect, without a clear negotiating line, of regaining that influence. Political uncertainty is feeding directly in to wider market volatility. The situation, particularly as it impacts on jobs, is untenable.

Let me be clear about this. I am a long-standing critic of the Britain’s financial institutions. From top to bottom, they have failed to live up to their obligations to society.

The focus of investment is too short-term and the rewards are, too often, excessive. As Lord Turner has said, much of the activities the City undertakes are “socially useless”.

Rewards for a very few at the top of our major financial institutions have been obscene and, quite rightly, attracted public opprobrium. Excessive rewards in financial services have contributed directly to widening inequality in this country.

The senior city figures who took part in yesterday’s Financial Times debate clearly recognised that this inequality contributed directly the vote to Leave.

Above it all, the catastrophic failure of 2008 has cast a long shadow. We are still living with its consequences now. Nonetheless, whilst the need for a fundamental reform of the City remains, we should not simply allow it to sink beneath the waves.

Our current economic model depends on financial services, including £66bn in taxes. With job losses and relocations threatened, it won’t just be a few fat cats who suffer. Over time, we know we have to change our national economic model.

The shock of the Leave vote should at least show us that we need to become a country that builds more on its strengths in science, technology, and the creative industries.

We need to show how all of our country can create and share in prosperity, rather than piling up the wealth in one corner for a few to enjoy.

We need to think how we can make finance the servant of the economy, rather than its master. But we won’t achieve this by ripping up existing, longstanding agreements in a way that threatens jobs. We’ll achieve it by working constructively with those in the financial services industry who want to reform.

The country now needs the whole system to gear itself towards delivering the long-term, patient investment this country needs. So we must ensure that any future deal with the European Union includes a banking passport and full access to European markets.

We will not be supporting any exit deal that cannot guarantee those rights.


Let me now looking ahead

To move forward, we have to be honest in our assessment of the current situation if we are to ensure the correct remedies are agreed upon for the future.

The Chancellor’s assessment of the broader economic picture.

His claim that the “roof was fixed” whilst the sun was shining belies the reality.

The Leave vote is having a greater impact because the roof has not been fixed.

We saw this in the Office for Budget Responsibility’s assessment of the UK’s fiscal position, published alongside the Budget this year. At the centre of the OBR’s pessimistic assessment was the stagnation in UK productivity. Between 2007 and 2014, on the latest available data, productivity in the UK has not grown. This is the worst erformance of any G7 economy.

It means that, today and on average, every hour worked in the UK is one-third less productive than the average hour’s work in the US, Germany, or France.

Sources of growth

Growth over the last few years has relied too much on two things.

First, the economy has produced large numbers of poorly-paid, insecure jobs.

Second, growth is becoming more and more dependent on a return to household borrowing.

We have not hit the levels of 2008 yet. However, the Office for Budget Responsibility forecasts expect an unprecedented five year period of continual household deficits.

Current account

At the same time, our deficit with the rest of the world, the current account deficit, widened in the last year to the highest level since records began in 1772.

Currently over 6% of GDP, the UK’s has the largest current account deficit of any major developed economy.

To finance this gap, borrowing from the rest of the world and sales of UK assets have reached record levels, alongside asset sales to the rest of the world.

We have been able to finance this current account deficit, despite weak productivity growth, because of what Governor Mark Carney has called the “kindness of strangers”.

Investors in the rest of the world have been willing to overlook the fundamentals of this economy in the belief that it is politically stable, has secure banks, and has a booming property market.

The Leave vote has meant that this kindness of strangers is now in short supply.

With political instability and uncertainty over the UK’s relationship with the rest of the world, the confidence of international investors in the UK’s position has been undermined.

We need an industrial strategy to develop and support key industries. The government must now bring forward a comprehensive strategy to support key industries and lay a path for future growth.


The simplest explanation for these decisive economic weaknesses is the poor state of investment in the UK. Ahead of the referendum, business investment was already in decline. It is undoubtedly now falling still further. The ongoing uncertainty alone is enough, as the press reports, to deter investment.

Investment means that businesses can have access to new machinery, technology and ideas that will help drive productivity increases. Without sufficient investment, productivity growth is difficult to achieve. But this fall in investment by businesses is being worsened by the governments’ plans to cut its own investment spending.

Government investment on current projections is set to fall by the end of the decade. Without sustained investment, we will not be able to address the economic decline that has blighted too much of our country.

Economic decline, regional inequality, and the deep-rooted alienation and despair it has produced contributed to so many voting Leave. Some are concerned that a shock to business investment spending would help push the entire economy into a recession.

Labour has called for a programme of government investment, bringing forward shovel-ready projects particularly in those areas hardest hit by long-term economic decline.


We will get through this period of uncertainty, as Britain has done many times in the past. There are real strengths in our economy, not least our talented and dedicated workforce.

Nonetheless, volatility continues and there remain grave uncertainties about the UK’s future relationship with our European partners and the wider world. The future direction of the government itself is not yet determined.

Labour is prepared, in the national interest, to work with whoever necessary to ensure that the best interests of British working people are secured.

Jeremy Corbyn has established since he became leader 9 months ago, excellent working relationships with the leaders of socialist and social democratic partners and progressive movements across Europe.

Over the coming period we will be seeking to meet them to enlist their aid in securing the best deal we can for Britain in a new relationship with Europe.

Politicians in all political parties have an immense responsibility on their shoulders. We need to concentrate fully now on the country’s and our peoples interests.

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John McDonnell MP, Labour’s Shadow Chancellor, responding to George Osborne’s statement, following the outcome of the EU referendum, said:

“The Chancellor’s statement this morning is to be welcomed in the interests of providing some certainty and stability to financial markets, and some reassurance to ordinary people in this country after days of uncertainty.

“It is reassuring to know that the Chancellor has been in urgent consultation during the weekend with those in the financial services industry, and our international partners. We also welcome the postponement of any contractionary emergency Budget until the fiscal position is made clear.

“Nonetheless, two key issues now need to be addressed by George Osborne. First, that the Treasury and financial authorities have in place interim measures needed to calm market volatility while protecting working people. We appreciate that many of these cannot be made public and so request a cross-party briefing on a Privy Council basis to secure cross-party support. Second, that he can offer interim government support, particularly to more deprived regions, in the event of a continued slide in investment, and those regions at risk of losing EU funding.

“We will get through this period of uncertainty, as Britain has done many times in the past. There are real strengths in our economy, not least our phenomenally talented and dedicated workforce. Nonetheless, volatility continues and there remain grave uncertainties about the UK’s future relationship with our European partners and the wider world. The future direction of the government itself is not yet determined. Labour is prepared, in the national interest, to work with our Parliamentary colleagues to ensure that the best interests of British working people are secured.”

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John's interview with Andrew Neil Sunday 26th June

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Now is the time for the opposition to hold together


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Labour cannot descend into infighting at this critical moment

John McDonnell Guardian Opinion 24th June 2016

The Brexit vote has delivered the most enormous shock across the political system. And as the resulting market turmoil demonstrates, it is creating an enormous economic shock too. The greatest danger we face is that this event, under this Conservative government, will be felt across the whole of society and fall most heavily on the most vulnerable.

It is impossible to understand this vote without recognising that huge numbers of people in our country have been let down, repeatedly, by successive Tory governments. While high finance has been allowed to run rampant, our historic industrial areas have been starved of investment. Secure, well-paid jobs have ebbed away, to be replaced by insecurity, zero-hours contracts and poverty wages. Many there feel, rightly, ignored and cast aside by the Westminster political system.

The campaign to leave made three claims to the disenfranchised. First, they claimed that pressure on public services and the lack of jobs was caused not by Tory governments imposing austerity and failing to invest, but by migration alone. We understand people’s concerns and will work to address the real insecurity that lies beneath them. But the leave camp’s second claim, that exiting the EU would be a simple solution here, was quite wrong.

And third, they were convinced by those on the leave side, including Boris Johnson, who said there would be no economic consequences from a decision to leave. Every reputable economist and economic institution warned the shock would be substantial. I don’t doubt that Boris Johnson and others knew this full well. The biggest danger here is that the shock will be felt most in those communities least able to withstand it. We should not let the leaders of leave shrug off their responsibilities here.

George Osborne has already threatened an emergency budget in the event of a vote to leave, doubling down on austerity and reversing his manifesto promises not to raise income taxes and VAT. There is no economic justification or mandate for this. Sixty-five of his own MPs have refused to support it, and Labour will oppose him every step of the way.

Labour and the whole labour movement will need to rally now in defence of working people and their families. That means immediately scrapping George Osborne’s fiscal surplus target for 2020. It has no support in the economics profession and Osborne’s desperate efforts to achieve it have resulted in the misery of spending cuts and the short-sighted slashing of vital investment. If a recession breaks, as forecasters now predict, maintaining spending will be essential to help avert an even deeper downturn than necessary. This will also mean abandoning the third pillar of the fiscal charter the government pushed through only last year: a comprehensive failure of economic policy within 12 months.

When an overwhelming consensus now exists on the necessity of public investment to support weakened economies – from the CBI to the TUC to international organisations such as the IMF and the OECD – it was clearly mistaken for the chancellor to pursue major cuts in investment, which is now scheduled to fall until the end of the decade.

Under current circumstances, with shockwaves still being felt, it is critical that the government is prepared to bring forward shovel-ready investment projects – not only to create jobs today, but to lay the secure foundations for the future economy. Investment spending should be targeted on those areas of the country that have most suffered from neglect and long-term decline under the Conservatives. We should no longer tolerate a situation in which some privileged areas of the country receive the lion’s share of public investment.

These are uncertain and dangerous times for all of us. Labour must be at the forefront of putting forward an alternative to the present economic mess, which makes unity more important now than ever. At a time of such economic uncertainty, with the Tory party split clean down the middle, Labour members and voters will not forgive us if we descend into infighting and introspection only a year after Jeremy Corbyn won his landslide victory as our leader.

The current Conservative administration has piled failure on failure. Its economic legacy will be the continuing devastation of communities across the country, the shoddy low-paid jobs it has created, and now the shock of Brexit. Together we can, and now must, do better than this.

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EU Referendum: John McDonnell MP, Labour’s Shadow Chancellor, said:

“People will be waking up this morning to turmoil in the markets and the pound crashing, and fearing the emergency budget the Chancellor threatened to hike their taxes and cut public services.

“The Government must now take steps to stabilise the economy, and to protect jobs, pensions and wages. Labour will not allow any instability to be paid for by the working people of this country”

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Labour Remain vote could secure £8bn of investment for the North of England by rejecting Tory Brexit

The Shadow Chancellor, John McDonnell MP, today called on voters in the North of England to back a Labour Remain vote and reject a Tory Brexit so that it can unlock to over £8 billion of potential further investment for the entire region through our continued membership of the European Union.


Speaking at Manchester Metropolitan University alongside former Labour Prime Minister Gordon Brown, John McDonnell MP, called on the Government to work to ensure that the UK receives its fair share of funding.

At present, Britain receives less than the per capita EU average in funding from the European Investment Bank (EIB) due to Tory cuts and changes to the regional infrastructure required to make successful funding bids in England, which have weakened its effectiveness compared to the devolved administrations.

Under the ‘Juncker Plan’, the EIB is set to increase infrastructure and investment spending across Europe by €320 billion. The UK’s current share of the EIB’s capital is 16 per cent, so if the UK was able to raise a fair share of the additional investment also to 16 per cent then this would work out to £35 billion for the UK by 2019/20.

For the North of England, the total extra funding boost would be £8.3bn. This would be enough to finance the proposed High Speed 3 and help make the Northern Powerhouse a reality.


John McDonnell MP, Labour’s Shadow Chancellor, said:


“There are opportunities for Britain inside the EU to improve the lives of working people across the North of our country.


“The Tories sell all of us short by not taking them up.


“And a Tory Brexit would close the door to the vital infrastructure investment our industrial heartlands desperately need.


“Britain has a 16 per cent share in the European Investment Bank, but receives only 11 per cent of funding.


“If we just took our fair share that would be an extra £35billion of investment.


“That’s the same as a whole year of public investment under George Osborne.


“It’s money that could transform the parts of our country hardest hit by Tory austerity.


“It could mean funding High Speed 3 and overhauling public transport here in the North.


“We could unlock that £79 billion potential of the North of England, helping create hundreds of thousands high-quality, well-paid jobs over the next decade.


“Under the Tories today, that £35 billion is extra money we’re leaving on the table.


“Under a Tory Brexit, we’d be walking away from the entire pot.


“With this additional funding, we could help deliver the investment-led recovery our country needs.


“But neither wing of the Tory Party will fight for it.


“They’re the party of corporate elite, and the CEOs who prefer to award themselves fat pay cheques instead of investing in British industry.


“By voting for a Labour Remain vote and rejecting Tory Brexit next week the North of England will be sending a clear message to the same Tory elites on both sides of the referendum campaign, who both have a track record of undermining the north.”

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Condolences to the family of Jo Cox MP for Batley and Spen

I sent my deepest sympathy and condolences to Jo Cox’s family. I am deeply saddened and shocked by Jo’s brutal murder on Thursday afternoon whilst she was in her constituency doing the job she was elected to do, serving her community. Jo was a brave compassionate MP who will be dearly missed. She was a wonderful, kind, caring person who was liked and respected in all parts of the House.

This attack was an assault on democracy itself, an attack on the right of everyone to have their say in how our country is run, and for those that the people elect to be able to listen to and represent them without fear or favour. We must not allow those who peddle hatred, terror and division to poison and degrade our national and political life.

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Philip Green should be stripped of his knighthood

John McDonnell  Guardian Opinion June 11

Last week, we saw the ugly face of British capitalism. The excellent work of the business select committee, and its Labour chair, Iain Wright, has helped throw a spotlight on some of the more disgraceful practices that are taking place here in the UK. We discovered that the management of BHS were threatening to kill one another and the head of Sports Direct spuriously claim that he doesn’t even know what his own organisation is up to.

Thanks to the work of investigative journalists, Sports Direct, a profitable company, was exposed treating its workforce with utter contempt. It had penalised low-paid employees for taking time off sick and founder, Mike Ashley, was forced to admit that his company was not even paying many of the staff the national minimum wage.

Mr Ashley is a man who has made millions while treating his workforce with disregard. He claimed he could not stop such behaviour quickly as Sports Direct was an “oil-tanker”, but it’s more like a ghost ship when it comes to accountability.

But clearly, this is what happens when trade unions are demonised by the media and suppressed by big business interests. In future, I would like to see any company that has been found to have broken the law and not paid staff the minimum wage, and is not recognising the trade union that represents their workforce, not only made to recognise that union, but made to accept, if the union wishes, worker representation on the board.

Furthermore, the chancellor, George Osborne, has to make sure there is no sweetheart deal for Sports Direct (like the one we saw for Google over unpaid taxes) if it is found in breach of national minimum wage laws.

This week, we may witness Philip Green (I refuse to use his title) justify his actions at BHS. The fact he feels he can threaten to subvert parliament is an insultto the British public. If he refuses to come before parliament, Green should be stripped of his knighthood. Parliament should have the right to strip honours from individuals, in my view. This would remove the secret committee network and help restore public faith in the honours system.

Green removed £1bn via a dividend payment from the Arcadia group in 2005. He squeezed out similar amounts from BHS while leaving the pension fund in deficit, before handing over the company to someone with very little record of business success. It was another act of vandalism that makes a mockery of those in business who are doing the right thing. And – even worse – employees of BHS will be paying for this with their pensions.

The vast majority of British firms pay their taxes and manage their staff with respect. However, there is a growing elite who think they are above the law and above British decency.

The new elite do not want to create wealth – they simply want to absorb it. The continued rise of this rent-seeking class is reminiscent of the robber barons of the 19th century. This new squalid elite assume that by their own genius they have amassed large sums of money, and that they have a right to do what they like, when they like, and that no one will stop them.

Maybe this is true under a Tory government, but under a Labour government with Jeremy Corbyn as prime minister this will no longer be the case.

It also underlines why we must remain in the European Union and reject Tory Brexit. If we don’t fight to keep and expand the working rights we have at an EU level, then a Tory Brexit government will only negotiate them away in trade deals that will resemble TTIP (the Transatlantic Trade and Investment Partnership) on steroids.

We have a chance now to build Another Europe in which we work with socialists across the EU to end austerity and take on those who attack workers’ rights and avoid taxes.

This is not anti-business. It’s anti-freeloader. If we allow these practices to continue they will undermine the foundations on which all genuine wealth creation is built. It will create an environment that benefits rent-seekers over wealth creators. It is time we brought an end to the new age of the robber barons. The health of our economy demands it.

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McDonnell joins calls to strip Sir Philip Green of knighthood if he snubs MPs

Shadow chancellor says retail billionaire should be punished if he refuses to be grilled by Commons committee next week

John McDonnell has joined calls for former BHS boss Sir Philip Green to be stripped of his knighthood if he refuses to be grilled by MPs next week.

The shadow chancellor has added his voice to the mounting antipathy in Westminster towards the retail billionaire, claiming that abolishing Green’s knighthood would be one way to “help restore public faith in the honours system”.

Green has been asked by MP Frank Field to appear before the work and pensions committee this Wednesday as part of its inquiry into the collapse of BHS, which has led to the loss of around 11,000 jobs. Rather than accept the committee’s request, Green’s response has been to demand Field resigns as chairman of the committee. He has previously stated that he was “not prepared to participate”.

McDonnell, writing in the Observer on Sunday, says that such a snub is an affront to the electorate as well as parliament and that the Arcadia chief, who has been repeatedly blamed for the collapse of the department store, should be suitably punished. “This week, we may witness Philip Green (I refuse to use his title) justify his actions at BHS,” he says. “The fact he feels he can threaten to subvert parliament is an insult to the British public. If he refuses to come before parliament, Green should be stripped of his knighthood.”

McDonnell adds: “Parliament should have the right to strip honours from individuals, in my view. This would remove the secret committee network and help restore public faith in the honours system.”

The shadow chancellor goes on to maul Green’s business decisions while at the helm of BHS over 15 years, referring to how he removed large sums from the company while leaving the pension fund in deficit before finally selling the company to Dominic Chappell, a three-time bankrupt. Last week Field’s committee heard Chappell described as a “mythomaniac” and a “Premier League liar”.

McDonnell states: “It was another act of vandalism that makes a mockery of those in business who are doing the right thing. And – even worse – employees of BHS will be paying for this with their pensions.”

However, Green appears unmoved by the fury, claiming Field is biased and orchestrated a “trial by media” designed to “destroy my reputation”.

The 64-year-old retailer has also alleged that the outcome of the inquiry was “pre-determined”. In turn, Field appears insistent on ensuring Green appears before his committee, stating: “The House of Commons decides who chairs these committees, not Sir Philip Green. It’s in his interest to turn up.”

The committee chair has considerable support from peers, with SNP MP Angus MacNeil tweeting:

Administrators announced last week that the business would be wound down and all 163 shops closed and sold off after it failed to find a buyer for the bankrupt department store. It brought to an end an 88-year trading history after intensive efforts to save the business came to nothing.

The Insolvency Service has launched an inquiry that could result in former BHS bosses facing boardroom bans.

The Pensions Regulator is also investigating the £571m pensions black hole left by BHS and will publish its findings. Field has also indicated he wants Green to put £600m into the retailer’s beleaguered pension scheme.

A group of Conservative MPs are reportedly already planning to write to the honours forfeiture committee, which must then formally evaluate the tycoon’s knighthood before advising the Queen on what action to take.

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John McDonnell MP, speaking after Treasury Questions today.

Tory Treasury Ministers refused on two separate occasions to commit Tory MEPs to support EU proposals on tax avoidance, said:


"Today the mask slipped as the Chancellor and his Ministers refused on two occasions to instruct their MEPs at the European Parliament to vote for anti-tax avoidance measures.


"The Tories need to put the record straight and say yes or no to whether they will support EU measures to clamp down on tax avoidance.


"Otherwise it clearly shows that the Tories say one thing when they think people are watching on tax avoidance but do another thing when they think no one's looking.


"And it further shows that a Tory Brexit would only mean that the Tories would openly work against the EU in clamping down on tax avoidance."

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John McDonnell: it’s time for the left to save the Europe debate from the Tories

Shadow chancellor John McDonnell puts forward the left wing case for voting to stay in Europe and transform it, speaking to the Another Europe is Possible conference. Thanks to Ed Dingwall for transcription.

mcdonnell-aeip.jpgNothing could be starker than the contrast between the debate on the referendum with regards to the progressives on the left and the debate on the right. I think the debate on the right is disfiguring political discourse, in this country. To be frank, it's turning people off.

The Tories seem to be transposing the gang warfare of the Eton playground and the battles over the Tory leadership succession on to our national political scene. It's rancorous, personal and bitter and has degenerated into name-calling and the hyperbole of Project Fear, with ludicrously exaggerated claims and counter-claims from both sides of the Conservative Party. Johnson's comparison of the EU with the Third Reich, and Cameron's claims of impending World War Three – they just beggar belief. The economic argument has degenerated into, on one hand, a description of economic paradise post-Brexit and outside the single market; and, on the other hand, a near Pompeii-like condition of the City of London and the economy if we leave the EU.

We just cannot go on like this. We cannot let the Conservatives and the rest of the right drag this debate into the intellectual gutter. Our country and our people deserve better than this. We must not allow the decision over the future role of Britain in Europe to become embroiled any further in the in-fighting over who is to be the next leader of the Tory Party; or the exploitation of people's insecurities by the far right.

Time to step in

So it's time now for those on the left and on the progressive spectrum to step in, and it's our job to retrieve this debate and save it from the right. The nature of the debate on the left should be in dramatic contrast to that on the right, and I think it already is. It has to be collegiate and, in Labour Party terms, comradely – a discussion among friends and allies who seek the same goal but offer a different route and a mechanism to achieve that goal. So let's appreciate that there are those on the left who have a principled, rational and coherent argument why we should vote to leave. But we just believe they're wrong.

Let's look at where we agree. First, on the left and on the progressive spectrum we all accept that many of the immensely critical issues we face are transnational and they require transnational political solutions. Second, our consciences don't end at the Channel, or at the North Sea.

I want to look at some of the examples of some of the transnational challenges we face. On energy, and creating the energy to light and warm our homes and power our industries: to be frank, I don't want to poison the air breathed by families in Paris, Madrid or Athens; or put their very existence, or their descendants’ existence, at risk of cataclysmic consequences of climate change. We know the EU is, and could be, an even more critical part of that much needed transnational architecture to respond to climate change. That's one of the reasons why we want to remain in.

On resources, to rise to the challenge of poverty and inequality both in Britain and across Europe, we need to harvest the resources of this rich continent effectively and fairly and wisely. How, in all conscience, can we turn a blind eye any more to the City of London effectively operating like a funnel to offshore tax havens for the taxes of transnational corporations and the super-rich. The taxes that should be paid to fund healthcare for the sick, the care for the elderly, the education of our young and tackling poverty – public funding that's desperately needed, not just in this country but right the way across Europe. We know that if we clamp down here, the tax evaders and avoiders will move elsewhere. That's why European agreements are necessary, and which form the basis of global agreements to track down and confront tax evasion and avoidance. That's why we need to stay in.

Humanitarian challenges

We shouldn't be able to sleep at night when we see refugee children's bodies washed upon the beaches of the Mediterranean. Memories are often sadly short. Europe learned the harsh truth, after the second world war, of the consequences of the barbarity of war and conflict. It faced then a refugee crisis on a scale never witnessed before. But by coordinated transnational cooperation across Europe, refugees in their millions were supported and resettled. It took time and concerted action across the whole of Europe. Vital lessons were learned about how to prevent, resolve and respond to conflicts. Setting up the Europe-wide institutions to bring people together was one of those lessons. If the European Union was eventually established for anything, to be frank, it was to ensure that we could come together effectively to rise to those humanitarian challenges on our shores. We should do nothing that puts at risk the institutions that enable us to take this coordinated response, to be organised to tackle the refugee crisis. That's another reason for staying in.

And it's important that on the left we don't avoid the issue of free movement and immigration, which is inevitably coming to the fore in this debate. None of us underestimate people's anxieties and emotions on this issue. We know that if we ignore it, we do so at our peril. So it has to be confronted head on.

The British have been and, almost certainly, will continue to be one of the greatest beneficiaries of the free movement of people across Europe. Whether it's the Brits retiring to the warmth of the sun, or the quiet countryside of rural France, or the beaches of Greece, or our young people increasingly opting to study and work across Europe, or British workers taking work elsewhere when our own economy is slowed, it's the British who are reaping the rewards of travel and settlement that free movement brings us. Inward migration often keeps our own economy afloat, filling the skills gaps and supporting an ageing population to pay its way. I speak as the grandson of an Irish immigrant and, I have to tell you, it's been the case for almost a century and a half that migrants have supported this economy and kept it afloat. I'm proud that it was often Irish men who built most of the infrastructure on which you travelled to get here today, many of the buildings we work in and hold these meetings in; and it was Irish women nurses who populated the NHS, cared for the elderly, taught in our schools, and worked in the factories that rebuilt the economy after the second world war and beyond. I'm proud of being the grandson of a migrant worker.

But we have to be straight with people as well. Of course migration, on any scale, presents its problems of integration and pressure on public services. But all of these problems can be readily overcome. The vast bulk of the evidence demonstrates that migrants pay more into the economy than they take out. And, despite general concerns about migration, all the evidence shows that on a one-to-one basis and within communities, the nature of British people is to be extremely welcoming to incomers. People generally just want to get on with each other and live in peace and harmony.

Austerity is to blame

We mustn't let the Tories use immigration as a smokescreen for the cuts in public expenditure that they've introduced as austerity. Our public services – the NHS in particular – and our housebuilding and infrastructure programmes would be in real difficulties but for the staff coming from across Europe. Where there are pressures in a particular area, the simple and obvious solution is specific programmes of government support to deal with them. It's not rocket science.

We have a duty also to address the issue of migration in a way that's positive in its view that a community can respond to receive the benefits of migration at the same time as overcoming some of the short-term issues.

The question for the left then, is whether we can transform the operation of the European Union. It's the same question asked by the left about any state institutions – whether it's the local council, the national government, or any transnational institutions. The strategy we pursued on the left, in the past and now, has been described traditionally as 'in and against the state'.

The state isn't just a set of institutions, it's a relationship. Usually one of dominance of the institution over the individual. Socialists and progressives have gone within these institutions to try to transform that relationship. That is, to transform it into a democratic relationship, where it is the democratic people's wishes that dominate, not the bureaucracy or the powerful economic interests that the bureaucracy often represents.

So, finally, that's the challenging question posed to the modern left. Can we, and how can we, democratically transform our European institutions? The optimism is based upon this: for the first time in over a generation there are movements and political forces mobilised and mobilising across Europe to respond to that challenge, but responding to it increasingly together. We have the opportunity now, from today, to re-route the referendum debate away from Tory Brexit; and into a debate about the democratic future of Europe, about 'another Europe': a Europe that is not just possible, but urgently and vitally needed.

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Labour meet with Tata to discuss way forward for UK steel industry

Labour today met with senior representatives of Tata Steel to discuss the future of the UK steel industry.


Shadow Chancellor John McDonnell MP and Shadow Secretary of State for Business, Innovation and Skills Angela Eagle MP met with Koushik Chatterjee, Group Executive Director of Tata Steel and Bimlendra Jha, Chief Executive Officer of Tata Steel UK in Westminster this morning, along with representatives of the steel unions Community, GMB and Unite.


Tata Steel announced their plans to sell their entire UK business in March. Since then Labour has been working to secure the future of UK steel making.


The constructive discussions focused on the sale process and the future of the industry. John McDonnell and Angela Eagle stressed the importance of ensuring sufficient time for a suitable buyer to be found. They also discussed the changes needed to ensure the sustainable future of the UK steel industry, including action on energy, business rates, and the British Steel Pension Scheme.


All parties agreed the need to find a resolution to the pension issue which both protected workers and pensioners, and supported the sale process and the future sustainability of the business.


Steel is a foundation industry. It is vital for UK manufacturing and it supports 40,000 jobs across the country. Labour will continue to push the Government to do what is necessary to save our steel industry. 


John McDonnell MP, Shadow Chancellor said:


"We had a positive meeting today with the management of TATA Steel and we are both agreed on working together to protect the jobs and pensions of UK steelworkers. 

"The steel sector is a vital part of the UK economy and Labour will keep the pressure on this Tory Government while providing them with a legitimate alternative like Labour's Four Point Plan to Save Our Steel Industry."

Angela Eagle MP, Shadow First Secretary of State and Shadow Secretary of State for Business, Innovation and Skills said:


“We are determined to work in partnership with Tata Steel and the steel unions to secure the future of this vital foundation industry. We also welcome Tata Steel’s commitments to being a responsible seller.


“Steel can have a bright future if we take the right decisions now. We’ll keep the pressure up on the Tory Government to do what is necessary to save our steel.”

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John McDonnell’s response to the Queen’s Speech 2016

I wish to move the amendment in the name of the leader of the opposition and several colleagues.

Mr Speaker last week was the first time I have visited the Other Place to listen to Her Majesty read to us the Queen’s Speech.Usually I avoid the crush and stay here to have a chat with the Honourable Member for Bolsover.I have to say that Her Majesty has to be admired for the way in which she delivered this fictional drivel of a Queen’s Speech whilst keeping a straight face.The Queen’s speech before us demonstrates conclusively the massive distance between the Chancellor and the real world.

The Queen’s Speech opened with an extraordinary piece of doublespeak.The government apparently thinks we live in a “strengthening economy”.They seemingly are not paying attention to their own statistics, and their own forecasts.After precipitating the slowest recovery in modern British history, the Chancellor is now presiding over a recovery built on sand.

Business investment has slumped again – by 0.5% in the first quarter, according to this morning’s figures.And the OBR’s most recent forecasts saw downward revisions across the life of this Parliament.Consumer debt is rising at record rates, and is forecast to remain at unprecedented levels.The current account deficit has reached record highs.We are borrowing more than ever before from the rest of the world as a result. We are not, as the Queen’s Speech claimed “living within our means”.

And productivity has slumped under this government. The gap between what the average hour worked in Britain produces, and what the average hour worked in the US, France or Germany produces, is bigger than it has been for a generation. Every hour worked in Germany produces one third more, on average, than it does here. Low productivity is the sign of a weakened, damaged economy. It means lower wages and more insecurity.

The slump in productivity, which has been far worse here under this Chancellor than in any comparable G7 economy, is what caused the Office for Budget Responsibility to revise its future forecasts downwards.

Growth has been revised downwards for every year for the rest of this decade. And when the OBR revised its forecasts downwards, the Chancellor’s entire Budget plan was shot to pieces. He’s been left with a £4.8bn black hole of committed spending with no committed funding.

It is nonsensical to claim, as the Government’s Queen’s Speech did, that the public finances are being placed on a “secure footing” when there are gaping holes in the Budget and the Institute of Fiscal Studies thinks there is only a 50:50 chance of meeting the government’s own fiscal surplus target. This is betting the nation’s finances on the equivalent of tossing a coin. There is nothing responsible. There is nothing “secure” in setting unrealistic and politically-motivated targets for public spending cuts.

And it is useless to preach about the need for a “stronger economy” when, by his actions in office for six years, the Chancellor has methodically undermined the economy.  This was his choice. Austerity was a political choice, not an economic necessity. We all now live, and are still living with its consequences. Because it was the wrong choice to make, the Chancellor has failed, and it is the British people who are bearing the cost.

He has piled failure upon failure, but at the centre of it all is the failure to sustain productivity. Productivity is the key to growth in any modern economy. And the surest way to achieve increased productivity is through increased investment. Increased investment means installing new equipment and replacing old infrastructure. Yet business investment remains weak. When business investment is weak, government should step in to make sure vital, world-class infrastructure is there, from high-speed rail to high-speed broadband.

A consensus from the IMF to the OECD, from the CBI to the TUC, is now urging governments across the world to invest in the future. But this government, clinging to its fiscal surplus target, is set to actually cut real-terms government investment over the course of this Parliament. You couldn’t imagine a more perverse and inadequate economic policy.

And behind the failure to invest lies the failure of our economic institutions. Too many of them have been captured by special interests, or place short-term gain ahead of long-term growth. We have major corporations sitting on a cash pile of up to £700bn, paying out salaries to senior executives whilst failing to invest. It’s no wonder that we have seen a series of shareholders revolts at the remuneration packages of some of chief executives.

We have a Department for Business that doesn’t believe in supporting business. And have a department for tax collection that doesn’t believe in collecting taxes – not, at least, from major multinationals. And who can blame them? When they strike a deal with Google which reflects an effective tax rate in the single digits the Chancellor calls it a “major success.” that is why I have written to the Chancellor to make sure that he urgently contacts the French authorities so that they share any information they find from their investigation into Google’s Paris headquarters with us so that we can get a better understanding of Google’s operations in the UK.

After six years, the Chancellor has no-one to blame for his failures but himself.

The Queen’s Speech furnished us with plenty more unreal promises.

The government says it will “support aspiration and promote homeownership”. Tell that to the hundreds of thousands of our young people who now have no serious chance of ever owning a home of their own. Homeownership has fallen to its lowest level in decades under this Chancellor’s watch. Rough sleeping has risen in London by 30% in the last year. The biggest rise since the current reporting were introduced. Nearly 70,000 families were living in temporary accommodation, including Bed and Breakfasts, last year. 9 in 10 under 35’s on modest incomes could be frozen out of home ownership by 2025 according to independent analysis.

Acording to the Queens Speech the government will “spread economic prosperity”. Tell that to the steelworkers, their families and communities, threatened with the destruction of their industry. Especially tell that to the steel workers I visited in Redcar where the government failed even to mothball the plant to save their local futures. Tell that to the BHS workers facing redundancy as their boss, Sir Philip Green, an advisor to government, stripped their business clean.

The government will “continue to support the Northern Powerhouse”. That’s why they’re  closing its Sheffield office, and threatening another six offices across the North with closure. That’s why of the top 15 infrastructure projects with most public funding only 1 is in the north.

The government intends to not to tackle “poverty and deprivation” but to redefine it. The chancellor’s shameful response to the one million people using our food banks every year is to introduce “new indicators for measuring life chances”. The Chancellor’s failed austerity programme has a human cost: 500,000 more children have been forced into poverty, Nearly 13 million people are now living in poverty, And over half of those living in poverty are in work. This Queens Speech offers no solutions to those who have barely enough to feed their families or who can’t pay to heat their houses. Instead this government will make sure they are counting their misery properly.

The reality is that after six years of desperate efforts to impose cuts on this economy, against the best available advice from the economics profession itself, the Chancellor is staring an entirely predictable failure in the face. He started out with such high flown promises.

There was going to be a “march of the makers”. Yet today manufacturing is still smaller than it was in 2008. There was going to be a “rebalancing” of the economy. Yet today we see that for every three jobs created in London, just one is created in the North. There was going to be a modernised tax service. But as the National Audit Office found in a damning report earlier this week, the quality of service at HMRC has “collapsed” in the last year as a result of staffing cuts.

The Chancellor has promised increased investment, but cut government investment spending – and now plans to cut it into the future. He forecast, in 2010, the fastest recovery in living memory. He has delivered the slowest recovery in modern British history.

He and his government have, perhaps understandably, clung to the job creation figures. Every month they are greeted with rare enthusiasm by this government’s ministers. The reality is that over half of those in poverty, nearly 7m people, are also in families where someone works. We have seen jobs created since 2010, but too many have been poorly-paid and insecure. 800,000 people now on zero hours contracts. Insecurity at work made worse by the undermining of employment rights by this government. There was no need for this.

It is the direct result of a failure to invest. Too many businesses have substituted cheap labour for expensive investment. They can’t be blamed: the government has set the lead, cutting its own investment spending. But low investment and weak productivity have real world consequences. It means wasted talents and opportunities lost. On one side, some are stretched to breaking point to make ends meet.  Others are left to languish, desperately searching for extra hours.

On wages that even the government’s own forecasters don’t expect to recover before 2020. Millions of people now self-employed, but their average earnings have fallen by 22% since the Rt Hon Member for Tatton became Chancellor.

The Queen’s Speech tells us that the government plans to create an economy “where work is rewarded”. Nothing could be further from the truth. Those who work hardest are punished with cuts to tax credits. But tax-dodgers and the super-rich are rewarded with tax cuts.

This government has failed and will continue to fail on every measure it set itself. It has failed in its target to reduce the debt. It has failed in its welfare cap target. It is failing to achieve its target on closing the deficit.

This is a government that has lost its way. Gone is the pretence of being the new “workers party”, trumpeted so loudly last summer. That disappeared when they started cutting in work benefits. The government wanders around, from crisis to crisis, looking for another U-turn to make. The cuts to Personal Independence Payments were scrapped. Forced academisation is being scrapped. The tampon tax and cuts to renewables subsidies both abandoned.

There is only one policy directive that seems to hold this sorry excuse for a government administration together. This is the policy, in defiance of all sound economic advice, to impose spending cuts of a viciousness not seen in this country for generations.

There is a consensus across this House that a strong economy is the foundation on which all else can be built. This government has not created a strong economy. Strong on rhetoric, perhaps. Strong on creative accounting, as the last Budget revealed. But the Chancellor’s economy is a jerry-built structure, resting on a recovery built on sand. The Rt Hon Member for Tatton has had plenty of opportunities to, as he so memorably put it in happier times, “fix the roof when the sun was shining”. But he has simply failed.

It would have meant taking quite a different approach. We all hope that once the referendum is out of the way, the economy will pick up. But without change the trajectory is clear. We are trapped in a low-wage, low-skill, low-investment, low-productivity economy.

We need a government that adopts a sensible and credible fiscal rule enabling long term patient investment in our economy. We need a government that uses record low interest rates to invest in the future. At a minimum, the government should now invest in the infrastructure, skills and technology that can help transform how this economy operates.

We need a government that actually clamps down on tax avoidance. It could go further, and overhaul a tax system that is manifestly failing to levy fair rates on those who can pay the most.

We need a government with an industrial policy. A government that backs the steel industry, works with our European partners to clamp down on the flooding of markets with cheap subsidised Chinese steel.

And it could seek to transform the institutions that govern our economy, from the Treasury to the great corporations, unlocking the potential that is otherwise wasted when vested interests dominate decision-making.

The Queen’s Speech was an opportunity for the Government to accept austerity has failed and to change course. It was not taken.  If this government cannot write a speech for Her Majesty that can undo the damage it has inflicted, and set out a confident course for this country’s economy, it is clearly time for Labour to lead the way.

Labour rejects the failed and cruel austerity programme adopted by this government. Instead, working in partnership with businesses, entrepreneurs and workers Labour would create an entrepreneurial state to support innovation, create wealth and drive growth. And we would share the proceeds of that growth fairly.

By investing in our economy Labour would lay the foundations of a new society that is radically fairer, more equal, and more democratic. An alternative based upon a prosperous economy which is economically sound, environmentally sustainable and where that prosperity is shared by all.

I beg to move

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State of the Economy Conference at the Imperial College London

economy_conf.jpgI made the opening speech to the 800 delegates at our first Economic Conference setting out our radical reforms to surpass even the Atlee government. The party will revive plans for rent controls and urge councils to follow the lead of areas like Manchester to offer cheap, local authority-backed mortgages, Labour would make it a mission to ensure families and young people on ordinary incomes aren't locked out of home-ownership as they are under the Tories. I also announced plans for a mayors' economic forum to allow the elected local leaders to share ideas along with a new economic and innovation forum to bring together businesses, unions and government.


workshop.jpgThis was followed by a keynote speech from Ha-Joon Chang talking about a balanced and sustainable economy. There were 5 workshops in the morning – What would a fair tax system look like, Europe, Britain and the economic challenges ahead, Economics within a carbon budget, Alternative models of ownership and a finance sector fit for purpose. The afternoon session’s workshops included Rewriting the rules to tackle inequality, Fiscal and monetary policy: can the UK do better?, How much debt is too much?, Gendering economic policymaking, and Technology and the future world of work.  A fantastic question and answer session took place in each workshop following exceptional presentations from all speakers. I was fortunate enough to be able to spend some time in each of the workshops and I was astounded by the level of enthusiasm and participation from all delegates. The workshops were followed by a plenary panel consisting of Sue Himmelweit, Linda Yeuh, Paul Mason, Adam Marshall and Len McCluskey with closing remarks by Jeremy Corbyn.

Ieconomy_lunch.jpgt was a day of serious economic debate featuring world famous experts, NGOs, trade unions and people impacted by policy We have the opportunity to build a fairer, equal, prosperous economy. We must be bold and ambitious.

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John McDonnell MP, Labour’s Shadow Chancellor responding to the Treasury analysis out today on the risks of Brexit, said:

"The report out today from the Treasury further underlies the weakness of the UK's economy thanks to six years of George Osborne's failed policies leaving us with a recovery built on sand, as well as the fragile state of the global economy and the serious risks a Tory Brexit poses. 

"This is yet more evidence that a Tory Brexit would only make matters worse for working people already struggling under a Tory Government.

"I welcome the admission by David Cameron and George Osborne that the last recession was not caused by the then Labour Government and that a recession post Brexit would be a Tory recession.

"However, the Treasury report worryingly suggests that the Chancellor would respond to a possible recession as a result of Tory Brexit by doing nothing. Something UK households simply cannot afford.

"Our economy needs a government committed to delivering investment to build the secure foundations of the high-tech, high-wage economy of the future. Labour wants to remain and reform the EU so we can work in unison with our neighbours to grow our economy and create jobs. "

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The Shadow Chancellor, John McDonnell MP, is hosting a ‘State of the Economy’ conference at Imperial College in London on Saturday.

The one day conference will hear from a number of world-leading experts to discuss the current state of the UK economy including: Ha-Joon Chang, Paul Mason, Linda Yueh, Jonathan Portes, Adam Marshall (Acting Director General of the British Chambers of Commerce), Len McCluskey (Unite General Secretary) and Helen Walbey from the Federation of Small Businesses.

Labour Leader Jeremy Corbyn will address the conference in the afternoon and there will be a keynote speech by John McDonnell in the morning.

Angela Eagle MP, Shadow Business Secretary, and Labour’s entire Shadow Treasury team will be attending and chairing sessions throughout the day and the ideas that are discussed will help to inform Labour’s economic policy making.


Filming opportunities: Speech by John McDonnell 11.00 – 11.20, Speech by Jeremy Corbyn 16.10 – 16.30

When: 1030 for a 1100 start for John McDonnell’s speech. 1545 for a 1610 start for Jeremy Corbyn’s speech. Saturday 21 May 2016.

Where: Great Hall, Sherfield Building, Imperial College, London, SW7 2AZ


You must accredit by 1700 Hrs, Friday 20 May 2016 to attend this event.


To accredit please email with your name, role, organisation, mobile number and email address.


John McDonnell MP, Labour’s Shadow Chancellor, said:

“I am bringing together a range of economic experts at this one day conference to help stimulate the debate about how we can create a future economy where prosperity is shared by all.”

“The conference will analyse the current state of the UK economy and we will also be hosting workshop sessions chaired by Labour’s Shadow Treasury team to ensure the conference is truly participatory as we want to hear everyone’s ideas.”

Jeremy Corbyn MP, Labour Party Leader, said:


“By broadening and opening up the debate about the future of our economy we can lay the ground for Labour to return to power in 2020 and make the changes we need.”


“The New Economics events John McDonnell has been hosting all round the country have been fantastic and I’m very pleased to be speaking at Labour’s state of the economy conference.”

Dr Ha-Joon Chang, said:

"I'm looking forward to speaking at Labour’s economic conference as I think it's great that in the spirit of Labour’s new politics the Shadow Chancellor is opening up the debate on the future of the economy to people from all round the country.


“Perhaps if the Conservatives listened to a broader range of viewpoints the economy wouldn't be in such a mess.”


“No sensible economist agrees with the way the Conservatives are handling the economy at the moment, so I hope this conference will play a major part in developing Labour's alternative plans for a more dynamic, fairer, and more sustainable economy".

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Labour can rescue EU debate from Tory negativity, says John McDonnell

John McDonnell, the shadow chancellor, will say that Labour can “rescue” the European Union referendum debate from Conservative infighting by making a positive case for Britain to remain in the EU.

Speaking a day after his predecessor Ed Balls appeared alongside George Osborne in a hangar at Stansted airport to promote the message that Britain is stronger in Europe, McDonnell will say Labour has its own, distinctive argument about “hope and solidarity” to bring to the debate.

“I want to rescue the debate from the negativity and ‘Project Fear’ coming from all sides of the Tory party,” he will tell an audience at the TUC in London.

“The referendum resulted from the splits in the Conservative party and their fear of Ukip, and as a result the debate has degenerated and brought out the worst in Westminster politics.”

Senior Conservatives have repeatedly clashed over the referendum in recent days, with Boris Johnson accusing the prime minister of “totally demented” scare-mongering, and the Treasury of talking down the British economy, while the chancellor accused the leave camp of stoking conspiracy theories about an establishment stitch-up.

Speculation is rife that the David Cameron could face a leadership challenge once the referendum is out of the way, even if the public vote to remain in the EU. Eurosceptic backbenchers have become increasingly irritated at the tightly controlled campaign to convince voters of the risks of leaving, which many see as a cynical “Project Fear” approach.

McDonnell, like his leader and close ally Jeremy Corbyn, has previously been lukewarm about the EU, but he is now promising to throw himself into campaigning to stay in.

“It’s time to turn this debate around, drive out the politics of despair and offer a vision for Britain and Europe, one where we protect workers’ rights, tackle tax avoidance, get to grips with climate change and protect our industries like steel. This is a vision of Europe based on hope and solidarity,” he will say.

Corbyn has made a conscious decision not to share a platform with Cameron in the run-up to the referendum, eschewing the cross-party approach of the Better Together campaign against Scottish independence which saw Labour set aside party differences with the Conservatives to help win the campaign, only to be severely punished at the polls.

Aides to McDonnell said Balls – an unpopular figure among Corbyn’s team for what they deride as the “austerity-lite” policies of Labour’s general election manifesto last year – had asked the shadow chancellor’s permission before agreeing to Osborne’s invitation to join him on Monday.

Labour has its own referendum bus touring the country, with Alan Johnson, the leader of the Labour In campaign, appearing at scores of events to try to persuade Labour voters to go to the polling stations on 23 June.

With many Conservative voters passionately opposed to EU membership, and the polls looking close, the leaders of the Stronger In campaign are very keen to encourage Labour supporters to come out and vote.

Tim Farron, the Lib Dem leader, will deliver a tough message to older voters today, urging them to think of their children and grandchildren when casting their vote in June. “Have you the right to limit, bind and impoverish their futures? To narrow their horizons, curtail their freedoms, hamper their ambitions and isolate the country that they will inherit?” he will say at a Liberal Youth Europe rally.

“Today we sit around the table with people that 70 years ago we were at war with. We sit around the table with people that, 25 years ago, had nuclear weapons on their soil pointed at us. Europe is the world’s most successful peace process.”

Guradian, 17th May 2016, Heather Stewart

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John McDonnell: these elections are a first step to winning in 2020

inews.jpgThese elections have confounded the doomsayers. The Tories and their friends in the media arrogantly thought they had destroyed the Labour Party last May. However, we have proved them wrong.

As against many predictions to the contrary, we have held councils in key election battlegrounds like Southampton, Norwich, Harlow, Derby, West Lancashire, Nuneaton and Cannock Chase. And we have gained seats from the Tories in places like Birmingham and Daventry, and from others in Sunderland, Cambridge, and Newcastle.

We have also won both by-elections with large majorities and increased our shares of the vote. In Sheffield Brightside, Gill Furniss won with a majority of almost 10,000 with a 5.8 per cent increase in the share of the vote. In Ogmore, Chris Elmore won a majority of 8,575.

In addition, we have retained power in Wales and seen off the Tories in all their targets seats, plus a win in Llanelli is another excellent result as it was Plaid Cymru’s top target seat.

Of course things didn’t go the way we wanted everywhere. In Scotland we’re obviously disappointed with the result, although just a year after Labour lost all but one of our MPs, no-one thought that this was an election where the test for Labour was whether we increased our number of MSPs.

Yet there was still some good news to build on as we won seats in East Lothian, Edinburgh Southern and Dunbarton.

But we must not forget that the Tories said we should judge Jeremy Corbyn in these elections on how well we do in London. And by that measure we have done incredibly well.

The Tories mistakenly believed that Jeremy would hurt Sadiq’s chances so they put them both together on all their leaflets, which backfired tremendously as it helped promote two of our strongest assets in London.

They also completely underestimated the success of Jeremy’s campaign last summer that has helped us to mobilise our activist base in London, helping us as a party to get out our vote on polling day.

On top of all this the Tories further got their tactics terribly wrong in London with a racist and divisive style of campaigning that we should never see repeated again by a major political party.

Nevertheless, now for only the second time ever we have a Labour London Mayor of London.

But we are not getting too carried away as we accept that the path back to power for Labour will be a long one. And we must all come together as a party and a movement to unite with those who equally want to evict the Tories from Downing Street.

That is why these elections are just the start of us laying down the foundations to win the elections that really matter in 2020. Friday May 6th 2016

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John's response to Anti-Semitism Row-Sky News







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Punjabi 'A' level Retained

a_level_panjabi.png                      A Level Action Group ( ALAG )

354 Chester Road North Sutton Coldfield B73 6RP  {West Midlands}






Rt John McDonnell MP

House of Commons




Date : 22.04.2016

REF: Confirmation of Plans for A Level Panjabi under Government reform: Dated 22.04.2016


Dear Mr McDonnell

I would like to thank you for your exceptional support with your petition and in general you have provided us which has brought a very positive result of AQA making an announcement about the retention of  Panjabi A level qualification in the future. This news was welcomed by A Level Action Group with great enthusiasm and  with a sigh of relief.

We the Panjabi speaking community, specially the Sikhs community would like to express our heartiest thanks to you for your support since April 2015.

We at A Level Action Group are committed to work with AQA to whatever support is needed in the future to maintain Panjabi A Level qualification to the standards as required by DfE and Ofqual.

Hoping to hearing from you soon.


Yours sincerely


G Singh

( On behalf of A Level Action Group )


Gurjit Gill, Dr J S Nagra, Ranjit S Dhanda, Harmeet S Bhakna, Nirmal Singh Kandhalvi, Niranjan S Dhillon,                                                                     

t: 07940 974011  e:       f : Save Panjabi A Level 2015

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John McDonnell Addresses Anti Austerity March



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State of the Economy Conference – Saturday 21st May




As Labour’s Shadow Chancellor, on Saturday 21st May I am pleased to announce that I am convening a ‘State of the Economy’ conference at Imperial College in London and you are invited to join us.  


Following on from my ‘New Economics Lecture Series’, currently touring the country to open up the debate about the future of our economy to people outside of Westminster, this one day conference will hear from experts about the current state of the UK economy but will also be an opportunity for everyone to pitch in their own ideas.  


I am delighted we have a range of excellent speakers confirmed already including Ha-Joon Chang, Richard Murphy, Anastasia Nesvetailova, Jonathan Portes, Adrienne Roberts, Anneliese Dodds MEP and many more. 


In the morning and afternoon workshop sessions we have planned I am very much looking forward to hearing the ideas that you have to bring to the conference where we will be discussing a range of different topics ranging from tax, sustainable economics, debt, technology and alternative models of ownership to name just a few. Groups confirmed already to take part in the workshop sessions include the Women’s Budget Group and the Jubilee Debt Campaign. 


Labour’s entire Shadow Treasury team will be attending and chairing sessions throughout the day and the ideas that are discussed will help to inform our ongoing policy making process.  


Tickets are £10 to cover the cost of the venue and refreshments on the day. Please register to come here: 


I really hope you are able to join us for what should be a fascinating and exciting day of debate, contributions and ideas.  





John McDonnell MP


Shadow Chancellor of the Exchequer

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Economics for the Common Good?

This is a speech I delivered to Christians on the left as part of The Tawney Dialogue in Westminster Central Hall.

Thank you very much for the opportunity to say a few words this evening.

I wanted to pick up on the question posed by the title.  There’s a tendency to think that economics has little or nothing to do with the morality. If you’re on the left it is an argument that sometimes gets used against us.

Of course, our opponents will argue, it would be very nice to live in a fairer or more equal society. It would be nice, they might say, to ensure everyone has a decent home to live in, or access to education. But something that gets labelled “economics” is against all that.

“Economics” is apparently against the wealthy paying fair taxes. Or it’s opposed to funding public services properly. Some people argue this more in sorrow than enthusiasm, of course. Others enthusiastically embrace the idea of unfettered free markets.

The underlying belief is that whilst we might not enjoy it, the best way to run an economy is through free markets and low taxes. So although the left may mean well, it is argued that we simply don’t understand how to run the economy. This is unfair on the left. But it also misses an important point

Questions of morality have always informed economic thinking. It was Adam Smith, arguably the first modern economist, who described economics as a "moral science". I think that description is a good one. It is a science because considering economic problems requires serious analytical thought. And it is moral because ultimately it deals with questions of justice and fairness - of who gets and owns what.

We have to consider the two sides together. It is in this light that Labour is still developing its thinking. There are two major challenges ahead of us. The first is in winning the argument that an economic policy of the left can work. There is a desperate need for change.

The figures on homelessness or child poverty are national disgrace. Here in London, immense wealth nestles side-by-side with some of the worst poverty in the country. But we can see it also in the explosion of zero hour contracts.

There is an entire generation of young people growing up now with zero expectations about the future. They are trapped in low-wage, insecure work and inadequate housing. Owning a home of their own is an increasingly distant dream.

The moral case for a change in direction is clear. But the left has comparably little trouble winning that argument. Where we have trouble is not in convincing people of the moral case for change. Our difficulty, and it is the biggest single difficulty the Labour Party faces, is in convincing people that we can deliver this change.

I’ve called the fight for economic credibility by the Labour Party the biggest it has faced for a generation. We might not think this fight is fair. The financial crisis was global. It did not happen because of Labour overspending. But it happened on Labour’s watch and the last Labour government was too lax in its approach to finance.

Nonetheless, to give George Osborne and David Cameron their credit, once the financial crisis truly erupted in late 2008, they moved very fast. They flipped their support for Labour’s spending plans completely on its head. They have argued insistently for nearly eight years that the crisis was due to Labour spending too much.

Now this is nonsense. You don’t get a banking crisis because you employ too many nurses or teachers. You get a banking crisis because, to be blunt, you employ too many bankers.

But aided and abetted by a media campaign, the Tory leadership have drummed home the message that Labour caused the global financial crisis. I believe that message is now losing its appeal as the consequences of austerity become apparent. George Osborne is backing away from it, seeking to blame current economic difficulty

We will not be able to help create a fairer, more equal society if we are not trusted on the basics of handling the economy. Since Jeremy was elected, back in September, we’ve put in place the structures needed to start to win back credibility.

But that leads us to the second, deeper challenge.

Some might think there is a quick and easy solution to the problem of Labour’s economic credibility. One that means we concede the argument to the Conservatives and sign up to their own economic policy. I don't believe this would be the right course for us not only because I don't believe the austerity policies pursued by this government are fair.

They are clearly not.

Had we signed up to the Conseravtive's' spending plans, we would not have been able to move so quickly in opposing the disgraceful cuts to the Personal Independence Payment announced in March's Budget. Winning a reversal of that cut was a major success for us. But the Conservatives' economic policy is not just unfair. It is a failure on its own terms.

Just this week, the International Monetary Fund has revised its estimates for the UK's growth downwards. This follows a major revision downwards by the official forecasters, the Office for Budget Responsibility, back in March. Looking in to the details, the Office for Budget Responsibility cite a slump in productivity since 2007 as the main reason for the UK economy's weakness.

Since the crash, and with George Osborne as Chancellor, we have seen economic growth based on the creation of a large number of poorly paid, insecure and low productivity jobs. At the same time, consumer spending is increasingly sustained by rising levels of debt.

The OBR is forecasting unprecedented borrowing by households over the next few years, just to keep the economy moving. This should sound familiar. It was household debt that kept the economy moving before the crash, too. All of this points towards not just a failing with Osborne's economic policy. There are deep, structural problems that a government committed to real reform would address.

The challenge for those on the left will be in winning the case for those reforms. I think we can do it. The consensus amongst economists is today unusually large. Austerity measures are opposed across the board.

And the IMF, the OECD, the CBI and the TUC are all now arguing for a major programme of investment by government to help national economies weather the storm. Labour's Fiscal Credibility Rule will allow a future government the flexibility to invest in vital infrastructure like new rail, and renewable energy.

The current government, instead, is cutting government investment - flying in the face of the consensus. It's wedded to a particular vision of the economy in which the state's role is reduced to a minimum, and financial interests take precedence.

This isn't just a moral question. It means leaving the whole economy more exposed to risks. We've had two terrible examples of this in the last fortnight or so. The threatened closure of the Port Talbot steelworks places 40,000 people at risk of losing their jobs.

The case for government action is clear.

Labour has argued for its four-point plan to stabilise this vital industry and place it on a secure footing for the future. Yet extraordinarily when the market for steel globally has been trashed by the "dumping" of cheap steel by China, this government has not just refused to intervene. It has actively blocked attempts to prevent dumping by the EU.

One EU official went so far as to claim that this is "payment" by the government to China for handing over the contract to build Hinkley Point C nuclear power plant. Whatever the case, it is quite extraordinary to find a British government actively arguing against Britain's clear economic interests.

Or take the Panama Papers leak. This is about far more than just a few individuals seeking to minimise their taxes, as some Conservative MPs have claimed. What the Panama Papers show is that tax avoidance is entirely systematic. The total amount of wealth held in tax havens has been estimated at $21 trillion. It is a direct result of the massive increase in inequality we have seen over the last thirty years or more.

Extremely wealthy individuals and very large corporations, aided and abetted by shady operators like Mossack Fonesca, have been able to construct an entire offshore world. They can reduce their taxes to a bare minimum, unlike the rest of us who make a fair contribution.

And at the centre of this offshore world is the City of London. Respectable London banks and accountancy firms are at the centre of the tax avoidance system, setting up thousands of offshore shell companies. This has direct economic consequences.

Every pound squirrelled away like this is a pound not invested here. Every offshore trust investing in London property is not investing in the productive economy. The super rich and big businesses are hoarding their wealth and failing to invest for the future. One estimate puts the corporate wealth hoard at £700bn for the UK alone.

This money should be put to work. It should be invested into helping create the high tech, high wage economy of the future.

So opposing tax avoidance isn't just the right thing to do because it means fighting for fairness. It is the right thing to do because it means helping create a better economy for all of us.

We have to make a break with the failures of the past. What the crash of 2008 should have taught us above all else is that we cannot allow financial interests to sit in the driving seat of our economy again. We run the risk of being driven into a wall, again. The IMF today also warned of the increased risk of a future financial crisis.

I'm concerned about what happens in the future. I don't think we have an economy that is well prepared for an increasingly uncertain world.

As Labour develops its economic thinking, we want to win the argument not just that what we are doing is morally right. We need to win the argument that we have the best solutions to the series of problems that now threaten our economy.

Economics and economic policy is always informed by morality.

I believe that if we get this balance right, we can win a majority with the idea that not only should the economy be more just. It should also be more efficient. The two are inseparable.

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John McDonnell’s Opposition Day Speech on the Panama Papers

Mr Speaker, I wish to move the motion that stands in my name and that of my Hon Friends.

On tax avoidance and evasion we need to move the debate on to the issue of the fairness and effectiveness of our tax system.

I say to the House we need to do so as constructively as we can.

The leak of documents from Panama lawyers Mossack Fonseca has provoked an extraordinary public discussion.

An entire hidden world has been brought into the light.

What it reveals is profoundly unsettling.

We now know that Mossack Fonseca sat at the centre of a vast web of tax evasion and tax avoidance.

The world’s super-rich commissioned its services to hide their income and wealth from the public gaze.

Some of them had plainly criminal intentions.

Money from the Brinks Mat robbery was allegedly laundered through a shell company set up by Mossack Fonseca.

Mexican drug baron Rafael Caro Quintero held his property through a shell company established by Mossack Fonseca.

But even if they were not criminals, many of Mossack Fonseca’s clients, if not all, had the strong intention of evading or avoiding the taxes that would otherwise be due from them.

Mossack Fonseca exploited the presence of loopholes and entire jurisdictions that favour secrecy and minimal taxation.

We can expect further news over the next few weeks and months, as the investigative work continues.

Yesterday the Panama headquarters of Mossack Fonseca was raided but ten days since the initial leak, I believe their UK offices in Hitchin have not been.

This is despite concerns being raised by the firm’s founder over the lack of due diligence the UK office performed over a company in their charge and a clear legal precedent for UK authorities to intervene.

There may well be more revelations, set to tarnish individual reputations.

The Prime Minister has done himself no favours over the last week.

A lesson for the future is that when asked a straight question, to answer straightforwardly, straightaway.

The Prime Minister could and should have come clean about his relationship to Blairmore Holdings far earlier.

Even today, we have not seen his full tax return, or that of the Chancellor.

What we are confronted with today, however, is far bigger than any individual.

At the centre of the allegations is a single issue.

The fundamental problem is not tax avoidance by this individual or that company.

These are symptoms of the disease.

The fundamental issue is the corruption of democracy itself.

At the centre of our Parliamentary system is the idea that those who levy taxes on the people are accountable to the people.

If those making decisions on our taxation system are believed to be avoiding paying their own taxes it undermines the credibility of the system.

The common understanding is also that those who live here and benefit from public services will make a proportionate contribution towards them.

The level of taxation may vary. Sometimes it is higher and sometimes it is lower.

But because we have a shared sense of fairness, we expect those with the broadest shoulders to carry the greatest burden in taxes.

But what we have seen over the last thirty years is the growth of wealth inequality on such a scale that it has undermined that basic principle of our democracy.

Figures from Oxfam suggest that the richest 1% own more than the rest of the world combined.

Great hoards of assets, in property and in financial wealth, have been built up.

On the best available measures we have - the levels of income inequality in Britain today are climbing as high as they were at the time of the First World War.[1]

The share of income going to the super-rich has risen almost inexorably for three decades.

We are returning to the levels of inequality we had before universal suffrage.

Before women had the vote.

Before the development of universal free education and healthcare.

A world before the gains of democracy brought obscene levels of wealth inequality under control and created a more humane society for the majority.

The world of the Rockefellers and the robber barons is the one we are returning to.

Immense, almost unimaginable wealth for a gilded elite but insecurity for growing numbers.

Much of that wealth is now held off-shore in secretive, unaccountable tax havens.

Twenty-one trillion dollars, equivalent to one-third of global GDP, is estimated to be hidden from taxation systems in global tax havens.

If taxed fairly, that wealth might easily raise $188 billion a year in extra taxes.

This isn’t about a few families looking to “minimise their tax bill”, as the Member for Gainsborough claimed.[2]

It is systematic.

It is an offshore world operating parallel with the world the rest of us live in.

This is not an accident.

The offshore world is being constructed, piece by piece, by multinational corporations and the super-rich.

They are aided by shady offshore operations like Mossack Fonseca.

We have to be honest about this- supposedly reputable accountancy firms here in London play their part.

PWC have, according the Public Accounts Committee, aided tax avoidance “on an industrial scale”.[3]

Deloitte have advised big businesses on avoiding tax in African countries.[4]

Ernst and Young act as tax advisors to Facebook, Apple, and Google.[5]

And just last month KPMG has had one of its tax avoidance schemes declared illegal by the High Court.[6]

All together, the Big Four accountancy firms earn at least £2bn annually from their tax operations.

Banks headquartered and operating in London have been particularly proficient in directing their funds through Mossack Fonseca shell companies.

HSBC and its affiliates created more offshore companies through Mossack Fonesca than any other bank. Over 2,300 were created in total.

Coutts, a subsidiary of RBS, created over 500 offshore companies through its subsidiary in Jersey.

Supposedly reputable companies are aiding and abetting the systematic abuse of our tax system.

We should be clear about this.

The City of London is viewed by many as a tax haven, in the middle of a dense network of havens created for the super-rich to avoid the taxes the rest of us must pay.

This is the world that the super-rich inhabit.

They live by different rules.

It is an alien world for the majority of us.

It is a world of off-shore trusts and legal trickery that would put Byzantium to shame.

A world in which it is perfectly normal to buy property in London through a company registered in the British Virgin Islands, managed by lawyers in Panama with offices in Bermuda.

A world in which citizenship and attachment to a country is something to pick and to choose depending on price.

The scandal of the “non-doms” continues, in which a few super-rich can pay a notional fee instead of the taxes that would otherwise be due from them as residents.

Tucked away in this year’s Budget was an extraordinary clause that wrote off selected non-doms entire capital gains tax bill on any gains made before April 2017.

This is not the world that most of us live in.

Most of us pay our taxes.

Contrary to the opinion of the Member for Rutland and Melton, this is not because we live in a country “low achievers”.[7]

We do so because we understand that a decent society depends on the contribution all of us make.

Without the payment of taxes, we cannot run the public services that are essential to a decent society.

We don’t have access to the kind of specialist services Mossack Fonseca and other companies provide.

We can’t negotiate with HMRC about when and how much to pay.

But for the global elite, tax avoidance is as much part of their world as the yachts or the country mansions.

This world is a corrosive influence on our democracy.

The more the super-rich can escape the burden of taxation, the more it falls on the rest of us who cannot.

It is morally wrong that a billionaire oligarch should be paying proportionately less in taxes than the migrant cleaner of his mansion.

It is a disgrace that an immense global corporation like Google should pay no corporation tax for nearly a decade, whilst small businesses are chased for tiny amounts.

And it is an affront to the basic principles of our democracy that large corporations should be able to negotiate sweetheart deals with the HMRC.

It is also a corrosion of democracy when a revolving door apparently exists between HMRC, charged with collecting taxes, and major accountancy firms whose business depends on minimising taxes.

HMRC’s last director went to work for Deloitte.

And now we find that the executive director appointed by HMRC to oversee its inquiry into the Panama leaks is a former advisor to tax havens who believes that tax is a form of “legalised extortion”.

The structures of government itself are being bent out of shape by tax avoidance.

Decisions are warped around the need to protect the interests and wealth of the super-rich and the giant corporations.

Democracy becomes corroded.

The party opposite receives more than half of its election campaign funding from hedge funds.

In public view, here in London, its leadership have made loud and repeated noises about tax avoidance.

Yet its MEPs in Brussels have voted six times, on instructions from the Treasury, to block EU-wide measures against tax avoidance.

The Prime Minister lobbied the EU Commission in 2013 to remove offshore trusts from new, tighter EU regulations on avoidance.

The Conservatives’ own record reveals they are not trusted on this issue.

Not only have they impeded efforts to clamp down on tax avoidance, these schemes directly implicate senior figures in the Conservative Party.

Several Conservative Party donors, three former Conservative MPs and six members of the House of Lords are among those with connections to companies on the books of the offshore law firm Mossack Fonseca.

As the super-rich flee their obligations to society, the burden of taxation is pushed elsewhere.

Independent assessments of tax and benefit changes introduced since May 2015 show that the poorest 10% are forecast to see their incomes fall by more than 20% by 2020.

Women will be hit hardest of all, having already borne nearly 80% of cuts introduced since 2010.

It is the poorest and those least able to carry the burden who will suffer the most under this government.

An economic system that allows tax avoidance on this scale is one in which the inventor or the entrepreneur is second to the owner of wealth.

The worker comes second to the plutocrat.

The tax-payer comes second to the tax-dodger.

It is a system where inherited wealth and privilege, not talent or effort, is rewarded.

The last Labour government took measures against avoidance.

Its measures on corporation tax avoidance are forecast by the Financial Times to raise ten times as much revenue as the present Chancellor’s schemes.

But the Panama leak must act as a spur to decisive action.

In response to the Panama leaks, the Government has stepped up the rhetoric on tax evasion but much of what has been announced falls short of what is needed or repeats existing announcements.

I remind the Ministers opposite that page 223 of the OBR report that accompanied this year’s budget included a disclosure scheme for companies operating in Jersey, Guernsey and the Isle of Man. Due to its consistent underfunding HMRC simply did not have the resources to follow up on the links of the scheme.

The Government’s proposed taskforce will report to members of the Government from a party funded by donors featured in the Panama papers. To have any credibility any inquiry must be fully independent.

A gentle word of advice to the Prime Minister. Less press releases and more action.

It is time to move on closing the tax havens, cleaning out the muck of avoidance. Step by Step.

We need an immediate, full, public inquiry into the Panama papers leaks.

We must shine a light on and start to prise apart the corrupt networks that operate through tax havens.

Part of that means creating a proper register of MPs interests. Members of this House should not be able to hide behind spurious claims of privacy.

We want HMRC properly resourced to chase down tax avoiders, with a new specialist unit dedicated to the task.

Foreign firms bidding for government contracts here should be required to name their owners.

Full, public, country-by-country reporting of earnings and ownership by companies is a necessity if fair amounts of taxation are to be charged.

The measures announced by the EU this week do not go nearly far enough, requiring only partial reporting by companies.

The turnover threshold is far too high and Labour MEP’s in Europe will be pushing to get this figure reduced to a much lower level so that many large corporations find it far more difficult to dodge paying their fair share of tax.

Banks need to reveal the beneficial ownership of companies and trusts they work with.

This means creating a public register of ownership of companies and trusts, not only companies as the government is currently enforcing.

Labour will work alongside leading tax experts to lead a review into publishing a public register of the trusts too often used to avoid paying tax and reduce transparency in our tax system.

And we must ensure that Crown Dependencies and Overseas Territories enforce far stricter minimum standards of transparency for company and trust ownership.

The government’s current programme for reform is being laughed at by the tax havens.

Only this week, after signing a new deal on beneficial ownership the Cayman Islands Premier Alden McLaughlin was celebrating a victory over the UK saying:

"This is what we wanted, this is what we have been pushing for three years for.”[8]

The truth is the government is playing into the hands of those who want to abuse the tax system.

We need serious action on enforcement.

We need, as Christian Aid and others are calling for, not central registers but full public registers accessible to all including journalists and other businesses if we are going curb the sort of activities exposed in the Panama Papers.

This package of measures is Labour’s Tax Transparency and Enforcement Programme.

We believe it offers a sound basis to take the first, necessary steps against avoidance and towards openness and transparency.

We are presenting them today as we want to see immediate effective action.

This is a test of leadership.

The leadership of the Party opposite could take this opportunity to correct the series of errors it has made.

It can join us in taking effective steps towards dealing seriously with avoidance.

People want to see the Party opposite take these steps.

Otherwise they will rightfully stand accused of siding with the wrong people.

They will rightfully stand accused of being party of the tax avoiders.

Incidentally it’s not that long ago the Chancellor of the Exchequer appeared on television to give advice on the “pretty clever financial products”, as he described them, that would allow the wealthy to dodge inheritance tax.

Some of the Conservative Party’s backbench MPs believe tax avoidance is a sign of success.

Its donors are named in the Panama Papers.

And the Prime Minister himself is a direct beneficiary of a scheme set up in an offshore tax haven through his prior ownership of Blairmore Holdings shares.

So the Panama leaks have presented a stark political choice.

Do we continue to support, as the Party opposite will continue to support, a system of corruption and avoidance?

Or do we now take the action necessary to restore fairness to our tax system, and correct the abuse of democracy?

That is the challenge, and the choice, ahead of us.

I urge the Government and all members of this House to join us in a serious programme of work to tackle the abuse of our tax system.

The Government can make a start by supporting our motion today and adopting Labour’s Tax Transparency Enforcement Programme.

I commend this motion to the House.

[1] Piketty figures for the top 5%.

[2] Edward Leigh, Hansard, 11 April 2016





[7] Alan Duncan, Hansard, 11 April 2016


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Labour’s Tax Transparency Enforcement Programme

Labour’s Tax Transparency Enforcement Programme

Tax havens play no positive role. It should be a matter of shame to the British Government that, despite all their rhetoric, more than half the companies recently named in the Panama Papers were registered in UK governed tax havens. The involvement of senior figures in foreign governments has given the impression of a nexus of influence and opacity involving major political and corporate players avoiding taxes in countries across the globe. High net worth individuals are not the only users of tax havens. Earlier this year it emerged that profitable large technology companies have paid a tiny fraction of their turnover in corporation tax, moving a large proportion of their global profits into UK overseas territories. While closer to home, a recent period of disclosure for tax repatriation from Crown dependencies brought significantly less than promised, with HMRC blaming their staff’s inability to process on top of existing workloads. Recent revelations in the ‘Panama Papers’ have shown that the Government’s approach to closing tax havens in British overseas territories and crown dependencies has not delivered the returns the Government promised. We need a new and more effective approach

Labour is proposing:

1. An immediate public Inquiry

The Labour Party wants to see an immediate public enquiry launched into the revelations in the Panama Papers, to establish the harm done to the UK’s tax revenue and consider detailed proposals for reform including, if necessary, greater amendments to UK company and/or trust law to increase transparency.

2. Greater Parliamentary Scrutiny

Change the register of members’ interests to include mandatory publication of all offshore holdings.

3. Specialised Tax Enforcement unit

Labour wants HMRC to be properly resourced to investigate any potential illegality whether in relation to tax law or conflicts of interest for legislators. We would double the number of staff scrutinising the tax affairs of High Net Worth individuals and companies.

4. Public Sector Transparency

Foreign companies wanting to tender for public sector contracts must have their beneficial owners listed publicly. Examine proposals for companies bidding for public sector contracts and procurement to register for tax purposes in the UK, including full disclosure of beneficial ownership listed publicly and accounts filed with Companies House.

5. Cooperation with European partners: Country by Country Reporting & protection for whistleblowers

Full public publication of country-by-country reporting for multinationals negotiated at EU level with agreed fairer thresholds for reporting for companies and obligations to report publicly about activities in every country in which they operate, be it inside or outside the EU.

Support proposals for genuine and robust protection and safeguards for whistleblowers in this area at a European level. 

6. Firm Anti-Avoidance Rule

Introduction of a General Anti-Avoidance Principle, strengthening and extending the General Anti-Avoidance Rule to cover offshore abuses.

7. Crack down on accounting tricks

Look into the development of the ‘Ramsay principle’ by courts. Courts should ignore “artificial steps” inserted in transactions to try and reduce the tax on the transaction.

8. Enforce our programme working with the banking sector

Work with banks to provide further information over beneficial ownership for all companies and trusts that they work for.

9. Strict minimum standards for crown dependencies and overseas territories: All territories which enjoy the protection of the UK for their financial stability, foreign policy and/or security policy must adhere to a minimum standard of transparency in relation to company and trust ownership.

This minimum standard will include a public register of owners, directors, major shareholders and beneficial owners for all companies and trusts.

10. A Labour led review into the registry of Trusts

Labour will launch a review to produce detailed proposals for a registry of (a) trusts which transfer the residence of their trustees offshore and (b) tax avoidance schemes involving trusts which are disclosed to the HMRC under the current law.  In the case of trusts with no beneficial owner listed, the settlor would be deemed the beneficial owner.

The legal precedents for enforcing major legislative standards on overseas territories are many: in recent years the UK government has intervened in the Caribbean overseas territories over corruption, the death penalty and legalising homosexuality. Eric Pickles said in October 2015 that the Government could legislate to force UK-governed tax havens to reveal true owners of companies.

Labour believes that a precedent has been set. There are minimum ethical standards which territories must adhere to if they wish to enjoy the status and protections associated with British overseas territory status. In return for improving transparency, under Labour the UK would give overseas territories financial support to aid the transition to build economies which are not reliant on offshore financial services. Labour will seek to add any countries which are acting as tax havens to the OECD blacklist. In the case of the Crown dependencies, under Labour the UK will no longer support their existing EU concessions (eg. no trade barriers) if minimum standards are not met.

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McDonnell lays out five-point plan to shine a light on tax avoidance

Labour List 11th April 2016

Labour has sought to capitalise on the Tories’ catastrophic handling of the Panama Papers scandal by demanding a public inquiry as it published a five-point plan to increase tax transparency.

John McDonnell, the shadow Chancellor, said the row over tax avoidance came down to an “issue of basic morality and national security”.

Now the party has published a series of demands designed to deal with “the impression of a nexus of influence and opacity” involving senior politicians and business people around the world.

Its proposals are designed to increase scrutiny on David Cameron, who will be forced to defend himself again today, when he makes a statement on the Panama Papers to MPs.

Labour is proposing:

  • ·         An immediate public inquiry into the revelations contained in the Panama Papers.
  • ·         To force MPs and peers to publish details of any offshore investments they hold.
  • ·         Increased resources for HMRC to investigate potential breaches of the law, politicians facing conflicts of interest, and the tax arrangements of businesses and wealthy individuals.
  • ·         A “beneficial ownership” register revealing the ultimate owners of foreign companies when they bid for contracts in the British public sector.
  • ·         Country-by-country reporting for multinational firms to be negotiated at EU level.

McDonnell said it should be a “matter of shame” to the Government that more than half the companies named in the Panama Papers were registered in UK-governed tax havens.

“Not only has this Government impeded international efforts to crack down on tax avoidance and to tackle tax havens but senior figures are personally implicated in these immoral schemes.

“Labour’s Tax Transparency Enforcement Programme will stop the super rich hiding their wealth from legitimate taxes whilst the rest of us our told there is not enough money to pay for the public services we all rely on. No longer will the richest wilfully avoid paying their fair share while disabled people have their support to live independently brutally cut.

“Under this Government there has been one rule for the rich and another for the rest of us. Tax haven corruption is not just a tax issue – it drives at the very heart of our democracy and its credibility. We risk eroding public trust in our democracy if we do not tackle the issue head on.”

McDonnell also sought to link tax avoidance to the funding of other crimes, including violence.

“These sorts of schemes fund terrorism and launder criminals’ money. It’s not just about tax avoidance. It’s an issue of basic morality and national security to take on this sort of behaviour.

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This is a crisis rooted deep in Tory attitudes

The guardian comment is free 5th April 2015 John McDonnell

The Panama Papers highlight the growing concern that there is one rule for the very rich and another for everyone else. For when individuals and companies manipulate the tax rules to reduce their tax bill, this understandably outrages those ordinary people paying the price of deficit reduction, and businesses who play by the rules. They, reasonably, expect a level playing field. The Panama Papers have destroyed any illusion of fairness in our tax system.

However, it goes even deeper than that. For the papers expose the Tories from top to bottom as a party that is not only failing to tackle tax avoidance, but deep down doesn’t really want to either. David Cameron, for example, says he has “some savings” from which he “derives some interest”, but does this mean any of his “savings” come or have come from Blairmore or any offshore tax arrangements at any time? He should just put the record straight rather than try to wriggle around, fooling no one.

The revelations also bring into question the government’s record in tackling tax avoidance and tax havens in particular. The UK has a huge responsibility to deal with this. Many of the tax havens fuelling the problem are British overseas territories or crown dependencies, relying on British financial, foreign policy and security support. Three years ago Cameron promised to get the UK’s own houses in order, but he has failed.

Virtually no progress has been made in ensuring the UK’s overseas territories and crown dependencies meet the UK government’s demands. But then, there is no evidence that the Tories were committed to this in the first place. Since the general election, they have dropped their commitment to public registers of beneficial ownership, despite Cameron claiming two years ago that “making company beneficial ownership information open to the public is by far the best approach”.

So we shouldn’t be surprised that a year ago Tory peer Lord Blencathra described Cameron’s crackdown on tax havens as a “purely political gesture”, or that former Tory foreign office minister Grant Shapps appeared to row back on the Tories’ demands, in a visit to the Cayman Islands last year.

The Treasury minister David Gauke let the cat out of the bag in parliament last month when he admitted that the UK’s overseas territories “are not committed” to a public register of beneficial ownership. Despite this continuing failure, the Tories continue to make the absurd claim that they are leading the way on the issue.

But then, this is the pattern we have come to expect from Cameron and George Osborne – big announcements and lots of rhetoric, with broken promises to follow. Take, for example, the UK-Swiss tax agreement, announced to great fanfare in 2011. It has raised a fraction of the £5bn promised.

And it came as no surprise when in the budget last month the Office for Budget Responsibility revealed that a key anti-avoidance measure announced in 2013 – a disclosure facility with the crown dependencies – is set to raise just a quarter of what Osborne initially promised.

Tories should not be judged on what they say but what they actually do. On six occasions last year, Osborne instructed his MEPs to vote down proposals to clamp down on multinationals engaged in tax avoidance. Meanwhile, in January it was revealed that the government had been lobbying the EU to remove Bermuda from an official blacklist of tax havens.

As more and more revelations emerge, it is increasingly clear that this is a Tory crisis, firmly rooted in their beliefs and attitudes. While the PM and chancellor mutter platitudes in public, their inaction in tackling these problems exposes those true beliefs. The Tories should come clean and set out their position: is the prime minister happy to receive money from big donors accused of tax avoidance?

The government needs, as Jeremy Corbyn has said, to stop dithering. There should be an immediate, independent investigation into the tax affairs of all British people linked to the Panama Papers. And, given the important role the UK plays in our crown dependencies and overseas territories, the government must now set out what further action it is prepared to take to achieve greater transparency.

There is no reason why the UK cannot use its relationship with these tax havens to force them to stop dragging their feet. At the very least, there should be strictly enforced minimum standards of transparency, including the publication of public records of companies’ accounts, directors, major shareholders and all beneficial ownership of trusts. Without these things, how can we possibly have faith that wealthy people and corporations are not receiving preferential treatment compared with those of us who fill in tax returns or have it deducted automatically?

Labour has already called for tax havens to be blacklisted unless they produce a public register of company owners and sanctioned if they fall foul. And it is surely time that the chancellor listened to our calls to end the unjustifiable cuts to staffing numbers at HM Revenue and Customs, as they cannot be put in a position where their hands are being tied.

The super-rich elite cannot be allowed to dodge their taxes and flout the rules. This unfairness and abuse must stop, and stop now.

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John McDonnell says "doing nothing is not an answer" as he unveils his four point action plan to rescue the British steel industry

The steel crisis exposes the Tories as out of touch and incompetent.

Forty thousand workers and their families face the loss of their livelihoods.

As we saw under the Tories in the 1980s, closures like this can tear apart entire communities.

Even some Tory MPs share Labour’s call for emergency measures like nationalisation not to be ruled out.

Yet David Cameron refuses to recall Parliament for an emergency debate.

Some have tried to claim measures to combat climate change are to blame.

However less than two per cent of steel production costs are due to climate measures.

In reality, British steel is in crisis because of the dumping of cheap steel by China and because we have a government that will not take the action necessary.

Other EU countries like Germany and Italy have acted to protect their steel industries.

The barrier to action isn’t in Brussels. It’s in West-minster, where the Government has spent three years blocking EU action.

One EU official even claimed the Tories were blocking action on dumping as a “thank you” to China.

This has done us no good. China has slapped a 46 per cent tariff on British steel.

Labour has different priorities. This is our four-point Action Plan to save British steel:

  • Stabilise the industry and protect steelworkers by allowing time for a buyer to be found but being prepared to nationalise plants threatened with closure.
  • Fast-track key investment projects like high-speed rail in the North, and build them with British steel.
  • Create a level playing field. The Tories must stop blocking EU initiatives to protect steel but also look at business rates and energy prices.
  • Restructure the industry so it has a future, in partnership with workers, management and major customers working alongside government.

This isn’t just about the jobs and communities now being threatened.

It’s about how we start to make an economy that works for the good of all.

Doing nothing is not an answer.

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ITV Interview with Shadow Chancellor: the government must act swiftly on Tata

Shadow Chancellor John McDonnell says the government needs to act immediately to take a public stake in the steel sector in the wake of Tata's decision to sell off its UK businesses.

He says we need to work with our European partners to protect against the dumping of Chinese steel on the international market as part of a long term strategy to make the UK market viable.

Watch his full interview:




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John McDonnell calls for U-turn, saying cut would give 200,000 wealthy people as much as government planned to take from disabled. Guardian 25th March 2016

George Osborne’s budget is handing a tax cut averaging £3,000 to some of the wealthiest people in the country who make up just 0.3% of the population, the shadow chancellor, John McDonnell, has said.

Labour is calling for the cut in capital gains tax (CGT) to be scrapped, saying it would give investors already making money about the same, on average, as the government had planned to take from disabled people under changes to benefits.

The party is planning to campaign against the CGT cuts in the coming weeks to apply more pressure on the chancellor following Iain Duncan Smith’s shock resignation as work and pensions secretary, when he branded Osborne’s budget “deeply unfair”, triggering the scrapping of the disability benefit cuts.

McDonnell said Osborne was the “bankers’ chancellor” and had been shown again to be “looking after a wealthy minority”.

A spokesman for Osborne hit back that Labour was “shameless and hypocritical”, given that CGT for the highest earners would still be two percentage points higher than it was at the end of Gordon Brown’s government.

Osborne made the surprise announcement of a cut in capital gains tax (CGT) – from 28% to 20% for higher rate taxpayers and 18% to 10% for those on the basic rate – in the budget as a way to encourage people to invest in shares. The tax is applied on profits on the sale of assets that exceed £11,100 and is paid by a very small minority of people.

There is no official impact assessment showing how many people will benefit, but government sources indicated they thought about 130,000 people would gain from the tax cut, of whom about 50,000 are basic rate taxpayers and 80,000 higher rate taxpayers. The source suggested the median benefit for higher rate taxpayers would be £2,000 on a one-off basis.

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John McDonnell says George Osborne is playing with our economy in a vain attempt to gain a pointless political victory

Last week George Osborne presented a Budget that was barely worth the paper it was printed on. We discovered that not only has he massaged the figures, including shuffling around billions in corporation tax receipts, but that he has also squeezed in a flotilla of unspecified cuts. The Chancellor is doing this not because he needs to balance the books, but because he wants to hit an arbitrary target for the government surplus in 2019-20.

This is an entirely political choice, not one made through economic necessity. Proof is provided by Osborne himself, as he now claims he can “absorb” £4.4 billion in disability cuts he has reversed, despite previously having claimed they were necessary.

He is still going ahead with tax breaks that will go overwhelmingly to the wealthiest 5 per cent, by cutting capital gains tax. And for big corporations he is continuing to slash corporation tax worth billions more in revenue. Obviously if he can’t collect Google’s taxes then he thinks he might as well cut them. Meanwhile he plans to cut real-terms funding for schools by 8 per cent.

In worsening economic circumstances, due (as the Office for Budget Responsibility have explained) to a weakening domestic economy, the Chancellor should have taken remedial action. Labour’s calls for a major boost to government investment have been joined by a growing coalition that now includes international expert bodies like the IMF and the OECD, alongside the TUC and CBI at home. Astonishingly, however, the Chancellor has planned for government investment to fall over the lifetime of this Parliament.

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George Osborne is unfit to hold office

John McDonnell Guardian Comment 23rd March

It’s said that a week is a long time in politics – but under this chancellor a weekend is the length of a “long-term economic plan”. That’s exactly how long George Osborne was able to stand up his own budget before it collapsed.

It’s unprecedented in modern history for a budget, the centrepiece of a government’s economic policymaking, to disintegrate so rapidly. Yet Osborne has achieved it.

Under intense political pressure, he has reversed his cuts to disability benefit. Within four days of presenting his budget to parliament, it no longer adds up,. And remarkably he has been forced into accepting two opposition amendments, on tampon tax and solar subsidies.

The attempted defence in parliament revealed two central facts. First, that he will not apologise to those many thousands of people with disabilities who have spent more than a week worrying about the loss of their essential payments. Yet he was able to say he was “sorry” that his fellow Tory Iain Duncan Smith resigned.

The personal independence payment (PIP) is paid out to allow those who have disabilities to live with some autonomy, often in order to enable people to get to work. This is state support for things such as preparing or eating food, washing and bathing, reading and communicating.

To propose taking up to £150 a week away from disabled people that helps them to live independently and with dignity is a chilling example of the lengths Osborne is willing to go to in putting his own political career ahead of the long-term good of our nation. The cuts to PIP are morally indefensible, and reveal a chancellor that has chosen austerity over basic humanity.

Second, it is clear from his speech that the chancellor has no idea how he is going to fill the £4.4bn black hole left in his budget. Osborne confidently believes that by autumn the losses would be “absorbed”. But you can’t “absorb” £4.4bn. In reality, paying for this means cuts elsewhere, or stealth taxes – something the chancellor has become rather adept at.

He is, in other words, banking on a more favourable outlook for the economy by the time we get to the autumn statement. This is the equivalent of hoping to find money down the back of the sofa. As Robert Chote, director of the Office for Budget Responsibility (OBR), put it when announcing pessimistic new forecasts: “What the sofa gives, the sofa can also take away. ”This is why I said he was more a chancer than a chancellor.

George Osborne could, very easily, pay for PIP by reversing his cuts to capital gains tax, which benefit the richest 5%, and the projected cuts to corporation tax. But he will not do this because at the centre of his budget was a cold political decision. The chancellor wants to achieve a surplus on government spending by 2019-20, by spending £10bn less than it receives in taxes.

He claimed he would eliminate the deficit by last year; it is still over £70bn. He claimed he would be bringing down the government’s debt burden, relative to GDP; it is rising and set to rise further.

The OBR has revised growth forecasts down. They have revised wage growth down. They have revised business investment down. They have revised productivity down. 

The productivity slump is the most fundamental problem. It is the weakness of productivity that undermined wider growth. This is a domestic issue for which Osborne must take responsibility. He has presided over a low-wage, low-productivity, low-investment recovery that is built on sand.

Instead of cutting government investment, still scheduled to fall over the lifetime of this parliament, he should be following the advice of the IMF, the OECD, the CBI, the TUC and international experts in driving investment up.

Labour’s fiscal credibility rule, developed in consultation with, and supported by, world-leading economists, offers a framework through which we can eliminate the deficit fairly. We can avoid the counterproductive and cruel cuts we have seen under this government while allowing government the capacity to invest in the future.

But the chancellor clings to his surplus target because his political credibility would disappear entirely if he lost this last remaining fiscal rule. Not a single respectable economist can be found in defence of the surplus rule. But Osborne does not care how much pain it inflicts on the most vulnerable and he does not care how much damage it does to the economy. He cares very deeply, however, about his political career.

Not only have the chancellor’s plans been revealed to have no basis in economics but they are devoid of basic morality. He is not fit to hold the office.

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McDonnell calls for 'urgent rethinking of Osborne's failing economic policy'

John McDonnell, the shadow chancellor, has put out a statement calling for a rethink of George Osborne’s entire economic strategy. He said: 

Iain Duncan Smith’s resignation must now provoke an urgent rethinking of George Osborne’s failing economic policy.

The cuts that George Osborne is inflicting on some of the most vulnerable in our society are not only cruel but unnecessary. As the former secretary of state alluded to in his resignation letter, these cuts are a needless attempt by this chancellor to meet his own nonsensical fiscal rules. 

To take up to £150 a week from disabled people is a chilling example of the lengths George Osborne is willing to go to in placing his own political career and fiscal rules ahead of the long term good of our nation. 

Labour have offered to work with the government to revise their failed approach and instead ensure we have a fiscal policy that is fair, sustainable and shares the wealth more equally within our society. 

Labour’s fiscal credibility rule, developed in consultation with world leading economists offers a framework through which we can eliminate the deficit fairly, avoiding the counter-productive, needless and cruel cuts we have seen under this government.

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John McDonnell’s Response to the Budget

Budget Resolutions and Economic Situation; House of Commons Budget Debates, 17 Mar 2016

It has now been the best part of 24 hours since the Chancellor delivered his Budget. There are some things in it that I would like to welcome. On the sugar tax, we look forward to seeing more detail about how it will be put into practice. I agree with my right hon. Friend the Member for Islington North (Jeremy Corbyn) who said yesterday that we needed a comprehensive strategy to tackle the growing problem of obesity. I regret, therefore, that £200 million has been cut from public health budgets this year—those are the budgets that were to be used to develop that strategy.

We are also pleased that the Chancellor is looking at addressing savings overall, though we wonder whether the new lifetime individual savings accounts will do much to address the scandal of low retirement savings for the less well-off. On the rise in tax thresholds, we welcome anything that puts more money in the pockets of middle and low earners, but we wonder how that aim can sit alongside the Conservatives’ plans to cut universal credit. 

It is about time that we had some straight talking about what this Budget means. It is an admission of abject failure by the Chancellor. For the record, in the six years that he has been in charge of the nation’s finances, he has missed every major target he has set himself. He said that he would balance the books by 2015, but the deficit this year is set to be more than £72 billion. He said that Britain would pay its way in the world, but he has overseen the biggest current account deficit since modern records began. 

The Chancellor promised us a “march of the makers”, but manufacturing still lags behind its 2008 levels. He said he would build his way out of our housing crisis, but we have seen new house building fall to its lowest level since the 1920s. He said that he had moved the economy away from reliance on household debt, but, yesterday, the Office for Budget Responsibility said that his entire plan relied on household debt rising “to unprecedented levels.” He said that he would aim for £1 trillion of exports by 2020. Yesterday’s figures suggest that he will miss that target by the small matter of £357 billion. 

When it comes to the Chancellor’s failures, he is barely off the starting blocks. The fiscal rule he brought before Parliament last year had three tests. We already knew that he was likely to fail one of them, with the welfare cap forecast to be breached. Yesterday, it emerged that he will fail the second of his tests. Having already raised the debt burden to 83.3% of GDP, it is set to rise now to 83.7% this year. Therefore, since the new fiscal rule was introduced, it is nought out of two for the Chancellor’s targets. 

Yesterday, the OBR revised down its forecast for growth for this year, and for every year in this Parliament—in some cases by significant margins. That is reflected in lower forecasts for earnings growth. The Resolution Foundation says that typical wages will not recover to their pre-crash levels before the end of this decade. It is not just forecasts for economic growth and wages that are down. Those are driven by productivity, which has also been revised down for every year of this Parliament. Any productivity improvements last year have disappeared. As the OBR said, it was, “Another false dawn”. Perhaps that is not surprising. After all, productivity is linked to business investment, which should be driving the recovery, but which plunged sharply last quarter. 

As I have said, perhaps the fall in productivity is unsurprising, because productivity is linked to business investment, which should be driving the recovery, but which plunged in the last quarter. 

I can tell the House what happened to business investment forecasts—they were revised down again in this Parliament. None of this should be a surprise for the Chancellor, but it seems that it is. At the autumn statement, he said that he wanted a plan “that actually produces better results than were forecast.” ”.—[Official Report, 25 November 2015; Vol. 602, c. 1385.]

The Secretary of State for Work and Pensions said this last week about the autumn statement:

“If you can’t forecast more than two months, how in heaven’s name can you forecast the next four or five years.”

That is what we all want to know. 

Yesterday the Chancellor pointed repeatedly to global economic headwinds as an explanation for his failure. His problem is that we have known about them for a while. Many of us were warning him last summer about the challenges facing the global economy. I spoke about them in this place, as did others on the Labour Benches, but rather than adapting his proposals to deal with the global reality, the Chancellor has charged headlong into another failure of his own making. He has failed to heed our warnings and the warnings of others, he has failed to invest in the key infrastructure that our economy needs, and as a result he has failed to boost Britain’s productivity figures. 

On productivity, it is the Chancellor’s failure to boost Britain’s productivity that is at issue. The Office for Budget Responsibility is very clear on this point. British productivity, not global factors, is the reason the Chancellor is in trouble. Robert Chote, the head of the OBR, confirmed in an interview last night that “most of the downward growth revisions were not driven by global uncertainty, but by weaker than thought domestic productivity.” As a result of that, we now see drastically reduced economic forecasts and disappointing tax revenues. 

The Chancellor has been in the job six years now. It is about time he took some responsibility for what has happened on his watch. It is not just on basic economic competence that the Chancellor has let this country down. Unfairness is at the very core of this Budget and of his whole approach. 

The Chancellor said in 2010 that this country would not make the mistakes of the past in making the poor carry the burden of fiscal consolidation. The facts prove that that is just not accurate. According to the Institute for Fiscal Studies, the long-run effect of all tax and benefit changes in last year’s autumn statement would mean percentage losses around 25 times larger for those in the bottom decile than for those in the top decile. 

Let me repeat what the IFS said so that everyone is clear: the percentage losses were about 25 times larger for those at the bottom than for those at the top. So much for the Government’s statement about the broadest shoulders taking the strain. Furthermore, time and again, it is women who have borne the brunt of the Chancellor’s cuts. Recent analysis by the Women’s Budget Group showed that 81% of tax and welfare changes since 2010 have fallen on women. 

The distributional analysis by the Women’s Budget Group shows that by 2020 female lone parents and single female pensioners will experience the greatest drop in living standards—by 20% on average. In the case of older ladies, the single female pensioners, the cuts in care are falling upon their shoulders. I find that scandalous in this society. 

It is disappointing, too, that the Budget offered no progress on scrapping the tampon tax. The Chancellor is hoping for a deal from the EU on the tax. If there is no deal, we will continue to fight for it to be scrapped. 

Young people have also paid a heavy price during the Chancellor’s tenure. It is not just the education maintenance cuts in the last Parliament, or the enormous hikes in tuition fees; it is the dream of home ownership receding into the distance for young people on average incomes.  

The new Lifetime ISA will not resolve that. With pay falling so sharply for the young, there can be very few who can afford to save £4,000 a year.

We know that so far on the Chancellor’s watch, people with severe disabilities have been hit 19 times harder than those without disabilities. If that were not enough, the Government are now taking over £100 a week out of the pockets of disabled people. Even for a Chancellor who has repeatedly cut public spending on the backs of those least likely or least able to fight back, this represents a new low. I believe it is morally reprehensible. 

On disability, I am appealing to the Chancellor to think again. We will support him in reversing the cuts in personal independence payments for disabled people. If he can fund capital gains tax giveaways for the richest 5%, he can find the money to reverse this cruel and unnecessary cut. 

I just say this across the House: this is a very important issue—we will not make party politics of this. As someone who has campaigned on disability issues in the House for 18 years, I sincerely urge all Members to press the Chancellor to think again. This cut is cruel, and it is, unfortunately, dangerous for the wellbeing of disabled people. 

If corporation tax—already the lowest in the G7—can be reduced yet further, money can be found so the Government can think again about making yet more cuts to people with disabilities. 

Finally, I want to talk about the future. Yesterday’s Budget does not meet the needs and aspirations of our society. It fails to equip us for the challenges ahead. It fails to lay the foundations for a stronger economy that could deliver prosperity shared by all. 

The Chancellor has repeatedly told us we are the builders, and yesterday we heard more of it. On infrastructure, we are back to press-release politics: projects announced with no certainty of funding to complete them—projects that should have started six years ago. It is always tarmac tomorrow. If stories about garden suburbs sound familiar, it might be because we have heard them before. Announcements about garden suburbs have become a hardy perennial of the Chancellor’s announcements. 

However, despite all the rhetoric, all the re-announcements and all the photo opportunities in high-vis jackets, one statistic is in black and white in the OBR’s documents: public sector investment as a share of GDP is scheduled to fall from 1.9% last year to 1.5% by the end of this Parliament—a lack of investment in our infrastructure that will hold back the growth of our economy. 

On education, it seems that we are back to the politics of spin and stunts. Forcing schools to become academies will do nothing to address the shortage of teachers, the shortage of school places and increasing class sizes. Forcing schools to compete for the extra-hour funding places more bureaucratic burdens on headteachers, with only a one-in-four chance of gaining that additional funding. 

We have learned this morning that there is a half-a-billion-pound black hole in the funding needed for the Chancellor’s plans for schools. I would welcome the Secretary of State for Education confirming whether she will find the money to ensure that, if academisation is funded, schools are fully funded for that process. 

As for long-term financial planning, it is increasingly clear that the Chancellor is determined to flog off anything that is not nailed down, in a desperate attempt to meet his self-imposed targets. 

Last year, we noted that the Chancellor could meet the conditions of his fiscal rule only by selling off profitable state assets, even at a loss to the taxpayer. Official figures yesterday suggested that taxpayers will face a loss of more than £20 billion pounds as a result of the Chancellor’s decisions on RBS share sales. 

Yesterday, again, we learned that the Government are considering the privatisation of the Land Registry. That is despite their deciding against it as recently as 2014. That is despite the Land Registry returning millions of pounds in profits to taxpayers. That is despite a 98% customer satisfaction rate. It makes no difference to this Chancellor: everything must go, everything is up for sale. When will he learn that you cannot keep paying the rent by selling the furniture?

 The Chancellor has consistently put his political career ahead of the interests of this country. Yesterday he tried to do the same, and he failed. His disastrous economic failures are the result of putting personal ambition ahead of sound economics.

The Chancellor is clinging to the tattered remains of his fiscal charter, using it to justify brutal cuts to vulnerable people. In contrast to his rule—widely savaged by economists, and now on the point of being torn up by Government statisticians—Labour has a real alternative. Labour will build a society based on a fair tax system, where the wealthy and powerful pay their fair share. In line with recommendations from the OECD, the IMF, the G20, the CBI and the TUC, Labour will invest to grow opportunity and output. Labour will eliminate the deficit by growing our economy. Labour will invest in skills for a high-wage, high-tech economy. 

In contrast to the Chancellor’s broken promises, we will balance Government spending, using a fiscal credibility rule developed, and recommended to us, by the world’s leading economists—our economic advisory council. We will balance Government spending, but not, like the Chancellor, by bullying those who will not fight back. We will invest to deliver shared prosperity, with people able to fulfil their potential, and a country meeting its potential. 

Let me make this clear: Labour does not want to see the Chancellor drive the economy over a cliff, blinded by his adherence to a fiscal rule that everyone now knows cannot work. In the interests of this country, we are making him an offer: let us work together to design a fiscal framework that balances the books without destroying the economy. However, let me also make this clear: if he refuses our offer of co-operation, Labour will fight every inch of the way against the counter- productive, vindictive and needless measures the Chancellor has set out in this Budget. Britain deserves better than this. 

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John McDonnell MP, Labour’s Shadow Chancellor, speech at the RSA on Labour’s approach to the economy

Rewriting The Rules

Thank you very much for the opportunity to speak here at the RSA on Labour’s approach to the economy.

George Osborne will be presenting his Budget to Parliament next week. As is usual, much of its content has been trailed in the press.

Or, rather, much of what will not be in it has been trailed.

Osborne is not, we are told, now considering changes to pensions tax relief.

Osborne would like to, but will not, be cutting the top rate of income tax, we are told.

He is too scared about his future career prospects to risk it.

And then, in news he snuck out late on a Friday evening, Osborne announces that the “economy is smaller than we thought” and that as a result further spending cuts or tax rises may be needed to hit his own target for a surplus.

What an astonishing about-turn from a chancellor who had, just a few months before, declared that we had arrived at the sunlit uplands.

Osborne claimed at the time of the Autumn Statement his economic plan was producing “better results than expected”.

Now he has to admit, shamefaced, that the results are worse than he expected.

When George Osborne said the sun was shining, what did he do?

He cut flood defences.

He cut policing.

He decimated local authority spending.

Women in Britain are now facing, according to the Fawcett Society, the greatest threat to their financial security and livelihoods for a generation.

The truth is that George Osborne’s recovery is built on sand.

Business investment is falling.

Exports are falling.

The productivity gap between Britain and the rest of the G7 is the widest it has been for a generation.

Without productivity growth, we cannot hope, over the long term, to improve living standards for most people.

The truth is that we are failing to meet our potential. Failing to reach our potential means failing to meet the aspirations of our people.

It means a gender pay gap that is still wedged at 19 percent.

It means seeing a 22 percent fall in earnings for the self-employed in just a few years.

It means those wanting to grow their small businesses deprived of the loans they need by a failing banking system.

It means another 100,000 people pushed into the insecurity of zero-hours contracts.

It means a whole generation of our young people for whom the security of home ownership is rapidly becoming an impossible dream.

George Osborne will be presenting his Budget next week.

It could be an opportunity to begin to turn things round.

Instead, we can expect more of the same from this Chancellor.

More wheezes. More short-term political fixes.

And in defiance of the growing consensus in the economics profession he will continue to pursue spending cuts.

At a time when the IMF and the OECD are insisting on the need for increased government investment, George Osborne is planning for government investment spending to fall as a share of GDP.

He claims that a “cocktail of threats” elsewhere in the world means that now is the time to hunker down.

He couldn’t be more wrong. Now is the time to break with the failed approach he has taken that has left this economy more exposed to shocks elsewhere in the world.

George Osborne’s Budget should be about safeguarding the economy, and equipping it for the future.

Osborne’s policies do neither.


Austerity is a political choice

Austerity makes little sense in economics terms.

But it is a politically easy choice for the UK, since it works to the benefit of powerful vested interests.

Maurice Obstfeld, currently chief economist at the International Monetary Fund, wrote a fascinating paper on this back in 2013.

In it, he describes perfectly the logic driving Osborne’s cuts agenda.

When countries have very large financial systems, Obstfeld argues, they must have small governments.

This is because large financial systems are prone to spectacular collapse, as we saw in 2008.

When that happens, governments are expected to step in, arranging bailouts and propping up the economy.

So government must be small today in case of a major financial crisis tomorrow.

This is exactly what Osborne has aimed at since 2008. Cutting the state down to size, in case of a further financial risks.

Behind this is a limited, cramped vision of what this country could achieve. Instead of arguing for a financial sector that serves society, Osborne is arguing for a society that serves the financial sector.

That is his political choice.

His choice, and the choice of too many past governments, imposes a real cost.

The Bank of International Settlements have argued that these financial expansions have resulted in a serious misallocation of investment.

When capital is misallocated, it means that whilst giant chain stores can always grow, the small, family-owned business looking to expand can’t get the finance its needs.

Capital is flowing the wrong way.

We can see this today, after the crash.

Society’s resources have been diverted away from productive use, and into low-productivity investments.

The underlying economy was weakened by excessive financial expansion, even if, during the boom years, this was disguised by comparatively rapid economic growth.

We chased the illusory gains of financial expansion, and neglected real wealth creation.

Our boom was bigger, but our bust was all the greater.


Labour’s alternative in outline

Labour’s alternative has to be nothing less than a radical break with the past.

There can be no turning the clock back, whether to 1997 or 1945.

In the words of our Economic Advisory Council member Joseph Stiglitz, we must now “rewrite the rules” of how our economy operates.

The old rules have failed too many. They have meant extraordinary rises in inequality, and falling social mobility.

They have meant low investment, low productivity, and low pay, even as a lucky few have done extremely well.

Rewriting the rules today means three things.

First, an absolute commitment to responsible financing by a future Labour government.

The old rules meant relying too much on tax revenues from financial services, and too much on expensive funding schemes like PFI.

We didn’t do enough to clamp down on tax avoiders.

We should show how we can account for every penny in tax revenue raised, and every penny spent.

There is nothing left-wing about ever-increasing government debts, or borrowing to cover day-to-day expenses.

Borrowing today is money to be repaid tomorrow.

With a greater and greater portion of our government debt now held by those in the rest of the world, government borrowing increasingly represents a net loss for those of us living here.

The public, rightly, want a government that is responsible with its finances. We in the Labour Party have to show them how we will act as a responsible custodian.

We shouldn’t be the Party that only thinks how to spend money.

We are the Party that thinks about how to earn money.

The clue is in our name. We are the party of labour – the party of the wealth creators, of technicians, designers, machinists, entrepreneurs – the party of workers and small businesses.

We need to get back to the best of our own tradition.


Entrepreneurial state and the reviews

Second, we need to use government’s capacities wisely.

Another Economic Advisory Council member, Marianna Mazzucato, has written brilliantly about the role an “entrepreneurial state” can play in establishing new industries and driving innovation.

I can give you an example. Just last week it was announced that the United States’ Advanced Research Projects Agency-Energy, ARPA-E had made a major breakthrough in battery technology that could hugely accelerate the spread of renewable energy.

ARPA-E was established by Barack Obama as recently as 2009 to promote blue-sky research in new energy technologies. It is kind of innovative approach we could be drawing on here.

Britain has an extraordinary heritage of scientific research. We can and should be doing more to draw on this, and to improve the application of this research.

Instead, real spending on research and development has fallen by £1bn under George Osborne’s watch.

If we want to create the economy of the future, we cannot have a government that stands idly by.

The state should be making the long-term, patient investments that are the foundations of long-term prosperity.

That should be prosperity shared across the whole country. And it should be aligned to a functioning, twenty-first century industrial policy.

There’s a glimmer of what this might look like already, in the extraordinary turnaround of UK motor manufacturing.

Prompt action by Government and the Secretary of State for Business in the aftermath of the crash stabilised the industry and laid the foundations for its recovery.

Today, Britain’s car industry exports more than ever before. It is the most productive in Europe.

There are still problems here, of course. There is not a single domestically-owned motor manufacturer. Its supply lines, like those across much of manufacturing, are hugely internationalised.

But it is crucial example that effective government intervention, carefully applied, can produce results.

This is about more than a few policy changes. We need to take a close look at how the institutions charged with overseeing the economy function.

So we’ve launched reviews, led by experts, of the major institutions of economic governance.

Lord Kerslake, former head of the civil service, is reviewing the Treasury.

Accountancy expert Professor Prem Sikka is reviewing the role of HMRC.

Danny Blanchflower, former Monetary Policy Committee member, is reviewing the MPC itself.

In each case, we want to take a forensic approach to understanding how these core institutions can best deliver the prosperous, fair economy of the future.

This isn’t about making the state bigger or smaller. It’s about making it smarter.


Socialism from below

Third, we need to unlock the potential of the wider economy.

The figures are clear. The potential of this economy is being held back by the weakness of the supply-side.

George Osborne’s policies have held back demand. But it is on the supply-side that, it is now clear, we need the biggest shake-up. This is what the slump in productivity indicates.

There is a growing coalition of economists, unions, and businesses who will support government investment in infrastructure.

That is one part of the solution.

Another is in the provision of skills. Latest figures suggest that 22 percent of all jobs vacancies are going unfilled as a result of a lack of candidates with the right skills or experience.

Here, too, government can intervene directly. But it must do so effectively. The present Chancellor’s solutions are inadequate. Ofsted was damning in its report on the many new apprenticeships being offered. The surge in numbers had led to a slump in quality.

We’re not just failing our young people if we fail to provide them with the skills they need. The entire economy suffers as a result.

But government action alone is not enough.

I’ve said before that our watchwords on the economy will be democracy and decentralisation.

We need a far more sophisticated argument about ownership that does not just fall into the caricature of either pure privatisation, or monolithic state control.

Decentralised ownership of electricity production, as we see in Germany or Denmark, must play an important part in the shift to low-carbon production.

But we can go further than this. Government can clear the barriers that hold back entrepreneurship and innovation.

This doesn’t just mean blind deregulation. It means taking on the vested interests that hold back aspiration.

The potential is there. If we mobilise the potential of our small businesses, giving them the opportunity to match the productivity growth of small businesses across Europe, we can boost GDP by £140bn.

We need to clear barriers to their financing, and think creatively about how to fund their expansion.

For instance, Britain has an extraordinarily concentrated banking sector that is not serving customers properly, particularly small businesses.

We need a network of regional and local banks, in tune to the needs of their local businesses and communities.

A Labour government should not be afraid of taking on the big monopolies where they are failing the rest of us.

We are moving into a world in which more and more people are starting businesses, or becoming self-employed.

We must welcome genuine entrepreneurship, and extend employment protection to the self-employed.

And we should be unafraid to support new models of business ownership and management, like worker-owned enterprises and co-operatives.

Worker-owned and managed enterprises are typically more productive and are less likely to fail in a downturn than those in more conventional ownership.

I’ve spoken before about creating a Right to Own for employees, giving them first refusal on taking over a company when it changes hands.

Over the next few years, many small business owners will be looking to retire. Yet two-thirds of family businesses face being sold off for the lack of anyone to take over.

Employee ownership, supported by government where needed, can be an important part in safeguarding their future.


Fiscal Credibility Rule

I want now to return to my first point on sound finances. Sound finances are the foundations on which everything else is possible.

We know a rule for spending is needed. It should make clear the framework in which a future Labour government will make its spending decisions so that the public can trust those spending decisions.

We also know investment is needed.

Others in my party are in agreement with me on the case for investment and jobs, but the public need more than platitudes from our party.

At a time when major international organisations and central banks are calling for a rethink in how economic policy operates, we need clarity and a vision.

Following discussions with our Economic Advisory Council and expert advisors we have decided to recommend a Fiscal Credibility Rule which will underpin Labour’s fiscal position.

We believe that governments should not need to borrow to fund their day-to-day spending.

And that is why we would commit to always eliminating the deficit on current spending in five years, as part of a strategy to target balance on current spending over a target five-year period.

While there are exceptional times when shocks from the private sector mean that government has to step in to help, everybody knows that if you’re putting the rent on the credit card month after month, things needs to change.

Alongside this, we recognise the need for investment which raises the growth rate of our economy by increasing productivity as well as stimulating demand in the short term.

That is why our target for eliminating the deficit excludes investment.

And because we want to ensure that the Government’s debt is set on a sustainable path, we will commit to ensuring that, at the end of every Parliament, Government debt as a proportion of trend GDP is lower than it was at the start.

It is essential for our future prosperity that we retain the ability to borrow for investing in capital projects which over time will pay for themselves.

We owe that, at least, to those whose homes are endangered by flooding, many of whom suffered so much this winter.

But we also know that we are entering a period of great uncertainty for the world economy, which may put many existing economic structures under pressure.

Economists are debating secular stagnation, savings gluts, demographic transition and many other explanations.

Meanwhile inside central banks across the world policymakers are grappling with the concepts of negative interest rates, extended QE purchases, raising inflation targets, and even so-called helicopter money.

Only yesterday we saw the European Central Bank entering new territory with a new and broader programme of quantitative easing.

One thing is clear: we are in unprecedented times.

So it is right that, if conventional monetary again becomes constrained by hitting a lower bound as it did after the global financial crisis, we understand when fiscal policy has to take some responsibility.

And that is why we will reserve the right, for as long as monetary policy is unable to undertake its usual role due to the lower bound, to suspend our targets so that monetary and fiscal policy can work together.

Rather than an arbitrary cut off for GDP forecasts, we will suspend our rule in the circumstances when it is clear that fiscal policy needs to work together with monetary policy to get the economy moving again.

Taken together, these principles will underlie everything we say about fiscal policy.

We, as Party, as interested in how Government earns money as much as how it spends money.

I am making no announcements today about our spending commitments.

We will be discussing policies democratically across the Labour Party for the next few years, as we have pledged throughout and since Jeremy’s election campaign.

But I promise that, from now on, any potential commitments we do make will be judged on how they fit into our Fiscal Credibility Rule.

And to oversee all this we will make sure that the Office for Budget Responsibility is properly resourced and genuinely independent, reporting to Parliament.


Most important fight for a generation

Why have we been having this conversation now?

In my recent speech at the London School of Economics I said that Labour faces its most important fight in a generation.

It is clear that regaining the public’s trust with the public finances must happen before the electorate will consider trusting Labour with the keys to Government again.

There is no short cut to regaining fiscal credibility with the electorate.

We have a long way to go before we can regain the trust that was lost after the global financial crisis of 2008, which happened on Labour’s watch. There is no silver bullet.

But the first stage of that is to lay out our framework for overall fiscal policy. To show that we can be trusted, that we take seriously our responsibility as stewards of the nation’s finances.

In coming to this position we have consulted with some of the most eminent economists in the world.

This is in stark contrast to George Osborne’s own fiscal rules.

Since adopting an even stricter target than the one he repeatedly missed during the last Parliament, his approach has been savaged by economists on all sides.

The Financial Times and the Economist, every single economist who appeared in front of the Treasury Select Committee criticised Osborne’s new rule. Literally every single one, including those on the political right.

There is absolutely no economic case for Osborne’s fiscal rule. It is designed solely with the Tory leadership contest in mind.

It is time for him to put the national interest above his own political ambitions, and adopt a fiscal rule that can sustain shared prosperity.

We will take this rule through our party policy processes and on to Labour Party conference, where our overall economic strategy will be determined.


Fairness and the future

We have a huge potential in this country. But we have a Chancellor that is failing us.

He is sacrificing the bold, necessary action we need for the sake of his political career.

At a time when we should be looking forward, and setting down the solid foundations for secure future prosperity, we have a Chancellor who is too busy looking back.

Jeremy was elected on a promise of “straight talking, honest politics”. We need a bit of straight talking, honest economics if we want to realise our potential.

This means an end to the bluff and bluster.

We need a Budget that is about fairness, and about the future.

With that in mind, let me ask four things from the Chancellor for his Budget next week.

First, as Jeremy Corbyn called for last week, to jump start investment across the country we need a National Investment Bank, with the capacity to deliver investment funding where it is urgently needed.

Second, new infrastructure is welcome. But needs to be backed by real government commitment.

Our Fiscal Credibility Rule means that we can end the nonsensical situation in which George Osborne can make endless announcements on infrastructure projects, but then fail to find the means to finance them.

This is simply not serious when the UK is falling down the OECD’s infrastructure rankings.

His efforts at persuading the private sector to step in have flopped. His Pensions Infrastructure Platform to persuade pension providers to invest was expected to raise £20 billion. In fact it has raised just £1 billion.

Just 9 percent of the projects in his Infrastructure Pipeline are currently being built.

If the funding isn’t available, it means vital new projects like Swansea’s Tidal Lagoon are delayed, and delayed again.

Our Fiscal Credibility Rule will provide us with the means to finance vital infrastructure, whether it is high-speed broadband or new rail connections in the North.

Third, our housing crisis is a national disgrace.

We need bold action to address it. Housebuilding has slumped to the lowest level since the 1920s with George Osborne as Chancellor.

We are building around half the number of homes we need.

Wheezes and quick-fixes from the Chancellor won’t address this.

We know new homes alone won’t solve the problem. But we have to do better than this.

We are failing the aspiration of our young people to own their own homes.

We are failing too many to provide the most basic minimum a decent society demands.

Our Fiscal Credibility Rule can provide us with the secure, credible foundations to unlock the financing necessary to deliver the new homes we so urgently need.

We think a programme to build 100,000 new homes a year could begin to address the crisis. My colleague John Healey has offered furthers proposals here.

And finally on fairness, we will insist on wanting to see a Budget from George Osborne in which, unlike its predecessors, it is not the poorest who suffer the most.

Year in, year out, Osborne’s Budgets have leaned too hard on those least able to bear the burden.

We want to see a government and a Chancellor who does not just make noises about fairness, but who delivers. We will be looking closely at independent distributional analyses of his impact, to see that the poorest in society do not continue to bear the brunt.

In particular we will be monitoring the expected effect of his decisions on women, who have borne the brunt of 81 percent of his cuts.

George Osborne had the opportunity to deal with this. He still has, next week. But it will less thinking about his political career, and more thought about the future of this country. It will require boldness, and challenging some of the vested interests in his own party.

Labour will rewrite the rules to build a fairer, more prosperous economy.

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INTERVIEW: John McDonnell on the Gender Pay Gap - By Libby Mayfield 8th March 2016

In 1970 the Equal Pay Act came into force, but even now we still see women on average earning 80p to a man’s £1. Research by the UN suggests that it may up 70 years before the gender pay gap closes, and there are more than enough startling figures about how few women are in senior management positions, even in the UK.

Several day ago I met with John McDonnell, Shadow Chancellor of the Exchequer, at the first East Midland’s Momentum Conference to discuss Labour’s view on the gender pay gap.

McDonnell ‘s disgust at the gap is almost tangible, describing it as “appalling”, adding: “I just find it staggering – we’re talking 40 years on and we still have this situation.”

Today marks Labour’s Shadow Cabinet meeting in Barking and Dagenham where the first equalities legislation was produced after the Ford sewing machinists strike of 1968. McDonnell said: “This is not just symbolic. We want to use that Shadow Cabinet to discuss in detail some of the policies that we’re advocating.

“First of all we want to tighten up the legislation that tackles discrimination in that way.

“The second is to make sure that we improve the trade union rights in this country so that women can be fairly represented, and the government is trying to undermine trade unions’ rights as a result of the trade union bill.

“Then it’s looking at investment, in particular skills training. Investment in bringing women forward through education opportunities as well, so that’s also about tackling the issue of tuition fees which I think still act as a deterrent for many working class women to stay on into higher education and go to university.

“It’s also looking at how girls and young women are treated in the whole educational system.”

As well as these steps, which all seem perfect on paper, he mentioned a more pragmatic way to measure the party’s policy success: “We’re launching a women’s commission as well, so we bring women in from all walks of life to advise us on the development of those policies and their implementation.”

He finished by adding: “It isn’t just income; if you look at the number of chief executives of major companies that are women, there are very few women on boards, or women in senior management positions.

“There’s been a recent assessment about austerity and where the cuts fall, and 81% of the cuts fall on women – again it demonstrates the nature of our society in terms of inequality, but also demonstrates the inequality of policy making as well.”

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John McDonnell says Powerday application will cause 'chaos' on high street

The Hayes and Harlington MP has penned a letter to the council, urging them to reject a waste recycling plant in West Drayton

John McDonnell has pledged his support to residents in fighting against a waste recycling plant planning application in West Drayton .

The Hayes and Harlington MP and Shadow Chancellor has written to Hillingdon Council 'strongly urging' them to reject Powerday's application to transform the old coal depot site on Tavistock Road.  


Powerday Plc submitted a planning application to demolish the existing Old Coal Depot buildings and construct a 'Materials Recovery Facility' (MRF), despite a promise in early 2015 not to develop the site and after a five year battle with residents.

The site, which will incorporate a recovery and recycling building, storage bays and associated car parking, landscaping, fencing and infrastructure, will recover recyclable materials such as plastics, glass and cardboard from businesses and households.

But the site was previously rejected by Hillingdon Council after a 4,000-strong petition, and active residents are gearing up to campaign again.

John McDonnell wrote to the Council to object to the first application and back put his backing of campaign against the site into writing again.

He believes the town centre is not equipped to deal with large volumes of HGVs, is concerned for increased traffic and worries for residents being exposed to fumes.

He wrote: “I share residents’ concerns that the access point will be opposite West Drayton bus and train station.

“Not only will this cause chaos on the High Street and surrounding roads but buses and passengers alike will have to negotiate with huge lorries that will be trying to access the plant.

“This proposed development is in the heart of a densely populated area. I believe that such a development will have a detrimental impact for those working and living in the vicinity and beyond.

“This proposed development does not provide any benefits for the local community and will undoubtedly affect the residents’ quality of life as they will be exposed to noise, light and air pollution as well as an increase in traffic 24 hours a day, 7 days a week.”

John McDonnell joins residents opposed to the building of a large recycling facility

Mr McDonnell also asks that the council consults as widely as possible on the application as it will have an impact on the wider area.

The Hayes and Harlington MP told getwestlondon : “After an overwhelmingly negative response to the first planning application by Powerday which included a petition signed by over 3000 people it’s frustrating that we’re now having to reject a second bid.

“I share the concern of local residents who say that our local area is already heavily congested and that this development would worsen the traffic problems and result in more air pollution and noise.

“I believe that such a development will have a detrimental impact for those working and living in our area and that Powerday need to accept the wishes of our local community”.

Residents were previously lobbying MPs to put their support in to writing, after support from Councillors and the local Assembly Member .

Boris Johnson , MP for Uxbridge and South Ruislip , was contacted but has not commented on the application.

Cllr Jan Sweeting, councillor for West Drayton is hoping for more information from Powerday in the coming weeks.

She said: “The GLA are currently asking for more information.

“Once we have a date for the committee meeting we'd like as many people from Yiewsley and West Drayton to attend and have an opportunity to be there when the council makes the decision.”

Katherine Clementine, Get West London, 29th February 2016

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John McDonnell MP, Labour’s Shadow Chancellor, speaking after Treasury Questions today, said:

"The Chancellor had no answers today as his economic plans were brought into question. Instead he left it to his deputy, the Chief Secretary, who had no meaningful defence of this government’s record.

"We all remember the Chancellor’s boasts at the end of last year but he was quiet today when asked why he now thinks the economy is smaller than he used to claim.

"George Osborne is keen to find fault with everyone but himself. However, since the Autumn Statement, we’ve seen business investment fall, his exports target secretly abandoned, the trade deficit widening, manufacturing entering recession, construction entering recession, the productivity gap widen to the biggest it has been for a generation, and unsecured household debt rising at record rates. 

"In the week that a former Bank of England governor says the banks have failed to learn their lesson, it's clear we have a bankers’ Chancellor who has failed to learn his lessons too."

In response to the claims by George Osborne that the 45p rate has raised £8 billion more in taxes than the 50p rate, John McDonnell MP said:

"No one seriously believes these fantasy figures from George Osborne. And it will come as no surprise that yet again this bankers' Chancellor is playing fast and loose with figures to justify his tax giveaways to a wealthy few, while making the rest of us worse off.

"The truth is that the delay in implementing the 45p rate probably allowed significant time for many wealthy people to structure their tax arrangements so that they could simply pay it at the Chancellor's new lower rate. Now George Osborne is trying to hide the fact that this was really a giveaway to people at the top while everyone else pays more'."

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OECD – This is a highly important intervention.

John McDonnell MP, Labour’s Shadow Chancellorresponding to the OECD’s Interim Economic Outlook, which calls on countries like the UK to reduce their austerity measures and increase investment spending, said:

“This is a highly important intervention by the OECD, who in the past have been relatively supportive of the government’s economic policy, but George Osborne is starting to look increasingly isolated, as now the latest report from the OECD confirms what Labour have been saying that the Chancellor should change direction.

“The OECD are correct to advise, what Labour has been arguing for months, that we need to increase investment, as the time is right to invest now in our future in much needed infrastructure, so that we avoid paying more at a later date for missing this opportunity.

“But the truth is that since entering Number 11, George Osborne doesn’t put his money where his mouth is on infrastructure spending. He cut the level of investment in the UK with investment in infrastructure set to fall as a share of GDP, and he has allowed the Infrastructure Pipeline to become blocked with only 9 per cent of projects listed as started.

“Today’s statement from the OECD will come as yet another hammer blow to this downgraded Chancellor’s already fading economic credibility. But George Osborne has to start to listen and cannot just stand in the way for what is best for the UK economy out of fear for his Tory leadership bid.”

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Full house at LSE for John McDonnell's talk on Labour's economic policy

LSE.jpg‘Labour is interested in how we earn money not just how to spend it’  

It is now five months since Jeremy Corbyn turned the British political world upside down and became leader of the Labour Party.

His campaign spoke of the need for a ‘New Politics’ and touched a nerve with thousands of people up and down this country who instinctively understand the need for radical change.

Our job is now to deliver that change, and I believe we have made real progress in doing so.

A few weeks after Jeremy asked me to take the job as Shadow Chancellor, George Osborne brought his so-called Charter for Budget Responsibility to Parliament.

Now these have become something of a farce in recent years. Each time, the Chancellor solemnly informs us this is how he will address the finances of the Government.

And each year he misses the targets he set himself, and tries again.

When we spoke to our colleagues it became clear that the mood which carried Jeremy to the Labour leadership was beginning to shift opinion throughout the Labour Party, and there was a real appetite for opposing Osborne’s plans.

We voted against them and drew a clear unequivocal line in the sand.

From now on, the Labour Party is an anti-austerity party, which rejects the failed approach to macroeconomics that has done so much damage to this country and across Europe.

I am immensely proud of that, and I believe all of us in the Labour Party should be.

But this is just the very beginning. It is not just bad macroeconomic policy which holds back the potential of the UK.

We want to look root and branch at every aspect of the British economy and especially how it interacts with the process of government.One of the first things we did was to commission a series of reviews by respected figures in their fields into the key institutions of economic decision making.

Lord Kerslake, the former Head of the Civil Service, is conducting a review into the workings of the Treasury. He has brought together an impressive team of experienced figures from the public and private sector to look at whether its current role and mandate are appropriate.

In particular, I have asked him to look separately at the roles of the Treasury as an “economics ministry” and as a “finance ministry”.

Alongside that, Danny Blanchflower, formerly of the Bank of England’s Monetary Policy Committee, is looking into the make-up and mandate of the committee.

I’ve asked him to report back on whether the MPC has the mandate it needs to meet the challenges and uncertainties of the future, or whether changes need to be made.

Professor Prem Sikka of Essex University is conducting a review for us into the operation of HMRC and whether it is fit for purpose.

This topic now seems even more important following the recent revelations about Google’s tax bill.

And finally, alongside these external reviews, my colleague Seema Malhotra is looking at the system of tax reliefs which has developed over the years.

We want to understand whether they work as intended in incentivising business investment.

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Labour claims missed opportunity

George Osborne has been accused of missing a golden opportunity to crack down on tax avoidance by multinational companies by making it part of the Government's EU reform agenda.


In a Commons debate, Labour argued that David Cameron's EU proposals should have included measures such as country-by-country reporting, which would force firms to disclose the sales, profits and taxes paid in each nation where they operate.


John McDonnell, the shadow Chancellor, claimed Google's £130m "sweetheart" deal with HM Revenue and Customs had "driven a coach and horses" through international efforts to ensure that multinationals pay more tax. "The UK is now becoming depicted across Europe as a tax haven," he warned. "It risks establishing a race to the bottom in which every country outbids each other to offer the lowest possible taxation."


But a Labour motion calling for full details of the Google agreement to be published and the swift introduction of country-by-country reporting was defeated by 299 votes to 271, a government majority of 28.


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Google tax deal under fire as it emerges figure included share options scheme

Phillip Inman Economics correspondent, the Guardian 4 February 2016

George Osborne’s claim that the government secured a major corporation tax deal with Google appear to be unravelling after it emerged that a quarter of the £130m recovered by HM Revenue & Customs related to the US company’s share options scheme.

Filings by Google’s UK subsidiary show that £33m of the funds paid to the Treasury followed a wrangle over share options handed to staff, which the US business had argued were exempt from UK tax.

The company’s accounts show that the government was only able to claw back less than £100m in corporation tax from Google for the 2005-2014 period, and not the £130m the chancellor claimed. MPs and foreign governments have criticised the deal for allowing Google to generate billions of pounds in profits from its UK business and pay little corporation tax.

The Treasury select committee said last week that it would examine the deal, while several ministers have conceded that the outcome of the tax dispute was disappointing. John McDonnell, the shadow chancellor, said there was an important distinction between a settlement for unpaid corporation tax based on Google’s profits and the need to pay tax on share options for staff.

He said the low rate of corporation tax paid by Google, which was already “totally unacceptable”, needed to be independently examined. “If true, this is truly shameful behaviour by the chancellor. He dressed this deal up as a ‘major victory’, when in reality it was a defeat,” McDonnell said.

“It adds weight to my calls for why we desperately need the government to publish the detail of their deal with Google. Because having greater transparency of this Tory deal is the only way we can get to the bottom of whether or not taxpayers are getting value for money.

“Sadly, George Osborne refuses to do this and is now hiding himself as well as the true details of this deal from public scrutiny so as to avoid any awkward questions.”

Google settled a long-running tax dispute with HMRC last month following a six-year audit of the company’s UK business. It uses a complex web of subsidiaries that allows the US parent operation to divert profits from Google’s non-US businesses to the low-tax territory of Bermuda.

Critics of the tax settlement have calculated that Google generated sales of £24bn in the UK between 2005 and 2014. It has reported profit margins of between 25% and 30%, giving an estimated profit of about £7.2bn.

As it already agreed to pay about £70m in addition to the £130m settlement, Google’s effective tax rate is between 2% and 3%, compared to the 20% headline rate of corporation tax.

Richard Murphy, a tax expert who advises the Labour leader, Jeremy Corbyn, on economic policy, said most major US corporations had attempted to depress their tax bills by charging subsidiaries the cost of share options to staff, and that all had been ruled out by HMRC.

He said it was unclear why HMRC had failed until now to force Google to comply. “What was already a poor deal for the government is now looking even worse,” Murphy said. “And it looks like HMRC’s mess-up. I would say it clearly shows that HMRC is under-resourced and is struggling to cope in negotiations with major corporations.”

A Google spokesperson said: “After a six-year audit by the tax authority, we are paying the amount of tax that HMRC agrees we should pay. Governments make tax law, the tax authorities enforce the law and Google complies with the law.”

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Labour to force Commons vote on tax avoidance

John McDonnell challenged the Conservatives to take a more open and transparent approach to dealing with the crisis over tax avoidance by large multinationals. in the Chamber on Wednesday.

Following the missed opportunity to use the EU negotiations as a way to get a deal on tax avoidance across Europe, John McDonnell MP, Labour’s Shadow Chancellor, wants the government to release the full details of their deal with Google, and to fully back making publicly available country-by-country-reporting (CBCR).

In an Opposition Day debate in the House of Commons on Wednesday he called on the Chancellor George Osborne to back Labour’s plan and force a vote in Parliament.

Labour’s Shadow Chancellor, John McDonnell MP, said:

“The past fortnight has shown that the Chancellor has missed an opportunity to not only restore public faith in our tax system, but he has also missed a major opportunity to strike a deal across the Europe on tax avoidance.

“The Chancellor could have used these negotiations to get EU wide agreement on making publicly available country-by-country-reporting by big multinationals, so that we get proper transparency of these tax deals.

“The truth is that you cannot trust the Tories when it comes to tax avoidance, because they say one thing in public and another in private. Only at the weekend we found that they were secretly telling their MEPs to oppose tax avoidance measures in Brussels while in Westminster pretending to care.

“Today’s debate offers George Osborne a real chance to stop blocking important reforms so that we can now start to begin to deal with the crisis of tax avoidance and achieve a fairer outcome for taxpayers.”

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How John McDonnell proved his critics wrong - and put Labour back on track

The controversial appointment is paying dividends for Jeremy Corbyn, asserts Liam Young.

From the moment Jeremy Corbyn selected John McDonnell to be his shadow chancellor there have been many rumblings both inside and out of the Parliamentary Labour Party. The press lambasted him as even more left wing than the leader himself. Vocal members of the PLP had called on Jeremy to appoint Angela Eagle to the role so as to balance the shadow cabinet both politically and by gender. However the last week has vindicated Jeremy’s decision. McDonnell has not just outperformed expectations held over him by the naysayers, but he has also begun to establish a vision for a new British economy.

This run of form began on 18 January with the announcement of ‘the new economics tour’. The first talk took place last week alongside Mariana Mazzucato who is a member of McDonnell’s economic advisory board, also made up of heavyweight economists Thomas Piketty and Joseph Stiglitz. Not only did the announcement ensure some good news for Labour’s economic credibility by showing the party backed by respected economists, but it also showed some real direction. McDonnell’s speech at the Co-Operative conference confirmed this sense of direction. In proposing a ‘right to own’ the Shadow Chancellor, all too aware of Labour’s previous failure to form a coherent economic vision, began to stress core components of his new economic approach.

However it is McDonnell’s handling of the on-going Google tax fiasco that has proven his competence for the position not just of shadow Chancellor, but Chancellor of the Exchequer. A the weekend McDonnell published his tax return as he had promised and asked Osborne to do the same. I think it is rather unlikely that the millionaire Tory chancellor will agree to the request, but this only helps strengthen McDonnell’s point that the Tories are detached from the economic reality that the average taxpayer is faced with. Something that also supported this was the widely shared clip of George Osborne giving advice on how to avoid Taxes live on the Daily Politics on 15 May 2003. Dubbing him the ‘Banker’s Chancellor’ McDonnell has capitalised on the Chancellor’s disappearance in recent days. 

On the same day that the Tory bedroom tax was deemed illegal by court judges, the Tories were forced to defend their links with the Google deal. It was later revealed that ministers had been briefing European MEPs to vote so as to protect Google’s tax status in Bermuda. McDonnell put it best when he argued that the Tory mask ‘has finally slipped’. On one hand the Prime Minister was telling the British people that he wished to clamp down on tax avoidance, but on the other he was asking his MEPs to oppose plans that would have seen that happen.

The polls seem to show the British public backing the shadow chancellor on his stance. If Labour is ever to regain trust on the economy then this is exactly what it must do; align itself with public concern about tax evasion and avoidance. McDonnell was right to relate this to the personal. As many people rushed to have their tax returns completed, Google was resting assured of a greatly reduced rate and a government that was going to do nothing about it. McDonnell stated that George Osborne had spent the last week in hiding. The shadow chancellor has been doing the opposite. He has been out in the open, making the argument for a new economy that works in the interest of all. As Osborne hides, his image as the banker’s chancellor is only further entrenched. In his absence, John McDonnell is primed to emerge as the people’s chancellor, on the side of all hard-working individuals fighting for a level playing field on tax.

Liam Young, New Statesman 2nd February 2016

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John McDonnell now making his mark

THE first shadow chancellor of his kind has lately been arguably one of the best performers in UK politics.

Jeremy Corbyn’s detractors both within and outside the Labour Party sought to focus much of their fire on shadow chancellor John McDonnell from the moment the leader appointed McDonnell to the role that is in reality the second most powerful one in ­opposition.

The position of shadow chancellor is also an awkward post to define, partly because there is no constitutional status attached to the role in the way there is for leader of the opposition.

It’s an appointment now made solely at the discretion of the party leader and Corbyn’s choice of McDonnell, seen as one of the most left-wing MPs, rather then going for a more centrist figure like Hilary Benn or even a New Labour-leaning MP such as Rachel Reeves or Chuka Umunna, predictably sparked hostility from much of the Parliamentary Labour Party.

In any meaningful sense the shadow chancellor is next in line to be party leader, holding much more sway than the deputy party leader largely due to the post being so encompassing over economic and spending policy.

John Smith and Gordon Brown for example would both go on to lead Labour after holding the Treasury brief.

Shadow chancellors often try to distance themselves from leaders’ decisions that could be detrimental to their own political ambitions.

Brown comes to mind as a classic study here, particularly after his epic fall-out with Tony Blair over who should stand for party leader following Smith’s death in May 1994.

Such tensions were evocatively portrayed in the acclaimed 1990s play The Absence of War by the left-leaning playwright Sir David Hare, which was to enjoy a long run on stage as well as being scripted for TV.

The original production tells the story of a struggling Labour leader, memorably played by the late John Thaw, fighting a doomed election campaign in the early 1990s – with echoes of Neil Kinnock’s defeat in 1992, while simultaneously facing plotting from a disloyal but intellectually more adroit shadow chancellor.

But McDonnell is the first shadow chancellor of his kind in the way that Corbyn is the first Labour leader of his kind, not just with the avowedly socialist policy platform, but also because he is not driven by career or personal ambition after nearly two decades on the backbenches.

Like Corbyn, McDonnell will know the Labour left now has what may be a one-off chance at disproving the supposed conventional wisdom that the party cannot win from the left.

So to take the title of Hare’s play, there is perhaps rarely in Labour’s history “the absence of war” between the office of the leader of the opposition and that of the shadow chancellor, if not among the party’s MPs. Perhaps this accounts partly for why McDonnell is the “boo boy” of the anti-Corbyn brigade in sections of the media and among those in Labour’s ranks keen to see the leader and his shadow chancellor ousted as soon as possible.

There have been some “own goals” from McDonnell, such as when responding to George Osborne’s autumn statement the shadow chancellor waved a copy in the Commons of the Little Red Book written by the Chinese dictator Mao Tse-tung.

What should have been a story about a Labour triumph after an effective campaign from the party leadership to force Osborne to dump controversial cuts to tax credits instead became one about how a left-wing Labour politician had quoted the writings of a “Stalinist despot”.

As powerful as the shadow chancellor is in the party of opposition, one of McDonnell’s political staffers should have snatched the book when learning of the intended stunt.

But after what was not a fatal mistake, McDonnell has since been arguably one of the best performers in UK politics, taking the fight to the Tories following Osborne’s controversial claim that the UK’s tax deal with Google was a “major success” despite a public backlash against the £130 million agreement for being too lenient.

Such an approach from Labour not only had resonance with most voters, but also allowed McDonnell to portray Osborne as an out-of-touch over-privileged Tory, as the shadow chancellor published his own income tax return online and challenged his opposite number to do likewise.

A bonus from all this was that the issue achieved some long overdue party unity.

True Labour schisms over Trident will not go away, but last week one of those implacably opposed to Corbyn and McDonnell, the Blairite-orientated former cabinet minister Caroline Flint, made an effective intervention in the Commons, taking the same line as the leadership.

It may well be that the likes of Flint will continue to refuse to serve on Corbyn’s front bench, but perhaps the Google example shows how the prospects of using the talents of such figures in Labour’s national campaigns up to and including the next general election is a real one.

Of course in the next few months and years, McDonnell will continue to be characterised by opponents in loaded terms as a “hard left” ideologue, with a poor grasp of the Treasury brief and someone well out of his depth.

But Labour’s leadership and McDonell’s office would do well to be ready to battle hard to prevent the shadow chancellor being saddled with such a perception in the minds of the public – something the Tories and sections of the media will surely attempt.

Pointing out that McDonnell served as Ken Livingstone’s chair of finance on the now defunct Greater London Council in the 1980s and was effectively the chancellor of the UK capital would be a good start. But it’s taking on big corporations over the issue of unpaid tax at a time when the living standards of those on modest incomes are being hit by heavy austerity that may prove a decisive hit with the electorate and could yet see McDonnell become the UK’s chancellor.

Andrew Whitaker, The Scotsman, 2nd February 2016

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The future is here − Labour is inventing the economics of tomorrow

Embracing automation, shortening the working week, collaborating with the private sector and reducing inequality are just some of the ideas being discussed by Shadow Chancellor of the Exchequer John McDonnell.


Beckett’s post-election autopsy pinned defeat, among other reasons, on Miliband’s failure to challenge the myth that Labour caused the 2008 financial crash. Cameron has solidified the narrative in the public’s mind with his repeated attacks on Labour’s financial credibility.  However, by giving left-leaning intellectuals a platform in his series of public talks, John McDonnell is opening up a completely new discourse around economics and it is time to get excited.


Although bound by their anti-austerity and pro-market beliefs, each economist is bringing their own unique specialism to the table.


Mariana Mazzucato began the series last week, arguing for state investment in innovation that made her book, The Entrepreneurial State, such a compelling read. Seeing the state as an impediment to innovation is, in her view, pure ideology, especially when tech giants like Apple relied so heavily on state money to get off the ground. This isn’t an attack on the private sector; Mazzucato believes it should work in harmony with the state. Where risks are high - for example, when investing in climate solutions - state funding must fill in the gaps that the typically cautious private sector leaves behind. Otherwise we’ll never achieve our most pressing collective goals.


In tomorrow’s talk, “Technology and the Future World of Work”, Bria, Srnicek and Susskind will imagine the radical potential of technology, liberating us from what David Graeber calls “bullshit jobs”. Embracing automation and the internet of things (the interconnectivity between the physical and virtual realms) as progress towards a more efficient society will free us from long hours of unrewarding labour.


In March the debate turns to the pressing economics of inequality. Joseph Stiglitz is an unsurprising participant, ever since the crash he’s been one of neoliberalism’s most outspoken critics, and yet this still represents a major coup for McDonnell. No one else in the lecture series, or in Labour’s Economic Advisory Committee for that matter, boasts a CV that includes Nobel Laureate and former chief economist for the World Bank. Where Thomas Piketty, author of Capital, and fellow member of the advisory committee, sees inequality as inherent to capitalism, Stiglitz believes it’s reversible through reform. To him, inequality isn’t just a moral blotch on our culture, it’s also bad news for our collective growth. If Labour used his clout to infuse that idea with some much-needed respectability, voting selfishly could cease to make sense. 


Of all the lectures, the last, “Framing the Economic Narrative”, contains the lesson Labour needs to pay close attention to. Simon Wren-Lewis keenly observes the way economics and politics intersect. He views austerity as a trap for the left “as long as they refuse to challenge it”. The thinking goes: if you accept that cuts should happen, it’s a position of weakness to then argue over who's targeted. Joining him is economic policy advisor, Ann Pettifor, who understands better than most that progressive economic ideas mean nothing without the credible politicians to enforce them.


If Labour is to gain a firm grip on the economy again, this series is a great start.


Callum Towler, The Independent, 2nd February 2016

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John McDonnell MP Tax Return 2015

This is a link to my full tax return, as provided to the Sunday Mirror, with P60 included for additional information.

 Tax return:



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John McDonnell helps launch Newham anti-austerity campaign

The shadow chancellor warned “people are suffering” at the anti-austerity campaign’s inaugural meeting today.

newham.jpgAll have publicly backed Newham United Against Austerity. a co-ordinated challenge opposing austerity measures and further public spending cuts by the Conservative government.

Mr McDonnell said: “Austerity is not an economic necessity, it’s a political choice.

“We can afford these services. We are still the sixth richest country in the world.”

The Labour MP called for the “mobilisation of our communities” to come together in fighting austerity and went on to criticise the current government for bailing out the banks as well as privatising prisons and the education system.

He spoke to an audience of just under 100 people at the Stratford campus of University of East London this afternoon.

Kevin Courtney, deputy general secretary of the national union of teachers, said Newham schools were facing budget cuts of 17 per cent over the next five years and said “we can’t let it happen”.

He said: “We are all in it together and if we are not in it together then we have no chance,” telling audience members that the NUT did not usually work with other organisations but they had been left with no other choice.

Other speakers included Rokhasana Fiaz, Newham councillor for Custom House, who spoke out against the growth of inequality and child poverty, and Yvone Green, Unison’s greater London region officer.

Attendees – including teachers, Labour members, disability and housing campaigners and Newham councillors, were urged to forget their differences and unite together against the cuts.

The meeting was chaired by MP Lyn Brown and launched with the support of Newham Council and Newham Joint Trade Union Committee.

A second campaign meeting has been planned for March 5.

Newham Recorder 30th January 2016

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Walthamstow CLP fundraiser

walthamstow.jpgI received a very warm welcome at Walthamstow CLP’s fundraising curry at Zaiqa Buffet Restaurant last night. I spoke alongside Matt Wrack and Arica Nadeem. Meeting and talking to members gave me a great sense of hope for the work we have to do over the next few years to bring about a Labour government. It was great to see some of my old friends again each of them committed to an anti-austerity movement as the way forward. But what really impressed me was the number of young people who came along and it is their enthusiasm and energy that will take Labour to victory.

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Writing to Margrethe Vestager, the Competition Commissioner for the European Commission today, John McDonnell MP, Labour’s Shadow Chancellor said:


Margarethe Vestager

The Competition Commissioner for the European Commission European Commission

Rue de la Loi / Wetstraat 200

1049 1049 Brussels



27th January 2016


 Dear Ms Vestager,

I am writing to request an investigation by the Commission of the deal reached between HM Revenue and Customs and Google, as confirmed by HM Government last week.

Public concern is focused on the low sum offered by Google in lieu of taxes dating back over a decade, on the potential future damage to UK tax revenues, and on the revenues of our EU partners.

Despite requests, HM Government is refusing to publish details of the deal beyond the headline figure. We believe £130m to be significantly lower than a fair or reasonable assessment of Google’s UK turnover and profits would suggest, with experts suggesting that Google has been levied an effective tax rate of around 3%.

I am therefore requesting an investigation under EU competition law, since we are concerned that, first, the deal is arguably not compliant with State Aid rules, creating a favourable treatment for a particular company; second, that if the deal is generalised, it could constitute a serious potential threat to the ability of other EU members to levy taxes in their jurisdiction.

There is a strong public interest case in establishing the facts of the deal. I look forward to your response.



Yours sincerely



John McDonnell

Shadow Chancellor of the Exchequer

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“The New Economics Series” was launched with a lecture from Mariana Mazzucato


The Shadow Chancellor, John McDonnell introduced a lecture delivered by Mariana Mazzucato, RM Phillips Professor in the Economics of Innovation, on “Economic Policy: from market fixing to market creating and shaping” to a packed audience at The Royal Institution last night. Mariana followed her lecture with an extensive question and answer session.

This lecture was part of a series of public events to broaden the debate around economics in Britain. John said “I am delighted to have some of the brightest minds in economics sharing their thoughts about how we can build an economy fit for the future.”

“On the most pressing issues of the day – for example, how to tackle inequality, the role of innovation and the future of the workplace – Labour will be listening to what is being said while we put together our own proposals.

“These meetings are an important first step on the path to reshaping the economic debate in the country, and getting away from it being a Westminster dominated view of economics.”

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Google's 'effective tax rate is now around three per cent despite estimated revenues of £1billion in 2014 alone'.

Below is a copy of the letter I have written to George Osborne asking if he will now directly address some of the outstanding questions. 

Dear George, 

Since news of the tax deal between HM Revenue and Customs and Google broke on 22 January there has been much comment and discussion about the rights and wrongs of this case specifically, as well as the general principle of large companies being able to negotiate settlements such as this with the UK’s tax authorities. 

It is notable that while you have hailed the deal as “a major success”, Downing Street has instead chosen to describe it as “a step forward” with “more to do”. When there appears to be disagreement about the significance of the deal at the highest levels of government it is only right that the public is given greater clarity on the specifics of the settlement reached. 

This deal with Google raises a number of important issues about the tax treatment of large companies in the UK. For that reason I welcomed the opportunity the House of Commons was yesterday given to discuss the details of this case. However, it was disappointing that you were not present to address this issue in person. 

Yesterday’s statement in the House by the Financial Secretary to the Treasury, Mr David Gauke, left many questions unanswered. For that reason I am writing to ask if you will now directly address some of the outstanding questions: 

  • Firstly, please can you clarify exactly when you were first made aware of the details of the deal with Google? Did you (or any other Treasury Minister) personally sign it off, and were other Ministers involved in the settlement?

  • What discussions, if any, did you or members of your private office have with HMRC and with Google representatives about the deal?

  • Did HM Treasury and HMRC discuss details of the deal with Number 10 before the announcement was made?

  • What is HMRC’s understanding of the effective tax rate faced by Google over the past 10 years as a result of this settlement?

  • Are you confident that this deal will not undermine international co-operation on tax avoidance, such as the OECD base erosion and profit shifting scheme?

  • Can you clarify whether Google is changing the company structures that enabled this avoidance to take place over the past decade?

  • What concerns, if any, do you have that this agreement creates a precedent for future deals with other large technology corporations?

  • To help ensure HMRC is best placed to address complex issues like this will you now halt the programme of HMRC staffing cuts? 

I was also concerned to read in The Times this morning the revelation that HMRC officials have “never challenged” Google’s claim that it has “no permanent establishment” in the UK. Such a claim is obviously critical to the entire tax issue. Can you clarify whether the accusation in today’s Times is accurate? In addition, have you, or your office, ever raised with Google directly its claim that it does not have a permanent establishment in the UK? Furthermore, have you, or your office, ever discussed with HMRC, Google’s claim not to have a permanent establishment in the UK? 

When times are tough it is more important than ever that everyone pays – and is seen to pay – their fair share. I know that many are concerned about the tax treatment of large companies and it is important for public trust that HMRC is fair and transparent in its dealings with such companies. That is why, in the interests of openness and transparency, it is essential you provide full and frank answers to the above questions as well as commit to publishing details of the deal and how it was reached. 

Given the significant public interest in this matter, I am making this letter public. 

Yours sincerely


John McDonnell MP

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Labour's McDonnell considers giving workers right to buy firms

Labour government could give employees the right to take over their companies if they are sold, dissolved or floated on the stock market.

Shadow Chancellor John McDonnell says the party does not want to return to an era of widespread state ownership.

Instead, Labour would look to expand co-operatives and explore giving workers the "right to own".

David Cameron has accused Labour of wanting to turn back the clock to the days of state ownership and strikes.

But Mr McDonnell tackled this claim head-on in a speech in Manchester, saying Labour had to move on from its traditional belief that state ownership was always the answer.

"Whatever the achievements of the past, we cannot simply turn the clock back - whether to 1997, 1964, or 1945," he said.

At the last election, "the Tories talked relentlessly, overwhelmingly about the future. Labour, strikingly, did not".

"We cannot allow that to happen again. We cannot be small 'c' conservatives."

He added: "A future Labour government will end the current programme of spending cuts. We will protect what has already been won.

"But we must look beyond this point. We should be seizing the opportunity to create a fairer, more democratic society."

Labour has already announced its intention to return the railways to public ownership.

But when it comes to the wider economy, Mr McDonnell said Labour should "look elsewhere" for solutions, and draw on its tradition of supporting workers' co-operatives.

He signalled support for giving employees in companies which are about to be sold off - or floated on the stock exchange - the first option to purchase the company.

'Positive alternative'

"The Tories have offered a Right to Buy, Labour would seek to better this. We'd be creating a new Right to Own," he said in a speech in Manchester.

He said the "biggest hurdle" facing co-ops and other small businesses was getting initial funding from high street banks.

"No other major developed economy has just five banks providing 80% of loans. We'd look to break up these monopolies, introducing real competition and choice.

"Regional and local banks, prudently run and with a public service mandate, have to be part of the solution here."

Mr McDonnell is also considering adopting the Italian government's policy of offering funding to help employee-owned enterprises to get off the ground.

"With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we'd look to support these at a local level, working with local authorities, businesses and trade unions," he said.

'Terrible downsides'

He said the policy would be developed "over the next few years", adding: "In an uncertain world where a laissez faire market approach continues to fail, co-operation is an idea whose time has come again.

"This is the start of developing a new, positive economic alternative for Labour."

He also urged Labour to embrace opportunities offered by the internet and new technology.

"Technology is proving disruptive. It can have terrible downsides - de-skilling and an accelerated concentration of wealth.

"But it also opens up new possibilities - the explosion of sharing that the Internet can provide.

"There is an entrepreneurial spirit at work here: not the theatrical meanness and one-upmanship of Gordon Gekko, but a desire to create something better for us all."

Chief Secretary to the Treasury Greg Hands said Labour represented "a threat to our economic security".

He added: "Now we know the truth: Labour is planning another debt-fuelled spending spree and a huge tax bombshell on the businesses that have helped to drive Britain's recovery from the economic mess they left behind."

BBC News 21 January 2016

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George Osborne has proved today what we all suspected, that he’s really just the Bankers’ Chancellor - John McDonnell

John McDonnell MP, Labour’s Shadow Chancellor, speaking after Treasury Questions, said:

“Only eight weeks ago the George Osborne promised an “economic recovery for all, felt in all parts of our nation”, but on the day that the IMF has echoed Labour’s warnings about the global economy and called for the government to increase investment spending, the Chancellor decides to demean his office with school boy jokes about mental health.

“If the Chancellor could at least appreciate how angry families of steelworkers in south Wales are, knowing that when bankers’ bonuses were threatened, he immediately shot across to Brussels with an army of lawyers to defend them, and he’ll jump into a helicopter for a Tory fundraiser, but it’s taken him four months to lift a finger for steelworkers’ jobs.

"The truth is that we have a Chancellor who has woken up late to the crisis in the steel industry, tax credit cuts, police cuts, and the problems in the global economy. But when it came to the banks he was wide awake to all their concerns.

“George Osborne has proved today at Treasury Questions, what we all suspected, that he’s really just the Bankers’ Chancellor.

19th January 2016 labour press team

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Labour to hold free seminars on public finances to end Westminster orthodoxy

The Shadow Chancellor, John McDonnell MP, has announced this morning he is convening a series of public events to broaden the debate around economics in Britain.

A range of experts will present their views at a number of events across the country, with questions from members of the public.

The aim of these meetings will be to shape the debate around the economy of the future

‘The New Economics’ events will be open to the public and will feature members of Labour’s Economic Advisory Council, including Nobel Prize winner Joseph Stiglitz and Mariana Mazzucato; and other leading economists such as Ha-Joon Chang.

Other events will include public seminars, bringing together experts to discuss the most important topics in economics, ahead of a national conference in May. Topics will include “Innovation and the Strategic State”, “Inequality” and “Technology and the future world of work”.

Events will take place in London and across the country and will be open to the public to attend for free by booking through the website.

The first event is to take place on Tuesday 26th January from 18.30-20.30 at the Royal Institute.


Article in Today’s Guardian:

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George Osborne’s ‘cocktail of threats’ will leave us with a hangover

The chancellor promised 2015 would be the year government borrowing would hit zero, but we’re facing a noxious economic brew of his own making

George Osborne yesterday warned us about a “cocktail of threats” brewing in the world economy. All the ingredients are there for a noxious brew. The emerging markets debt bubble. The ongoing stock market turmoil in China. Recession in Brazil and Russia, and the slowdown in India. The collapse in global commodity prices.

I’ve warned about the danger signs elsewhere before. But curiously, Osborne didn’t talk up these “threats” in last year’s autumn statement. He didn’t raise them at the summer budget. They were hardly a centrepiece of his election campaign.

Quite the opposite. He’s spent a fair few years now talking up how clever he has been, and how good everything is going to be. This was a result of his “long-term economic plan”. But there’s never been a “long-term economic plan”. Just the short-term politics of austerity. The result is Osborne serving up a rather unpleasant domestic cocktail of his own making.

The chancellor claims Britain is “living within its means”, but our borrowing from the rest of the world rose to record levels. We have to borrow because we buy far more from the rest of the world than the rest of the world buys from us. And because we’ve borrowed so much money, and sold off so many assets, the payments due to the rest of the world are astronomical. We are borrowing more from abroad than any other developed economy.

If Osborne’s “march of the makers” had ever got out of the parade ground, this deficit with the rest of the world – our “current account” deficit – might have been shrunk. Instead, manufacturing exports have slumped and manufacturing output is decreasing, with manufacturing output still below its level of seven years ago, before the crash.

Far from “rebalancing” the economy, Britain has become more dependent on services, and we’ve shrunk manufacturing, which is the bedrock of any modern economy. And while employment in London is up nearly 12% since 2010, it’s up just 0.3% across the rest of the country. Even then, far too many new jobs are poorly paid and insecure, with pay still down on 2008.

I doubt even Osborne believes his own stories any more. That’s why he’s getting his excuses in first

The increase in poorly paid, insecure jobs means British households can’t “live within their means” either. After years of paying back their debts, households are being forced to borrow once more. Unsecured borrowing, covering credit cards, store cards and (alarmingly) payday lending is now rising at the fastest rate since before the crash.

The centrepiece of Osborne’s much-hyped “plan” is his effort to bring down the government’s own borrowing, while hoping he can increase household debts. And with tremors in China, it’s Britain that, thanks to its overstretched banks, has the largest single exposure to Chinese debt of any major western economy.

When Osborne first arrived in office, he promised us that 2015 was the year that government borrowing would hit zero. The figures, out just before Christmas, speak for themselves. Not only is government borrowing running at £67bn for the financial year to date, borrowing in November alone was the largest since 2013. Osborne has spectacularly failed to meet his own targets.

In addition, he’s letting the financiers off the hook with a return to a soft-touch approach to bank regulations. Last summer, he kicked out the head of the watchdog he set up, the Financial Conduct Authority, which is charged with keeping bankers in line, for being a little too good at his job; meanwhile he stayed silent as the FCA watered down its vital inquiry into banking culture. And on top of all this he’s also slashed taxes for mega-banks, despite recent revelations showing some banks are not paying any tax.

As a result, it’ll hardly be surprising if the bankers are getting back to their old tricks.

I doubt even Osborne believes his own stories any more. That’s why he’s getting his excuses in first. His austerity programme is leaving our economy more unbalanced, with rising debts, and overexposed to risks elsewhere in the world. But, incredibly, he wants more of the same failure – more austerity. Instead, we need real investment in science, skills, and infrastructure, made for the long term across the whole country, not excuses and spin. Without this, George Osborne offers warnings but no solutions to a domestic cocktail that he made that will leave the rest of us with the hangover.

The Guardian Comment is Free Friday 8th January.

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John McDonnell MP shows support for housing and homelessness advice in Hayes and Harlington

John McDonnell MP showed his support for people fighting bad housing and homelessness in Hayes & Harlington recently, when he attended the launch of Shelter’s new campaign to raise awareness of its vital advice and support services. 

John attended the event on Tuesday 5th January where he met with Shelter’s Director of Services Alison Mohammed to discuss the frontline services Shelter delivers in Hayes & Harlington, and across the UK. These include the 531 cases that Shelter dealt with in the Hillingdon area last year alone. 

Prompted by a new Shelter and YouGov survey, the event highlighted the strain families face in London in January, with 1 in 10 rent or mortgage payers fearing they will be unable to meet their housing costs this month.  

At the same time 21% of people in London are cutting back on winter fuel and clothing to meet their housing payments – the equivalent of 1.4 million people. 

John and Shelter are urging anyone who is struggling with their housing costs to seek advice, before problems spiral out of control. Shelter, the leading housing and homelessness charity, helps over 4 million people a year with free, practical housing advice, through its online support, face to face and national helpline services. 

Shelter’s Director of Services Alison Mohammed said: “Every day at Shelter we hear from families who face the bleak choice between missing their rent or cutting back on heating. Or from parents whose children have stopped asking for treats because they know they’re struggling just to keep a roof over their heads. 

“No-one should have to face these problems alone, which is why Shelter is here 365 days a year. Getting advice early can make all the difference, and we’re only ever a click or a call away at or on 0808 800 4444.”

John McDonnell MP said: “Shelter’s frontline services provide invaluable assistance to many of Hayes & Harlington residents, particularly at what can be an extremely tough time of year. They can often be the difference between a family staying in their home or becoming homeless.  

“I know from my regular surgeries that it is absolutely critical people who are struggling to stay in their homes seek help at the earliest opportunity. I would urge anyone who is having difficulty making their rent or mortgage payments to contact Shelter, or myself, as soon as they can.  

“With so many parents in the U.K cutting back on winter essentials to pay their rent or mortgage, it is important that people in Hayes & Harlington are aware of the support that is available to them.”

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Shadow chancellor criticises George Osborne's relationship with top bankers

Labour’s John McDonnell said the chancellor is offering the financial industry an ‘ever more soft touch’ through various regulatory concessions

Shadow chancellor John McDonnell has accused George Osborne of being too close to Britain’s top bankers, offering the industry “an ever more soft touch” through a series of regulatory concessions that have emerged in recent weeks.

Over the weekend it was reported by Reuters that two more investment banks with major operations in the City – Citigroup and Credit Suisse – had paid no tax for 2014 in the UK.

It follows Reuters analysis last month that showed a further seven banks had paid a combined £21m in UK corporation tax in 2014 despite generating UK profits of £3.6bn.

“These are damning findings that make a real mockery of the government’s approach to taxation of the financial sector,” said McDonnell. “This news will also be completely disheartening to the millions of us UK taxpayers who bailed out the banks and continue to pay the price for their past actions and excesses.”

Last week, McDonnell had again attacked Osborne after City regulator the Financial Conduct Authority (FCA) dropped a long-awaited review of banking culture which had been promised in the wake of multiple scandals. The decision to abandon the review followed the resignation of the FCA chief executive, Martin Wheatley, after the chancellor had forced him out in July.

The Treasury has insisted it had no hand in the regulator’s decision, but McDonnell renewed his criticism.

“The chancellor has been moving towards an ever more soft touch approach by reducing the bank levy and cutting corporation tax, selling publicly owned banks off at a loss, and only last week he sat by while the watchdog he set up watered down its review into the sector, only six months after he replaced the head of the FCA for issuing large fines to banks.”

The Guardian Sunday 3 January 2016

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Shadow chancellor calls on George Osborne to tell financial watchdog to restart review or risk sending wrong message at wrong time

FCA.jpg.pngJohn McDonnell, the shadow chancellor, has urged George Osborne to relaunch a review into banking culture after the City regulator ditched it.

McDonnell called on the chancellor to exert his influence to restart the study, which the Financial Conduct Authority dropped just months after launching it.

This will be a huge blow to customers and taxpayers who are all still paying the price for the failed culture in the banking sector that’s been widely attributed to be among the main causes of the crash and the scandals over Libor and price-fixing,” McDonnell said, adding that the FCA was making a “dangerous and costly mistake”.

“The chancellor therefore cannot stay silent on this issue. It’s time he used his influence to keep this review going. Otherwise he’s letting down the rest of us who bailed the banks out and also allowing a signal to be sent to carry on regardless. Given the scale and severity of the failings in the financial sector and the criminal behaviour shown by some banks, the scrapping of the FCA’s review into banking culture sends the wrong message at the wrong time,” he said.

The review was included in the FCA’s business plan for 2015, but was dropped after an initial assessment found it difficult to compare different cultures inside banks. The decision to abandon the review follows the resignation of the FCA chief executive, Martin Wheatley, after the chancellor forced him out in July. A permanent replacement has not been named to take over from Wheatley, who had flagged his tough stance towards the industry by warning he would shoot first and ask questions later.

The Labour MP John Mann, who sits on the Treasury select committee, tweeted “Osborne has used void from no ceo in post after he sacked Wheatley to dismember critical FCA enquiry into bank culture” He added: “FCA surrender to big banks today is entirely from pressure from Treasury and Osborne.”

Mark Garnier, a Conservative MP on the committee, told BBC Radio 4’s Today programme: “There has always been this great argument that perhaps the Treasury is having more influence over the regulator than perhaps it ought to and certainly, if I was looking for a Machiavellian plot behind what’s happened here and the tone of the regulator, then I suppose I would start looking at the Treasury.”

The Guardian 31 December 2015 Jill Treanor

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John McDonnell calls for cross party agreement on flood defence funding

John McDonnell MP, Labour’s Shadow Chancellor, responding to the flooding across many parts of the country is calling for cross party agreement on flood defence funding.

John McDonnell MP, Labour’s Shadow Chancellor, said:

“It is truly terrible what many are suffering at this time of year, despite the excellent work of the emergency services. It is in this light that as politicians we must not just sit idly by watching these awful scenes on TV, but come together to act.

"While we must take the measures needed to reduce the threat of climate change, we also need a cross party approach to securing a long term stable plan for investment in a programme that enables us to adapt to climate change.

"We have to recognise the potential scale of expenditure and stability of investment planning that is required. Our country cannot afford for the government to not invest when the sun is shining; which is what we have seen with the current stop start approach to investment in this field in recent years.

"I am willing to sit down with the Chancellor to seek a cross party consensus on identifying the resources we need for this programme so that any investment programme remains secure beyond the life of one Parliament.

"We also need to look again at the contribution the insurance sector could make to this investment programme.”

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Labour's New Economics Means a Strategic Approach for the Renewables Industry

solar_panells.jpgThe decision by this Government to cut subsidies for Britain's flourishing renewables industry was one of its stranger decisions. So much for George Osborne's "long-term economic plan". A promising new industry has been torn apart, with 5,000 job losses already, five firms closed down - and 27,000 jobs threatened.

Environmentalists and business groups are on the same side in condemning the move. New, young industries need help to establish themselves and stand on their own two feet. Instead, this government has kicked away the support - and made tackling climate change all the harder.

The sheer short-sightedness of the subsidy cut was made clear today when I visited Banister House with Lisa Nandy, our shadow secretary of state for energy and climate change. It's the first community-owned rooftop solar energy project in Hackney, and the largest in London.

With the help of Repowering London, they have installed over 400 solar panels on the roof of 14 housing blocks on the estate, after raising £150,000 via a community share offer. The impressive solar array is expected to save approximately 679 tonnes of carbon dioxide over the next twenty years by replacing electricity that would otherwise be generated by coal and gas power stations.

The project has provided skilled jobs to those who installed the solar panels, and they continue to take on young apprentices.

However, because of the government's cuts to "feed-in-tariff" (FIT) subsidies, energy projects like Banister House are under threat. The swingeing 87% cut to funding the FIT scheme is decimating our rooftop solar industry. The government's own estimates suggest that future installations will fall by over 90%. That's one million fewer solar schemes being installed by 2020.

Slashing the FIT scheme now means it will well over a decade for most household solar panels to pay for themselves. In practice, that means most families, schools, council tenants and community groups will be forced out of the solar revolution. We'll be trailing behind the rest of the world, and needlessly threatening jobs that will be vital in the low-carbon economy of the future.

It's hard to fathom the logic here. David Cameron had some fine words in Paris about tackling climate change. George Osborne has pledged support for new industries. It's a false economy to make cuts now that will cost us so dearly in the future.

Businesses in their infancy and operating in high-potential areas should be the priority. If we don't support them we'll be losing out on what Barclays has called a $30trillion global investment blitz from fast-growing green industries. We should be shaping the economy of the future - thinking about where the opportunities are, and taking on the challenge of climate change.

Successful economies today have governments prepared to take a strategic approach to how development takes place. The old idea that simply exposing new industries to the full blast of competition will promote their development is increasingly discredited. Economists from Dani Rodrik to Ha Joon Chang to Marianna Mazzucato have shown how intelligent support by Government can nurture new technologies and create the space in which new industries can flourish.

But the Tories are stuck in the past, and ducking the challenge. In November, the UK became the only G7 country to increase fossil fuel subsidies. We are paying out £6billion a year, almost twice the financial support we provide renewable energy providers - which we are now continuing to cut.

After the deal struck in Paris over the weekend, the shift to a low-carbon economy is inevitable. The government should be supporting this transition, not hampering it.

Huffington Post 16th December 2015

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John McDonnell Interview for Holyrood Magazine 14th December 2015

john_green_chair.jpgHe laughs heartily when I tell him I was shocked by these latest revelations. After all, this comes on top of the same newspaper headlining one article on the Monday after Jeremy Corbyn appointed McDonnell to his shadow cabinet with ‘Corbyn has just appointed a nutjob as shadow chancellor’, albeit the paper did later apologise and changed the header online to ‘man from cloud cuckoo land’. 

The media in general has taken agin McDonnell. It has described him variously as one of the ‘loony left’ and as ‘the most controversial figure in the Labour Party’ after claims emerged suggesting that he had been an IRA sympathiser and had threatened to kill Margaret Thatcher.

He was already being painted as one of the most divisive characters in Corbyn’s shadow cabinet – there were predictions of all-out civil war over his appointment – and this even before he said he would “swim through vomit” to vote against the Conservative’s Welfare Bill and had thrown a copy of Mao Tse-tung’s ‘Little Red Book’ across the Commons in his idiosyncratic reply to George Osborne’s Autumn Statement.

When I interviewed McDonnell nine years ago, during his abortive attempt to push Brown into a leadership contest and out from a simple coronation to be the next leader of the Labour Party, he had struck me then as a man of great integrity. Yes, he was opposed to New Labour spin and remained steadfastly true to his socialist beliefs. But he seemed far removed from the left-wing firebrand that the red-tops tried to portray.

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royal_mail.jpgJohn McDonnell MP has visited Royal Mail’s Hayes Delivery Office to pass on Christmas wishes and encouragement to postmen and women at their busiest time of year.

Mr McDonnell was shown around the office by Delivery Office Manager, Alison Ray, and was introduced to the postmen and women who are working hard sorting and delivering mail in the Hayes area during the Festive season.

Mr McDonnell, said: “There is a huge amount of effort and dedication that goes into delivering a first class Christmas at Royal Mail’s busiest time of year. It was great to meet the team here at Hayes.

“Our postal workers do such an important job at this time of year and I would like to thank them for their efforts and wish them all the best over the busy festive period.”

Alison Ray, Royal Mail Delivery Office Manager at Hayes, commented: “Our postmen and women are working extremely hard to deliver Christmas cards, letters and parcels to people across Hayes. We are grateful that Johnvisited the office to see our operation and to support the team.

We’d like to remind our customers to post early so that friends and family have longer to enjoy their Christmas greetings. We would also like to ask everyone to please always use the postcode as this helps us greatly in the job that we do at this busy time.”

The last recommend posting dates for Christmas are:

Second Class – Saturday 19 December 2015

First Class – Monday 21 December 2015

Special Delivery – Wednesday 23 December 2015 

Customers can also help Royal Mail ensure that all their letters, cards and parcels are delivered as quickly and efficiently as possible by taking a few easy steps:

  • Post early – Avoid disappointment by posting your cards and parcels early. 
  • Use a postcode – A clearly addressed card or parcel, with a postcode, and return address on the back of the envelope, will ensure quick and efficient delivery.
  • Use Special Delivery – For valuable and important packages and parcels guarantee delivery with Royal Mail’s Special Delivery, which means your gift is tracked, traced and insured against loss.
  • Wrap parcels well and always give a return address
  • For more information about Royal Mail’s last recommended posting dates, please visit: or call 03457 740 740.
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John McDonnell says Labour can be the most powerful force for progressive change in generations

john_and_jeremy.jpgIt was inevitable and understandable that the election of Jeremy Corbyn would be a massive culture shock for some sections of the party, especially some members of the parliamentary Labour party.

For the first time a leader had been elected directly, by party members and supporters, who was not part of a small circle of Labour’s frontbench.

The new leader was also elected with an overwhelming mandate on a political programme that seeks to take the party in a direction that reflects the current views of party members. This platform explicitly seeks to transform the party from the traditional centralised party into something more akin to a mass social movement, responding to the rising demand for greater activist engagement.

People who were comfortable with the old ways of working in the party saw everything they thought permanent suddenly at risk of change, not sure what was to replace the old methods. A venture and career path they had given their lives over to they saw being placed in jeopardy.

Of course, people get anxious in these situations and can feel threatened. Who wouldn’t? Nevertheless the majorities in every section of the party, including the parliamentary party, are embracing this new energetic movement to update our party for the new century.

People realise that if Labour is to fulfil its founding goal of transforming our economic and political system into a more equal, free and truly democratic society, which provides security and life-changing opportunities to the British people, then there is no going back.

Interestingly, more often than not it is Labour MPs who are emphasising that our members don’t want simply to be cogs in an electoral machine, delivering the leaflets and knocking on the doors, yet without being the effective determiners of the direction of the party.

The challenge we all face in the party is how we move from the politics and organisational form of the old party ways to the new politics and keep everyone together. Of course, it’s tough. Some are worried about a degeneration into the old-style politics where disagreement is not tolerated, and the old-style, heavy-handed discipline, with threats of expulsion or deselection, being reeled out.

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New Statesman article 4th December 2015

John McDonnell on Labour’s new politics: “It’s a story we can all be part of”

This is going to be one of the most significant periods for politics this country has seen for a century, writes the shadow chancellor.

Just five months ago, Jeremy Corbyn, Michael Meacher and a couple of other “left” MPs were sitting in a room discussing the pressure we were under to put up a candidate for the Labour Party leadership election. After much debate, all eyes turned to Jeremy and we said to him, “It’s your turn.”

To begin with, he didn’t want to do it. He wasn’t keen, but he eventually agreed. “All right, if you believe I can do it,” he said.

That’s the sort of leader I want – someone with a sense of duty to the people they serve and who will do what needs to be done for the greater good of all.

What the establishment don’t understand is that we have a different concept of leadership from anything seen before. We come together as a collective, as a community, as a class, and that’s the way we make decisions. True leaders don’t make decisions in isolation; they follow and listen to the collective call and the community.

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John McDonnell’s Speech to the London Chamber of Commerce 2nd December 2015

lcc.jpgI’d like to start by thanking the London Chambers of Commerce for giving me this opportunity to lay out what Labour’s new approach means for business. Jeremy was elected, back in the summer, he promised a new politics. I’ve spoken in the past few weeks about how this relates to a new economics. 

Today, I want to begin to lay out what the new economics means for businesses, and how Labour’s approach will be a break with the kind of mistakes made in the past. That means a new relationship between business and government. Not one of antagonism. But recognising how together we can generate and share prosperity, with proper support where it is needed. It means identifying the challenges and opportunities the rapid technological change presents us with. It means recognising real wealth creation, and developing long-term investment for the future.And for London, it means building on an extraordinary economic record, but recognising the many problems the capital faces. 

The backdrop to my speech here today is an economy that is finally growing again after the slowest recovery on record, but where the headline figures hid deep underlying problems. The productivity gap between us and the G7 is at its largest since 1991, and last week’s Office for Budget Responsibility report downgraded their forecasts for productivity growth for the rest of the Parliament. Our current account deficit has reached record highs. We’re not properly paying our way, becoming far too dependent on short-term borrowing from the rest of the world.  And with interest rates glued to the floor, the pace of household borrowing is picking up rapidly. So rapidly that the Financial Policy Committee is considering activating the countercyclical buffer, and warning about future shocks. 

London is an exceptional, world-class city. It’s an extraordinary centre for creativity and entrepreneurship. A new business in London is created every 6 minutes.But keeping London, and London’s businesses at the cutting-edge means recognising where we’re not doing enough. And that means changing what government is doing. 

Short-term vs. long-term 

It’s not good enough that 36% of London’s businesses report being affected by slow internet speeds in the last year. London ranks 26th out of the 33 European capitals for broadband speed. Average connection speeds in Bucharest are nearly four times faster than here. 

Meanwhile, as so-called “superfast” broadband trickles out, countries like South Korea are investing in ultra-fast broadband, with connections of 1,000 megabits per second compared to the 25 megabits speed typical today. It’s no good patting ourselves on the back about London’s great historic legacies, and its status as a cosmopolitan world city, whilst failing to build on either. And it’s no good the government talking up improvements in connectivity when too many businesses face a reality of delays, difficulties, and poor service.

More needs to be done to support the digital economy. We would support the London Chamber of Commerce’s calls for the creation of a London business panel focused on raising awareness of the benefits of online trading to sole traders and small businesses. 

Building on London’s success means ensuring the whole country shares in the prosperity. The better our regions and nations outside the capital do, the better we all do. We want London businesses to also share in the potential of the rest of the country. That means delivering investment here and across the UK. We want to keep this city and country at the cutting edge, helping build the high tech, high wage economy of the future.

That also means solving London’s housing crisis. London rental prices are the highest in Europe. The biggest single constrain on London businesses right now is that the people they want to employ can’t afford to live here. That’s bad for them, bad for business, bad for all of us. 

Labour is committed in government to providing at least 200,000 new homes a year, and would allow local councils additional powers to tax empty properties, bringing them properly into use. My colleague Sadiq Khan, if elected Mayor, would like to see public land held by bodies like Transport for London used for more housing. 

The Spending Review

All of this together is why Labour has decisively rejected the Chancellor’s austerity policies. Not a single credible economist can be found to support his fiscal surplus rule. By restricting day-to-day and capital spending, it places a straitjacket on vital government investment. There is no credible economic case of austerity and there never has been. We think the tide is turning on this question as the real impacts of extraordinary spending cuts become clear. 

George Osborne was pushed into a u-turn on the tax credit reductions that would have seen 3m families lose £1,300 a year. It was under pressure from Labour and others that he reversed. However, the pain has been delayed, rather than postponed. As the Institute of Fiscal Studies analysis shows, Cuts to Universal Credits will see a similar number of families lose a similar amount, but pushed somewhat into the future. Labour will continue to campaign for a fair deal here.  

The reality of his delayed cuts to tax credits is that 2.6 million working families will be £1,600 worse off, as the independent IFS has set out. This is taking £4.1bn of spending power out of the economy. Labour has offered George Osborne a way for him to reverse his own cuts - by targeting a lower surplus and reversing his giveaways to the wealthy, but we’ve yet to receive an answer.

Other cuts will continue, even if at a reduced pace. Local authorities face an extraordinary 79% decline in their budget, should Osborne carry out his plan.And Osborne is continuing the extraordinary pace of asset sales, with air traffic control, the Land Registry and the Ordnance Survey all scheduled to be sold. But Osborne has to complete the sales to meet, as the Office for Budget Responsibility say, his own debt reduction target. Without the asset sales, he misses his own, economically worthless, target. This isn’t a long-term economic plan. It’s a series of short-term political manoeuvres.  

In place of austerity, Labour will seek to balance spending on the government’s day-to-day at a pace compatible with fair and sustainable growth, whilst making sure government can still use its full powers to invest in vital infrastructure, science, and skills. We are committed to raising the level of infrastructure spending to at least the minimum the OECD thinks applies in a developed economy, of 3.5% of GDP.  

At present, despite many fine words in the Autumn Statement, government infrastructure spending is scheduled to fall to well below half that figure over the next few years. It’s no use increasing capital spending in the Department for Transport, whilst cutting day-to-day spending a colossal 37%. We’ll be building new roads – but how will pay to repair them?  

This isn’t good enough. And whilst we welcome the government’s commitment to protect day-to-day science spending in real terms, we should, like the US, China, Germany and France, be looking to increase what we spend on research and development.  That’s how we can start to make the most of the opportunities that technological change is bringing.

The government spends less than 0.5% of GDP on research and development. We will look to lift that level, aiming to deliver research and development spending, from all sources, of 3% of GDP over the course of the next two Parliaments.  

And subsidies for solar energy have been slashed, tearing apart what was a British business success story. Businesses in their infancy and operating in high-potential areas need support. We’ll be losing out on what Barclays has called a $30trillion global investment blitz from fast-growing green industries. 

It’s the short-term thinking that leads to the closure of the successful Business Growth Service – not announced in the Spending Review itself, but only made public nearly a week later. The Business Growth Service had helped over 18,000 businesses meet their potential, raising £100m in funding for small businesses. It’s been sacrificed on the altar of austerity. 

Short-term vs long-term 

There’s a deeper failing here. We’ve had decades now where successive governments have focused on the short-term. It’s why we don’t invest properly in infrastructure. It’s why skills budgets are cut and the training we provide not adequate. 

Independent polling shows that among the main barriers to London’s global competitiveness is its lack of affordable housing and its lack of skilled workers. The future prosperity of our nation’s economy is dependent on strategic investment today.  A future which is being gambled by this Government. We know that is our access to EU labour markets, our digital connectivity and our infrastructure which are the most important factors in attracting businesses ventures to London yet too often we are failing to incentivise that investment.    

We have major institutions, like the Treasury, that seem far too concerned about short-term penny-pinching at the expense of long-term investment. I’m pleased that Lord Kerslake is now leading a review of the Treasury, launched yesterday, and looking to see how it can function in the best interests of the whole economy.But we need a break with the past if we’re to meet the challenges of the future. This short-term way of thinking, sometimes called neoliberalism, has had its day. 

Short-termism means all of us lose out. It means skills shortages. It means poor infrastructure. It means failing to invest in science and technology.It means a seriously unbalanced economy, both domestically and in our relations with the rest of the world. Our current account deficit, and the dependency it creates on short-term financing with all the risks this entails, should be treated as a particularly concern. Above all, it means failing to reach this country’s potential. 

We need institutions and a government that stand on the side of our real wealth creators. The business that create decent jobs, that pay their taxes, and that bring a social value to their communities. The innovators and entrepreneurs who create new wealth. And those who work, whether for themselves or as employees, providing the goods and services. 

Fair financing 

But we are all being poorly served by the institutions we have. Our current financial system is plainly not fit for this purpose. 2008 should have been a wake-up call. Instead, we’ve allowed it to settle back into a rut. Reforms have not gone far enough.

This means businesses lose out. Less than half of small traders were approved for bank credit over this financial year. Lending to small businesses has fallen and fallen again, year after year. Even with a recent improvement, lending is down £49bn on 2008 levels.  

It’s no good expecting our high-street banks to provide. Despite recovery in some parts of the economy, the Funding for Lending scheme is having to be extended in an effort to get our banks to try and lend to small businesses. For small businesses, “too big to fail” shouldn’t also mean “too big to lend”. Nothing substantive has changed. The same failed institutions we had before the crash are all set to fail again. 

Labour will take a different approach. No other major developed economy has just five high street banks providing over 80% of all loans. A more diverse market for finance will be a more resilient financial market. We think that regional and local banks, properly managed with a public service mandate, are part of the answer for small businesses. 

We want banks that know their customers and understand the needs of their local businesses. Germany’s network of highly successful “Sparkassen”, publicly-owned local banks in tune with their communities, provide one model.   

The individual branches support each other to provide security, with a combined balance sheet of over 1trillion euros. But the banking licence for each branch means it has to lend only to local and regional businesses. 

The US’ Community Reinvestment Act has helped promote transparency amongst banks and lending to small businesses. We’ll look to introduce a similar Act of Parliament here. And we’ll look for ways for government to support innovative new forms of financing in peer-to-peer lending. Placing this emerging sector on a properly regulated basis can help it grow. 

I’ve been meeting with Mark Boleat of the Corporation of London to discuss how the City of London can use its resources and its talents to help deliver the patient, long-term financing businesses in the UK need. We want a new compact with the City, spelling out its obligations. And we’ll retain the right to legislate if needed. 

Fair contributions, fair taxes 

But it’s not just financing. Our tax system needs to be focused on the future.Tax reliefs have grown into an unmanageable thicket of different schemes and wheezes. This tangle is estimated to cost the taxpayer at least £110bn a year. Labour think it’s time for a pruning. 

We want to encourage healthy growth, keeping the reliefs that promote good investment, jobs and entrepreneurship. But we’ll cut away at the wasteful and the unnecessary.We’ll launch a proper review of the system, lead by my colleague Seema Malhotra, looking to cut away where we can but keeping the parts that help support decent businesses. 

We want to do what we can to unlock the potential of our businesses, including releasing the huge cash hoards they have built up over the last decade. We think money should be invested for the long-term. 

The system of reliefs needs a root-and-branch reform so we can get the best possible deal for taxpayers, businesses, and society at large. But we have to be clear. There needs to be a different approach to business taxation all round.

This Chancellor has cut and cut again the rate of Corporation Tax. That’s cost the taxpayer £7bn over the last Parliament. Yet business rates have risen by a total of £3bn over the last Parliament. That’s a huge increase, particularly for small businesses. We think the tax burden should fall heaviest on the broadest shoulders. And we want to see our small businesses also able to grow and flourish. So Labour will cut the headline business rate in their first Budget, and freeze it thereafter.  

We’ve made a firm defence of tax credits, and we welcome George Osborne’s decision to reverse the cuts to tax credits. Of course, we know there’s a job still to be done here with the cuts to earnings still coming through the Universal Credit system. But we recognise the value of tax credits in helping provide a solid financial footing for the self-employed and those just starting their businesses.  

Labour has always been the workers’ party. The clue is in the name. But we need to recognise how, and where, people work has changed. Self-employment reached a record high last year. New technology is enabling new ways of working. Some of this is providing opportunities for entrepreneurship and expanding the range of goods and services we have access to. But it can also mean the exploitation and uncertainty of zero-hours contracts, or the intolerable pressures placed on those in existing forms of employment.  

We have many institutions that are simply not adapted to the new world of work. Labour is proposing a new contract for a new workforce, and for new businesses. We need to think of ways that we can offer the same protections to those in self-employment as those in more traditional employment contracts. We can start by making sure maternity and paternity pay is properly provided for those who are self-employed. Labour will insist on giving everyone a fair deal. 

Recognising decent businesses 

That fair deal applies across society. Businesses create a huge value. And that’s not just the revenue they earn. It’s the vital social value of small traders, of independent shops, of start-ups. It’s the taxes paid, and the good jobs supported. It’s being a part of a community. It’s providing a service, big or small. We think it’s dog eat dog. But real wealth creation isn’t about some desperate war of all against all. 

Now I’m a socialist. But my socialism has always meant all of us pulling together. What we achieve by working together is always going to be more than what we achieve separately. Working together means recognising contributions when they are made. It means recognising the hard work and effort our decent businesses make. When people are paid fairly, and taxes paid properly. 

We know a small number fail the rest of us. The tax dodgers, wriggling out of making the fair contribution the rest of us make. The under-payers, ducking their responsibilities to their own employees and failing to pay a wage anyone can live on. It’s an attitude that’s fine for some. But the decent businesses who make the effort lose out. We’ve allowed a small minority to duck their responsibilities to society, undercutting wages and undermining the public purse. The rest of us lose out from the actions of a few.  

We think decent businesses should be recognised. So Labour would introduce a “Good Business” kitemark scheme. Those businesses who pay their taxes transparently and properly, and who pay their employees at least the living wage, deserve proper, public recognition. It’ll be open to any business that wants to apply. We’ll make sure that the strivers are properly and publicly recognised. We’re for decent businesses. We’re on the side of the real wealth creators, across the country and right here in London.

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John McDonnell Helps Dog Trust Raise Awareness of Puppy Smuggling Plight

Dogs Trust, the UK’s largest dog welfare charity highlighted the UK’s growing puppy smuggling problem to MPs at its annual House of Commons reception on 1st December, which was hosted by Sir Roger Gale MP and supported by the players of People’s Postcode Lottery


dog_pic.jpgJohn said “I am pleased to support Dogs Trust in raising awareness of the issue of illegal puppy smuggling - something which affects many people in my constituency each year. Not only is this issue affecting unwitting members of the public who are buying puppies without knowing where in the world they have come from, but it also brings with it a risk of disease to humans and dogs, which is simply unacceptable. There are also the huge welfare concerns for the puppies being transported such long distances at such a young age. It’s evident that greater measures need to be put in place to deter people from smuggling puppies into this country illegally.”


Following its initial report into puppy smuggling in November 2014, Dogs Trust this year conducted its second in-depth investigative report focused on the puppies travelling illegally into Britain under the Pet Travel Scheme (PETS). Dogs Trust found substantial evidence that underage puppies are still regularly entering the country on false documentation and are subsequently sold to unsuspecting consumers.


Adrian Burder, Dogs Trust CEO, said “as we approach the festive period, I would like to remind anyone thinking of getting a dog to do their research and ensure they know where their dog is coming from before making the decision to bring a four legged friend into their home. Dog lovers could inadvertently be lining the pockets of unscrupulous breeders and fuelling the illegal puppy smuggling trade.


“Dogs Trust would like to see far more being done to ensure that proper checks at ports are enforced, that on the spot fines are handed out to those individuals smuggling puppies illegally to act as a deterrent and that a nationwide multi-agency strategy is put in place to deal with this issue once and for all.”

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Shadow Chancellor’s response to the Autumn Statement

Mr Speaker, like me, you have witnessed many autumn statements and other statements by the Chancellor of the Exchequer. You will know that there is the iron law of Chancellor’s statements: the louder the cheers for the statement on the day, the greater the disappointment by the weekend when the analysis has been done. From what we have heard today, we do not need to wait until the weekend for the statement to fall apart.  

Over the past five years, the Chancellor has barely set a target that he has not missed or ignored.

Five years ago, the newly elected Chancellor and Prime Minister came to the House and warned us that the dire economic situation that our country faced meant that a five-year programme of austerity measures was needed: job cuts, wage freezes and cuts in public services. But we were promised, specifically by this Chancellor, that, by today, the deficit would be eliminated and debt would be under control and falling dramatically. People put their trust in that commitment. 

The Prime Minister also assured us that although it was going to be hard and sacrifices had to be made, we were all in it together. Today, five years on, the Chancellor must have some front to come to the House and lecture us about deficit reduction. Today is the day when he was supposed to announce that austerity was over and the deficit was under control. Given what people have heard today, I think that they will feel absolutely betrayed. The reality is that, after five years, the deficit has not been eliminated, and this year it is predicted to be over £70 billion. Instead of taking five years to eliminate the deficit as the Chancellor promised, it is going to take 10. Furthermore, debt-to-GDP will not be the 69% that he promised five years ago. As he said today, it will be 82.5%.

We are now potentially to bequeath to our children a debt of £1.5 trillion. That will be their debt.  

After five years as Chancellor, with that level of debt, there is no one else for him to blame. Past Governments can be blamed for only so long; there are no more excuses for this Chancellor after five years.

We were also promised that if sacrifices had to be made to tackle the deficit, we were not to worry, because we were all in this together. No, we are not. Eight-five per cent. of the money saved from tax and benefit cuts in the last Parliament came directly out of women’s pockets. Disabled people were hit 18 times harder than anyone else. Moreover, 4.1 million children now live in absolute poverty, an increase of 500,000 since 2009-10. 

The fiasco over tax credits demonstrated once and for all that we were not in this together. At the same time as the Chancellor was planning to cut tax credits for working families, he cut inheritance taxes for some of the wealthiest families in the country.

When the Chancellor and the Prime Minister were first elected to their current positions, they were attacked for being “posh boys”. I disagreed with that strongly. People do not choose the class that they are born into, or the wealth that they inherit. Nevertheless, if people are fortunate enough to have wealth or good incomes, like all Members of Parliament, the onus is on them—on us—to take particular care when making decisions about the lives of those who are less fortunate than themselves.

What shocked and, indeed, angered many, not just in the House but throughout the country, was the fact that the Chancellor made no attempt to understand the effects of the decision to cut tax credits. For many families, it would have meant a choice between the children being able to go on that school trip like the other children, and having a decent Christmas or a winter coat. Today the Chancellor has been forced into a U-turn on his tax credit cuts, and I congratulate the Members on both sides of the House who have made that happen. I congratulate the Members in the other House as well. I am glad that the Chancellor has listened to Labour, and has seen sense.

As ever with this Chancellor, however, we await further clarification of the details, particularly if the limit to two children remains, and we are aware of the impact on universal credit. It appears that the 14,000 families who are already on universal credit will still suffer the full cut, and that all families who would newly qualify for tax credits in 2018 will suffer the full cut under universal credit; so this is not the full and fair reversal that we pleaded for. Moreover, the Chancellor remains committed to £12 billion of welfare cuts over the course of this Parliament. We know that they will fall on the most vulnerable, the poorest, and those who are just struggling to survive.

Some believe that the Chancellor is using the deficit and austerity to reshape the role of the British state, and that this is some well-thought-through Machiavellian scheme. Well, I do not think that any more. I am convinced that it is sheer economic illiteracy, built on incompetence and poor judgment. Only four weeks ago, the Chancellor brought his charter for fiscal responsibility to the House. An essential part of it was adherence to his welfare cap, which we supported. Today he has broken his own welfare cap, although he said himself when he introduced it last year that breaking it would be a “failure of public expenditure control”.—[Official Report, 26 March 2014; Vol. 578, c. 380.]

He is condemned on his own terms, in his own language.

The Government are cutting today, and not investing in the future. The Chancellor is putting us all at future risk. I congratulate my right hon. Friend the Member for Leigh (Andy Burnham) on his campaign against policing cuts, which has forced a U-turn, but we do not forget that we face the highest level of risk from terrorist attack in a generation. We have already lost 17,000 police officers as a result of the cuts that have been made under this Government. We know that the first line of intelligence collection, prevention and response consists of the local police officers in the community, so we claim today another Labour gain and victory. However, there are now concerns about the impact of the local council cuts and freezes in expenditure on other emergency services. We fear for the people’s safety as more firefighters’ jobs are cut and fire stations close as a result of today’s settlement.

The Chancellor has announced that he is front-loading part of the additional £8 billion of funding for health. In reality, that will plug only some of the gap in the huge deficits that health trusts are reporting, but the Government are also relying on the finding of £22 billion of unrealistic savings. The extra money seems to be coming from nurses’ training, the public health budget, and other aspects of local authority support for care. That will be a false economy, which will simply cause more burdens to fall on the NHS. All the signs are that we are facing a massive winter crisis in our NHS, and that, yet again, we will have to rely on the professional dedication of its staff. The Health Secretary’s refusal to go to ACAS to settle the junior doctors’ dispute is no way to maintain morale among our NHS professionals.

One of the greatest scandals under this Chancellor has been the attack on social care. Three thousand beds have been lost already and according to the Association of Directors of Adult Social Services, the 2% care precept announced by the Chancellor is not nearly enough to fill the funding gap this Government have created. The result is that some of the most vulnerable people in our society will be at risk and more people will be forced to resort to their local hospital for their care.

We also know much more about the scale of people suffering from mental health problems. We welcome the additional funding today devoted to mental health, but it is no use funding mental health support through the health service when local authority support is being cut as a result of this settlement. More people will be left vulnerable.

In education, the Government claim that schools budgets will be protected, but we fear that the Government will use the new funding formula to take funding away from the pupils who need it most—the most deprived. We will monitor the funding formula carefully to ensure equity.

In today’s statement, the Chancellor has announced that for further education there will be a settlement that restricts it to cash protection. In effect, that means that around the country sixth forms and FE colleges will be under threat and at risk of closure. At a time when the economy is crying out for a skilled, educated workforce, the Government are denying young people access to the local courses they need. On today’s announcements on childcare, we note there is a delay yet again—for another two years. That is another delay following a commitment given.

The Chancellor’s much vaunted pledge on house building is cobbled together from reheated promises from the past. The vast majority have already been announced. The Tories should be judged by their actions, not their words.

The Chancellor’s first act in office was to slash housing investment by 60%. His plans today could still mean 40% less to build the homes we need, compared with the investment programme he inherited from Labour. As a result, house building remains at its lowest peacetime level since the 1920s. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) said this morning,

“if hot air built homes, then conservative ministers would have our housing crisis sorted.”

I worry that the vast majority of young people hoping for a new home will be disappointed by the Chancellor’s failure to deliver. His record on building anything so far does not inspire confidence at all. Over the past year, he has forced himself on to building sites throughout the country to secure a photo with a high-vis jacket. When he did his Bob the Builder speech at the Tory party conference, what he did not tell delegates was that his investment record is abysmal. Only 9% of the projects have started under his infrastructure pipeline in two years. In 2012, he announced a £40 billion guarantees scheme. Three years on, only 9% of that sum has been signed up. In 2011, he announced a £20 billion pensions infrastructure platform but four years on only £1 billion of commitments have been secured. The construction industry is actually shrinking this year and going into recession.

The Chancellor has also failed to invest in skills. The Royal Institution of Chartered Surveyors has said that the UK’s biggest infrastructure programmes could grind to a halt unless the Government adopt new measures to tackle the skills and funding issues. The most ironic cut of all must be the virtual closure of large sections of the Department for Business, Innovation and Skills. There are 146,000 unfilled vacancies due to the lack of skilled workers, so naturally the Government’s solution is to move to effectively close the very Department tasked with improving skill levels.

On the environment, the Government have announced today various measures but let us be clear. Ministers can go to the Paris summit on climate change with the proud record of nearly killing off the UK’s once flourishing solar renewable energy sector. On international aid, let me caution that the international aid budget was supposedly protected, but now it is to be raided for defence spending.

On defence, the Government commissioned an aircraft carrier last year. A few years ago, they at least woke up to the fact that it needed aircraft as well. But the funding for the defence review is to come from £1l billion-worth of cuts, with the inevitable loss of thousands of defence workers’ jobs, whose specialist skills will be lost forever.

Alongside those cuts and many more to help dig himself out of the financial hole he has got himself into, the Chancellor is selling off whatever public assets he can. It is no longer the family silver up for sale—the furniture, fixtures and fittings are now being sold. We know who is the first in line to buy. I never envisaged that when it came to nationalising I would be outdone by a Conservative Chancellor. The only difference between us is that I would like to bring services such as rail back into the ownership of the British people. The Chancellor wants to sell them to the People’s Republic of China. Nationalisation is okay for him as long as it is by any other state but ours.

To assist Comrade Osborne in his dealings with his new found comrades, I have brought along Mao’s little red book. Let me quote—

“We must learn to do economic work from all who know how, no matter who they are. We must esteem them as teachers, learning from them respectfully and conscientiously. We must not pretend to know when we do not know.”

I thought it would come in handy for the Chancellor in his new relationship.

I am sure that Tory Back Benchers will be under instruction to shoehorn into their speeches at every opportunity references to the mythical long-term economic plan. What we have been presented with today is not an economic plan but a political fix. It is not a plan when you ridiculously commit yourself to unachievable policies and leave yourself no room for manoeuvre. It is not a plan when you sell off every long-term asset you have for short-term gain. It is not a plan when you leave important industries to go to the wall—as we have seen with steel—and it is not a plan when you cut the support for those in work, leaving working families to rely on food banks. It is not a plan when you force councils up and down the land to close the very services that people depend upon, and it is not a plan when you invest so little in skills and infrastructure that our future is put at risk.

Instead what we have seen today is the launch of a manifesto for the Conservative leadership election. Our long-term economic security is being sacrificed for the benefit of one man’s career. I want to tell both the Home Secretary and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), my neighbour, who has now left the Chamber, not to worry. The economic reality that is emerging in our economy will mean that this will be seen as the apex of the Chancellor’s career.

The hon. Member for Uxbridge and South Ruislip exudes classical references in his speeches. He will recognise in the Chancellor, Icarus, the boy who flew too close to the sun and burned and crashed. I fear that for the Chancellor it is all downhill from here. Labour Members will do all we can to ensure that he does not take this economy and our country down with him.

In the end this debate is about what sort of society we want to live in. The Government are systematically dismantling all those aspects of our society that make our community worth living in and celebrating. The Chancellor is not just cutting our services today—he is selling off our future.

But there is an alternative. Our alternative is that we will eliminate the deficit but we will do it fairly and effectively. We will do it by ensuring that we end the tax cuts to the rich, that we tackle tax evasion and avoidance, and that we invest to grow. We will grow our economy on the basis of investment in skills and infrastructure. In addition to becoming the financial centre of Europe, under a Labour Government research in science and technology will enable us to become the technology centre of Europe. That means high skills, high investment and high wages. That is what Labour Members are committed to, and that is what we will secure when we return to office.

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John McDonnell Interview on Andrew Marr Show November 22nd 2015



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John McDonnell Interview Newsnight 20th November 2015



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John McDonnell MP, Labour’s Shadow Chancellor, speaking ahead of the Autumn Statement at Imperial College, said:


I’m grateful to you all at Imperial College for having me here to speak today. And what an inspiring place it is to speak about the future of the economy and the world of work, at the College’s new Incubator where start-ups and entrepreneurs can work alongside some of the leading minds in science. 

My own experiences of work began with the technological revolution of the time. Looking back at it now, I think about the possibilities open to us then. There were skilled jobs available for the millions who, like me, didn’t go straight from university. There was generous access to courses at local FE colleges. There was free education for those who did go to university.

On modest means, a young person could buy a house. After all the advances we have made, why is it that so many things we took for granted back then are no longer available to our children’s generation?

Wages for the under 30s have been decimated since the financial crisis, and are still 10% below their 2010 level. Home ownership in many parts of the country is out of the reach of the millions whose parents are unable to help with a deposit. Social housing is almost a distant memory, and the insecurity of private renting means upheaval and uncertainty for a majority.

How did this come about? How can it be, with all the productive and creative advances of the last few decades that in some of the most important aspects of life, my grandchildren have a less secure life to look forward to than mine?

John Maynard Keynes famously predicted in the 1930s that these expanding capacities would lead to a fifteen hour working week, the rest of the time filled with leisure activities rather than worrying about how to find more money. For today’s young people, more than any other generation since, his dream could not seem further from coming true.  

This is the backdrop to Jeremy Corbyn’s election. Jeremy was elected leader of the Labour Party by an overwhelming majority of members and supporters on the basis of a programme that rested on three pillars. 

First, a New Politics, the creation of a more democratic, engaging and kinder politics in both the Labour party and society. 

Second, a New Economics, laying the economic foundations of a prosperous, fairer and sustainable society. 

Third, a New Relationship with the World, based upon a foreign policy promoting mutual co-operation, conflict prevention and resolution rather than military aggression. 

The good society that I think most of us envisage is one that is free, democratic, prosperous, environmentally sustainable, safe and secure, based upon the values of fairness, equality and social justice, where everybody has the ability to develop their talents and enjoyment of life to the full.  

Austerity provides none of this. Worse, it moves us further and further away from that vision. The impact is felt by the poorest and most vulnerable. Just one example, amongst many. The number of those sleeping rough has risen by a shocking 55 percent since 2010. In the sixth-richest country in the world, that anybody should be without a roof over their head is a disgrace. And there is worse to come. Unless reversed by the Chancellor, under public pressure, tax credit cuts threaten over 3million households with losing £1,300 a year.These raw figures hide the real stories – of huge suffering and personal tragedies now being borne across the country.

Yet none of this suffering is necessary. Austerity, as I argued in September and have continued to argue, is a straight political choice. There is no economic necessity behind it. There is a broad consensus, from the International Monetary Fund and across the economics profession, against it. Austerity is a political choice. It threatens our future economic security. It is, however, for George Osborne and the Conservatives, the easy option.  

Since the late 1970s, governments across the World have promoted gains for the few in the belief that the many would, eventually, share.  Capital markets were liberalised and taxes cut. But under successive governments, inequality rose. Not trickle-down, but trickle-up. It is time to change the rules of the game. Neoliberalism – the current rulebook – has outlived its time. The old rules are failing the majority. And they will not cope with the changes that are ahead of us. My real concern is for the long term wellbeing of our economy. If we are to thrive as an economy we have to base our future on the rapidly developing new technologies.

It’s what many are calling the new machine age. Miss this boat and we will struggle to keep up in a competitive global market place.We will have a country divided geographically between the finance sector of the City of London – surrounded by a sea of low-paid, service sector jobs – and the rest of the country. 

In many areas, the pace of industrial decline will continue to destroy lives and devastate communities. If this sounds dystopian, take a trip to Teeside and see what the loss of steel, of Potash mining and the loss of 300 HMRC jobs can do to threaten the life of a community. 

Technological advance is forcing the pace of change. Bank of England research suggests that 15 million jobs could be at risk of automation over the next decade or so. And those most at risk from automation are the lowest-paid. For those who own the robots, of course, it will be a different story. Wealth will flow faster into fewer hands. A minority will continue to profit immensely. But there is a different way.

First we need government to understand and accept the strategic role it has to play in our new economy. The current government is blocking the path to our future. They are wilfully blind to the changes taking place. They privilege vested interests and the old ways of working. Our giant corporations are enjoying a boom time, taking their biggest ever slice of our national income as profits. Some of the most powerful institutions in the land appear to act almost unhindered. Think about how little has been done to get even our publicly-owned banks to clean up their act since the crash. So many of our underlying problems can be traced back to the domination of a few powerful institutions that have failed, over many years, to act in the public interest.

And yet we have a government all but captured by vested interests. Corporation tax, already the lowest in the G7, has been cut again and cut, heading towards just 18%. Featherbedding, through a wildly complex system of tax reliefs that now comes to £110bn a year. Cutting HMRC, while turning a blind eye to rampant tax avoidance and evasion, running into billions. And whilst large corporations are treated with kid gloves, those who work are shown the iron fist.  

We already have the most repressive union laws in Western Europe. The Trade Union Bill will tighten the screw still further. Labour will oppose the Trade Union Bill at every step of the way and, should it become law, repeal it in government. Unlike France or Germany, in the UK rights of workers to speak up in their own companies are limited in the extreme. No formal provision exists for workers to have a say in decisions that affect not only their own lives but potentially those of their customers.

We are throwing away the chance for those who work to bring their skills, talent, and in-depth knowledge into how our corporations make decisions. Democracy isn’t just a political question. It is a bread-and-butter issue. A new contract for the workplace means securing a better balance between those who work, and those who employ. We will open a review on workplace representation, drawing on the best practice from around the World to unlock democracy in our workplaces and release its creative potential. 

We will seek to break open the monopolies and oligopolies that dominate our essential industries, offering extended support to those seeking to set up co-operative and community ownership of their companies and assets.

Meeting the challenges of the future requires a state that can think and act strategically. A new economics can start to provide an alternative. We need to think about how government can operate on the basis not only of providing necessary public services, but also to meet challenges in the future. That is why we have launched reviews of the mandate of the Bank of England, and the Treasury’s function, to report on how they can operate in the best interests of society. 

That is just the first step in a process that will see us work with businesses, entrepreneurs, scientists, trade unions and wider civil society to shape the economy of the future. We know this can be done.  

Finland met its disastrous recession in the 1990s by transforming its economy from an exporter of lumber, to an exporter of technology. At the centre of its transition it established the Science and Technology Policy Council, chaired by the Prime Minister, drawing on expertise from across business, science, and civil society. 

Labour in government will bring together business, unions, and scientists in a new Innovation Policy strategy, with a mission-led goal to boost research and development spending, and maximise the social and economic benefits from that expenditure.  

We already have brilliant entrepreneurs like Dale Vince, who started the world’s first green energy company, Ecotricity, from a caravan in Gloucestershire. Ecotricity now supplies 75,300 homes with renewable energy and in 2014 had turnover of £66 million. We need more creativity like this. Thousands of new businesses are being created. We want government to work with, not against, those entrepreneurs helping create wealth in society.

But rather than investing for the future, Osborne has overseen a slump in government funding for vital infrastructure. As a share of GDP, public infrastructure spending has fallen from 3.3% in the final year of the last Labour government to 1.6% today. It is scheduled to fall still further, to 1.4%. Meanwhile, our major corporations, despite record profits, are sitting on vast cash piles. At least £400bn is held in corporate bank accounts - money that should be invested.  This is part of a pattern, identified by Martin Wolf, of slumping investment, relative to cash flow, across major economies. That slide has been amongst the worst in the UK, stretching back beyond the crash to the early 2000s. 

Meanwhile, dividend payments are at an all-time high. So we have a government that won't invest and corporations that won’t invest, a damaging cycle setting up the generations ahead for failure. The consequences of this failure are all too apparent. Underpaid and overworked staff. Insecurity. Businesses unable to compete. Basic utilities under threat. The National Grid has warned of electricity shortages. This in Britain, in 2015 - the sixth richest economy on the planet.  

Clearly, some of this has got back to Osborne. In a state of panic, he has been running around China trying to drum up funding. Osborne opposes nationalisation – except when it’s the Chinese or the French state doing it. Short-termism and antipathy to the state dominates every decision. 

The OECD thinks that, as a minimum, a developed country like Britain should be spending 3.5% of GDP on infrastructure. Labour in power will meet and exceed that commitment, reversing decades of underspend. This could include renewable energy, energy efficiency, major public transport improvements and ultra-highspeed broadband. Labour understands that government’s role is to provide the opportunity for massive advances in technology, skills and organisational change.  

A Labour Government would prioritise provision of patient long term finance for investment in research to support the technology that will drive future innovation in our economy. And we would look to change our corporate tax system to give companies incentives to invest wisely. A higher tax on retained earnings should be investigated, alongside improved deductibility for long-term investment. The City of London and our financial institutions can also play their part.  

Labour will seek a new compact with financial services, looking for guarantees on stable, long-term domestic investment, mobilising their skills and resources for the wider public benefit. I am hoping to meet with Mark Boleat of the Corporation of London later this month to discuss ways in which the City and finance can play their part in a new contract for Britain. We will retain, of course, the right to legislate if needed.

It is science, technology and innovation that are shaping our new world. Britain has an extraordinary and proud legacy of scientific research, of which this institution is a part. It is still a world-leader today in the quality of its research. But rather than build on that heritage, we are strip-mining it. Despite promising to protect research funding this has neglected it.

Current expenditure on research and development has fallen by £1bn in real terms since 2010. This is having results. For example, the UK’s cutting-edge neutron source at Harwell is only running 120 days a year due to funding shortages, and leading scientists say we are facing irreversible declines in “particle physics, astrophysics, and nuclear physics.” Britain spends less on research as a share of GDP than France, Germany, the US and China, all of whom are increasing their commitment to science and technology.

We spend less than 0.5% of GDP on science and that is set to reduce still further. The UK has no long-term plan to increase R&D spending. Modern breakthroughs in research are the result of past investment by government, built on the foundations of an immense scientific and technical heritage. However, in science, technology, and innovation, we are beginning to live off past glories. We can, and should, do better.

The Royal Society recommends a target of meeting at least the OECD average spend on research and development by 2020. A Labour Government will aim to exceed this, with total spending – from both public and private sources – of at least 3% of GDP by 2030. We will extend Labour’s Ten-Year Framework to cover the next decade and increase innovation support, ring-fencing this spending. 

Osborne may be trying to close the fiscal deficit. But by failing to invest, he is opening up a massive deficit with the future. We believe that any fiscal rule should ensure government’s current spending is brought into sensible balance, consistent with sustainable economic growth, whilst allowing vital investment to continue.  

Another priority will be to ensure that our provision of skills is adequate to the needs of the new economy we wish to create.  At present, employer after employer reports dire shortages.

Further Education colleges, a vital lynch-pin of the education system, are threatened with swingeing cuts. If every person is to have the opportunity to share in the prosperity that the new economy can offer, every person must have the opportunity to learn, develop and fulfil their potential.  

Secure foundations for the new economy mean prosperity across the whole country. The widening gap between our richest places and the rest is clearly excessive. Average weekly pay in North-East Derbyshire is £389 a week while in the City of London it’s £921. Government’s response to this regional disparity has been persistently inadequate.

Planned infrastructure spending per person in the North of England is one-fifth of its level in London. We won’t get a “Northern Powerhouse” unless government is prepared to pay for it.  Improved transport, greater autonomy in taxation and spending decisions, and powers to borrow will enable our regions to meet their huge potential.  

And of course we cannot allow government to strip local councils to the bone. Labour will continue to oppose the devastating cuts being made to local authority funding.  Local authorities can, and should, be local engines of sustainable, long-term prosperity.  

How we work is changing. Shifts in technology are opening up new possibilities. The spread of information technology, in particular, with the long-term decline in the cost of computing power has created opportunities that simply did not exist before. Airbnb, for example, simply could not have existed before the internet. It does not own or rent rooms itself. It provides a space through which others can do so. 

Sometimes this has been labelled the “gig economy”. Its enthusiasts talk up its possibilities for more exciting, more varied consumption, making better use of the assets we own. But a nice phrase can hide a grim reality for those who depend on the new world of work for their livelihood. The insecurity of self-employment. The uncertainty of not knowing where, or when, the next paycheque will be coming from. 

And the pressure this places on those in more typical employment, whether it is London taxi drivers threatened by Uber or call-centre workers placed on zero-hour contracts. Millions of workers excluded from the hard-won protections of formal employment contracts. And relentless pressure placed on those, the majority, still protected.

It was the labour movement that won shorter working days. Health and safety at work. Rights in the workplace. But technological change, and the unfettered free market, are tearing up the old work contract. Labour, instead, will offer a new contract for a new workforce. Security of income against uncertainty. The same rights and protections extended to all those at work. 

This is why the fight over tax credits matters so much. The tax credit system is well-adapted to new forms of employment. Small businesses, providing a useful service to the community, rely on the tax credits system to get them on their feet and smooth out their earnings. So we will defend and, where we can, improve the tax credits system. 

Self-employment offers few protections. So we will look to extend maternity and paternity rights to all self-employed workers. White van man – and woman – deserve just as much protection and recognition as white-collar workers.

Austerity is a political choice, not an economic necessity. Unless we change our political choices, the vast majority will be denied the opportunities that technological change presents. We can’t afford to run a deficit with the future.   

Working with businesses, workers, and civil society, governments today can and must seize the chance to change how we live and work, both now and in the future. We can break the stalemate and change course.

A new economy, where technology liberates rather than traps. Where the fruits of scientific advance are shared by all. And where every one of us has the opportunity to develop our talents. 

A prosperous society built on sustainable growth, and predicated on the values of fairness, equality and social justice.  

It’s socialism, but socialism with an iPad.

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McDonnell calls for boost to police budget following Paris terror attacks

Shadow Chancellor John McDonnell has written to George Osborne this evening, urging him to review the police budget in order to protect frontline services in order to deal with the increased security threat following Friday’s attacks in Paris.

McDonnell recommends excluding this expenditure from the Charter for Budget Responsibility and says that Labour will support the Government in these measures in order to keep the public safe.

You can read the full letter below:

Dear George,

I am writing to you in light of the tragic events in Paris at the weekend.

The Prime Minister is correct in drawing attention to the risk our communities now face and the resources we will need to invest to strengthen our security services, including increased aviation security.

Therefore, if it would help you, I would support that the enhanced expenditure needed to meet the increased threat to our security be excluded from the parameters of the Charter for Budget Responsibility.

This would include an urgent review of the Policing budget to protect policing services that clearly will be playing a vital role on the ground and in our communities in ensuring the safety of our people.

When it comes to national security and keeping the public safe, I can assure you that you will always have the support of the Labour Party; and I hope you will welcome this suggestion as a helpful and constructive proposal in the spirit of goodwill that it is intended.

Yours sincerely,

John McDonnell MP
Shadow Chancellor 

Labour List 16th November, 2015 6:53 pm

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Team McDonnell: shadow chancellor to meet advisers Stiglitz and Piketty

Labour’s elite team of economic advisers, which includes Nobel prize winner and rock star academic, to meet in run-up to Conservative autumn statement.

eag.jpg.pngJohn McDonnell’s team of economic advisers is to meet for the first time as the shadow chancellor prepares his response to the autumn statement, increasingly confident that an intellectual and political tide can be turned against George Osborne’s call for an overall budget surplus by the end of the parliament.

McDonnell and Jeremy Corbyn set up a team of high-profile leftwing advisers in part to give some depth to the new leadership and counter their relative inexperience. Although the group was announced in September, it has not yet met and some critics have suggested it will be little more than academic window dressing for long established anti-austerity politics.

McDonnell said: “I am proud today to convene the preliminary meeting of Labour’s economic advisory committee to advise us on the development and implementation of our economic strategy. We will draw on the unchallengeable expertise of some of the world’s leading economic thinkers.

“Every policy we propose and every economic instrument we consider for use will be rigorously examined before we introduce it in government. The foundations of our economic policy are prosperity and social justice endorsed by world leading economic thinkers.”

The economic team includes the Nobel prize-winning Joseph Stiglitz, and Thomas Piketty, the bestselling author of Capital in the 21st Century. But McDonnell may come to rely more on the British-based economists in the group: David Blanchflower, former member of the Bank of England monetary committee; Simon Wren Lewis, an Oxford University economist and author of the Mainly Macro blog; Ann Pettifor, former adviser to Ken Livingstone and defender of the Keynesian tradition; Anastasia Nesvetailova, an economics professor at City University; and Mariana Mazzucato, professor in the economics of innovation at the science policy research unit at the University of Sussex.

The meeting on Thursday is expected to agree a work programme, look ahead to the spending review and examine innovation. Managing to corral such a prestigious group of economists into one room, let alone one policy position, will be a formidable challenge. The group is due to meet quarterly with some members communicating via video link.

The spending review politically will primarily focus on how Osborne defuses the backbench opposition to his £4.4bn tax credit cuts, and the distribution of the cuts across Whitehall for the next four years. But Labour MPs will be wanting a strong performance from McDonnell.

He accepted that he had embarrassed himself by saying he would vote for the government fiscal charter before then reversing that stance, admitting he had tried and failed to outmanoeuvre Osborne with clever parliamentary tactics.

Although McDonnell is keen for advice on how to approach public sector borrowing and the budget surplus, he also knows he faces a tough political task in persuading the electorate that extra borrowing – even at a time of low interest rates – will not damage the economy in the long term.

McDonnell has said he wants to discuss the UK productivity problem; broadening the mandate of the Bank of England beyond inflation; and the role of the state in securing innovation, the specialism of the prolific Mazzucato.

Some of the ideas of Ed Balls, the previous shadow chancellor – such as a national infrastructure commission – have already been appropriated by Osborne, along with Ed Miliband’s chief frontbench industrial adviser Lord Adonis, who has resigned the Labour whip to act as the commission’s new chairman.

The group is also likely to discuss the role of cities in securing growth, a subject Labour took up under Miliband but then appeared to discard, leaving the ground free to be seized by Osborne with his “northern powerhouse”.

Stiglitz, who is due to play a bigger role in the group at a further meeting next week, is likely to offer advice on tackling the issue of inequality. In his latest book, likely to be influential with the Clinton Democrats, he argues the US lags behind most other developed countries in measures of inequality and economic mobility.

In an argument adopted by Miliband, Stiglitz contends: “For decades, wages have stagnated for the majority of workers while economic gains have disproportionately gone to the top one per cent. Education, housing, and health care – essential ingredients for individual success – are growing ever more expensive. Deeply rooted structural discrimination continues to hold down women and people of colour, and more than one fifth of all American children now live in poverty.”

McDonnell has argued that Labour presented an austerity-lite message in the 2015 election, and the party has to be clearer where it stands on the balance of tax rises, borrowing and the deficit.

The shadow chancellor questions poll findings that suggest Labour lost the election because it was not seen to be tough enough on the deficit. The party has yet to publish its internal review into the causes of the defeat that was commissioned by the former interim leader Harriet Harman and chaired by Margaret Beckett.

Guardian 12th November 2015

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Shaker Aamer has finally been released

 14 years ago Shaker Aamer was sold to the CIA whilst working building schools and wells to provide clean drinking water to those living in desperate conditions in Afghanistan.

 Shaker Aamer’s return to British soil from Guantanamo this morning is a momentous occasion and a tribute to the tireless work of the dedicated campaigners that have fought so resolutely for him to be freed.

 Shaker Aamer’s 14 years of incarceration in Guantanamo Bay despitenever having stood trial, never having been convicted and cleared for release by successive US administrations is a dark chapter in the history rights abuses.

 As chair of the Shaker Aamer Parliamentary Group, I am proud to have contributed to securing his release. We will now do all we can now to provide Shaker and his family with the support they need to reintegrate back into our society and lead a normal life. In the fullness of time we expect now to be given answers to what happened to him, why this gross miscarriage of justice was allowed to occur and the extent of British involvement in his plight.”

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MP John McDonnell backs Longford calls on asylum seekers

In an interview with BBC London, following their investigations regarding the overwhelming influx of migrants into Longford Village, John McDonnell said he had requested a meeting with the home secretary to resolve the issue.

BBC London filmed two coaches and three van loads on migrants arriving in Longford village in one day and three days later, another two coaches were witnessed arriving.

John said "Local residents in Longford have always been very constructive, they have always welcomed people into the local community and they have supported refugees and asylum seekers in the past."

"What we have been saying to the Home Office is if people are coming to join us within the community, it is important that they are not all focused on one particular street or one particular area, but it should be right across the community, and we can accommodate it in that way.

"The Home Office and Borders Agency has sent large numbers of people into literally one street, in one tiny village that is already under threat from the third runway. It is just too much for one little community to cope with."


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The Shadow Chancellor John McDonnell MP writes to George Osborne on Tax Credits.

I have sent this letter to George Osborne offering to put politics aside and support him if he chooses to reverse the changes to tax credits fairly and in full.

Dear George,

It has only been three months since the Summer Budget when you chose to break the promise that David Cameron made to the British people during the election – that the Tories would not touch tax credits.

We now know that you plan to cut £1,300 from over 3 million families who are in work and doing all they can to pay the bills and get to the end of each month.

Last week you said that you were “comfortable” with this decision, and David Cameron said he was “delighted”, but the British people will not be happy that you are breaking the promise David Cameron gave to them during the election campaign and that working families are having their tax credits cut to pay for tax giveaways to a few wealthy individuals.

Now, you, me and everyone else in Westminster knows that you will have to u-turn on this issue. However, you need to do it in full. It can’t be a fudge. Not some partial reversal that scores cheap headlines, yet leaves people still worse off or lands another burden on middle and low earners or the poorest in our society. You need to drop this policy completely.

I know first-hand that for politicians the fallout from changing policy can be tough. But sometimes you have to be big enough to admit you got it wrong and do the right thing.

So I am appealing to you to put the interests of these 3 million families ahead of any concerns you may have about losing face and ahead of petty party politics. If you do, I promise you personally and publicly that if you u-turn and reverse this decision fairly and in full, I will not attack you for it.

To restore faith in our political system it’s time that politicians stopped making promises at elections that they won’t keep when in power – this is the lesson the Lib Dems learnt the hard way on tuition fees.

For the sake of those 3 million families, and the British people’s trust in politics, please see sense and fully u-turn on your cuts to tax credits.

I look forward to hearing from you.  

Yours sincerely,


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The Tories Need to Keep Their Promises on Tax Credits or Face Being the New Lib Dems

When questioned during the live TV debates before the General Election about cuts to tax credits, David Cameron told the British people he wasn't going to even touch them. As a result, the Conservatives no doubt won the votes of many people whose tax credits are soon to be cut.

And we all know now that those votes were won on an outright lie.

That is why today in Parliament Labour will call on the Prime Minister to stick by what he promised the British people only a matter of months ago.

Because it is this kind of politics that the public can't stand. It is the same old politics that saw the Lib Dems dumped by the electorate in May.

In contrast, last month at the Labour Party conference in Brighton, Jeremy Corbyn and I set out our vision for a new way of doing politics - straightforward and honest.

We will not tolerate a Government trying to mislead people and we will call it out when it does. That is what the Prime Minister tried to do when he told the House of Commons in September that the Summer Budget changes will mean that families losing tax credits will be "£2,400 better off."

Because not very long afterwards, analysis by the House of Commons Library revealed that in fact these three million families, working on low wages, will lose around £1,300 a year.

It is clear the cuts to tax credits amount to a work penalty for middle and low income families across the country. This is underlined by the independent Institute for Fiscal Studies who have said that it is "arithmetically impossible" for the Government's so called 'National Living Wage' to make up for these losses.

It was in light of this that Labour's Shadow Chief Secretary to the Treasury, Seema Malhotra MP, wrote to the Prime Minister earlier this month, asking how the Government's figures were calculated; and why they differ so starkly from those calculated by independent bodies like the IFS.

She is yet to receive a response.

Therefore, faced with a government that will not be straight with the British people before or after an election, Labour will act. Today Labour will pledge that when we return to power, we will reverse these changes, making sure these families are not losing out.

This is not just because it is the right thing to do for those affected; and it is not just because we believe the tax system should not penalise people for working - it is also because we believe that politicians should not abuse the trust of voters given to them during an election campaign.

Of course we want to see a Britain where fewer people rely on tax credits to make ends meet, but we want to see this happen through a true high wage economy - not inadequate measures like the so-called 'National Living Wage'.

But this will be of little comfort to those receiving letters in the post this winter telling them how much worse off they will be. That's why we are saying to George Osborne, it's not too late to act. We call on the Chancellor to scrap his ideological cuts to tax credits and abolish the work penalty.

What the decision on tax credits comes down to is a question of principles and in whose interest the country is being run. The Tories say there is not enough money to reverse these changes, slashing people's incomes while still managing to pay for tax breaks to the wealthiest in our country.

Even Tory MPs like David Davis, Boris Johnson, Zac Goldsmith and many more in their own party are waking up to what we have been saying.

The Tories should learn the lessons from their former Coalition partners.

In May, the Lib Dems were not forgiven by voters for the false promises that they gave before the 2010 election on tuition fees. And rightly so, the public want politicians who will be honest with them. The Tories need to keep their promises on tax credits or face being the new Lib Dems.

The Tories might arrogantly hope that voters will forget, but decisions like this define governments. And the three million people who have been lied to certainly won't forgive the Tories for the false promises they made on tax credits in May at the next election.

Tory MPs should ask themselves, what is more important, tax breaks for the few or keeping your promises to the many? Because we know the answer and if this government doesn't reverse these changes to tax credits, then Labour will.

Tuesday 20th October 2015

The Huffington Post

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Jeremy Corbyn would clear the deficit – but not by hitting the poor

Ignore the hysteria. Our plans to tax the very rich and reshape the economy are sound common sense

As people wake up to the prospect of Jeremy Corbyn actually being able to win the Labour leadership, the reaction has become increasingly hysterical, especially from elements of the Labour establishment.

The near panic is especially evident in its response to the strategy outlined by Corbyn’s team of economic advisers.

A small band of shadow cabinet members have lined up to refuse to serve in posts they haven’t even been offered, on the basis of objection to economic policies they clearly haven’t read. Rebukes to Labour supporters to end their summer of “craziness” also not only insult the intelligence, idealism and judgment of our party members but have simply made them more determined to challenge this heavy-handed, domineering establishment attitude.

Some commentators have also prophesied economic and electoral doom if Corbyn is elected. Let’s see if, at least on economic policy, we can return to some level of rational debate. Let’s start by tracing out where there is absolute agreement.

First, it is unarguable that no modern party leader can win an election if behind in the polls on economic competence. Ed Miliband, sadly, was proof of this truism. Second, deficit denial is a non-starter for anyone to have any economic credibility with the electorate. This was a key finding of the poll recently published by Jon Cruddas, examining why Labour lost the election.

So let me make it absolutely clear that Labour under Jeremy Corbyn is committed to eliminating the deficit and creating an economy in which we live within our means.

Where the Corbyn campaign parts company with the dominant economic thinking of both the Conservative government and the other Labour leadership candidates is that we don’t believe that the vast majority of middle- and low-income earners who didn’t cause the economic crisis should have to pay for it through cuts in tax credits, pay freezes, and cuts in essential services. Instead we believe we can tackle the deficit by halting the tax cuts to the very rich and to corporations, by making sure they pay their taxes, and by investing in the housing and infrastructure a modern country needs to get people back to work in good jobs.

We accept that cuts in public spending will help eliminate the deficit, but our cuts won’t be to the middle-and low-income earners and certainly not to the poor. Our cuts will be to the subsidies paid to landlords milking the housing benefit system, to the £93bn in subsidies to corporations, and to employers exploiting workers with low wages and leaving the rest of us to pick up the tab.

Where we also part company with the economic orthodoxy of the Conservative and Labour establishments is that alongside tackling the deficit we also believe that we need an economic strategy to tackle the underlying flawed fundamentals of our economic system.

While our opponents wrongfully describe anyone who disagrees with their austerity programmes as deficit deniers, they themselves seem to be crisis deniers. They fail to understand that the unregulated, law-of-the-jungle market system they advocate is inherently crisis-ridden. Unless we act on these fundamental flaws we really do doom the next and future generations to further inevitable crises.

In fact all the factors that caused the 2007-8 crisis are currently reappearing on the scene – frozen or low incomes, low productivity, asset inflation especially in housing, a hands-off government turning a blind eye to loose credit expansion and City speculation, and a growing debt bubble.

Just like 2007 all it needs is a spark like Northern Rock to set things off again. The rehypothecation taking place in the bond markets could be the trigger this time, when the US starts unwinding its quantitative easing programme.

So alongside deficit elimination, the Corbyn campaign is advocating a fundamental reform of our economic system. This will include the introduction of an effective regulatory regime for our banks and financial sector; a full-blown Glass-Steagall system to separate day-to-day and investment banking; legislation to replace short-term shareholder value with long-term sustainable economic and social responsibilities as the prime objective of companies; radical reform of the failed auditing regime; the extension of a wider range of forms of company and enterprise ownership and control including public, co-operative and stakeholder ownership; and the introduction of a financial transactions tax to fund the rebalancing of our economy towards production and manufacturing.

Public ownership does have an important role to play, but this will be through smart forms of 21st-century common ownership and control. For example, rail will be renationalised, but with a form of joint management involving workers and passenger representatives. Energy would be socialised from below by the massive expansion of renewable energy production and supply by local communities, local authorities and co-ops on the successful German model, removing the monopoly of the big six energy companies.

Conservatives claim they are “one nation” Tories when they have actually been a government for the 1% who have undermined our economic interests through their greed.

Politicians have patronised and talked down to us all when it comes to our economy, but ordinary working people have to manage on incomes significantly lower than the likes of George Osborne and his friends in the City. They could teach the bankers and many commentators a thing or two about managing a budget responsibly. Given the opportunity, we will use the sound common sense of our people.

Tuesday 11 August 2015 16.25 BST

The Guardian Comment is Free

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Appeal to Labour MPs to Halt Infighting over Leadership Election

I have sent this letter to all Labour MPs to try and draw a halt to the personalised infighting that has gone on with talk in the media of splits and breakaways if Jeremy Corbyn gets elected.

Dear Colleague,

Like me I am sure that you will have been dismayed at some of the statements made by figures within the Labour movement that are allowing the media to give the impression to the general public of a party that is internally divided. 

You and I know that this is not the case. In many ways this is just a little bit of the over excitement that often accompanies elections. 

I share John Prescott’s view that everyone should just calm down and think seriously about the long-term future of the party and the people we seek to represent. 

To reassure everyone that whatever the outcome of the leadership election we have a process for uniting the party, I am writing to propose a process to be adopted immediately following the election result that would ensure the fullest inclusion of everyone within the party in determining the party’s strategy for the coming period, its policy programme and its decision making processes. 

In this way nobody would feel excluded and everybody would have a democratic say. 

This involves ensuring that the direction of the party rests firmly in the hands of our members. 

I propose that immediately following the leadership election the new leader announces that all the leadership candidates will be given the joint responsibility of organising a wide-ranging and detailed consultation on the party’s political strategy, policy programme and internal party decision-making processes. 

For this process of party membership engagement at local CLP and regional levels to take place over a three month period culminating in a recall annual conference to take the final decisions on strategy, policy programme and democratic reform. 

In this way the future direction of the party will be placed firmly in the hands of its members and so that the party can come together to oppose the Tories and the clear political strategy they are embarking upon which is so damaging to so many people in this country. 

More importantly we must unite in order to lay the firm foundations for winning the next election. 


John McDonnell MP

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Parliamentary Committee to Investigate Environmental Impact of 3rd Runway

Parliament’s Environmental Audit Committee has launched today an investigation into the impact of a 3rd runway at Heathrow on the Government’s commitment to tackle air pollution.

Submissions to this cross-party Committee are being sought by a deadline of 5pm on Thursday September 3 2015 on the following:

  • Whether the indicative policies and proposed mitigations set out in the Airports Commission’s recommended option are realistic and achievable.

  • What the implications of adopting or not adopting those policies and mitigations are for wider government policy.

  • Whether realistic and achievable alternatives to those policies and mitigations exist, should the government adopt the recommended option.

  • What steps the government should take in these areas to reach its decision in a way that is consistent with its commitments on sustainable development.

    The chair of the committee, Huw Irranca-Davies MP said “Environmental concerns are a key part of the debate on airport expansion. Critics of airport expansion have raised concerns about whether it is possible to expand airport capacity in the South East while meeting the UK’s binding commitments on air pollution and climate change. We will be examining the Airports Commission’s assessment of these issues in order to inform the debate about the future of aviation in the South East.”

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Welfare Bill

John McDonnell opposes the Welfare Bill 


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Heathrow Villagers Pack Public Meeting on 3rd Runway Threat

Over 200 Heathrow villagers packed out a public meeting at Heathrow Primary School last night I convened to discuss the renewed threat of a 3rd runway. At the ,meeting I explained the Davies recommendations and decision making process from here on. I announced that I have convened an all day national gathering at the school on 19th September as part of the campaign to highlight what would be lost if the 3rd runway goes ahead and how we can prevent this happening. I am writing to David Cameron to invite him to this conference to explain how his "No ifs, no buts, no third Runway." promise fits in with the Davies commission. The residents at the meeting expressed their determination to continue the fight against the runway and to save their homes and villages.











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Public Meeting on 3rd Runway

I have convened a public meeting on Thursday 9th July at 7.30 pm at Heathrow Primary School, Harmondsworth, Sipson to discuss the renewed threat of a 3rd runway. Please come along.

The Davies Commission was published last week and recommended a 3rd runway to the North West of the airport. The report is available on the commission's website

The Davies Commission recommendations effectively remove from the face of the earth the village of Longford and most of Harmondsworth.

Sipson and Harlington become unliveable as a result of air and noise pollution.

The new flight paths envisaged for a 3rd runway take planes over central Hayes and the south of the borough. 

Although the Davies Commission says that 780 homes are to be demolished it is evident that 4000 will be rendered unliveable as a result of both air and noise pollution.

Ironically on the day the report was published the air pollution levels at Heathrow airport were above twice the EU's legal limits for air pollution.

Responding to the Davies Commission report the Secretary of State for Transport has confirmed that the Government will consider the report and make a decision in the Autumn.

Given the Prime Minister's categorical assurance prior to the 2010 election that "No if, no buts, there will be no 3rd runway." I have asked him to come to our area to explain his position to local residents.

There is widespread political opposition to the 3rd runway, especially in the cabinet, and many commentators do not believe that the Davies Commission recommendations will be implemented.

However if we are to succeed once again in fighting off the threat of a 3rd runway we will need to mount a massive campaign.

That is one of the issues we will be addressing at the meeting on Thursday.

Please come along to this vitally important meeting.

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John McDonnell calls on David Cameron to support the agreement to cancel debt for Greece.

We call on David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts (Greek leader calls last ditch referendum on bailout, 27 June). We believe there must be an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world. We urge the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.
Frances O’Grady General secretary, TUC
Len McCluskey General secretary, Unite the Union
Paul Kenny General secretary, GMB
Manuel Cortes General secretary, TSSA
Sarah-Jayne Clifton Director, Jubilee Debt Campaign
Paul Mackney Chair, Greece Solidarity Campaign
Nick Dearden Global Justice Now
Owen Epsley War on Want
James Meadway New Economics Foundation
Ann Pettifor Prime Economics
Diane Abbott MP
Dave Anderson MP
Richard Burgon MP
Jeremy Corbyn MP
Jonathan Edwards MP
Roger Godsiff MP
Harry Harpham MP
Carolyn Harris MP
George Kerevan MP
Ian Lavery MP
Clive Lewis MP
Rebecca Long-Bailey MP
Caroline Lucas MP
John McDonnell MP
Liz Mcinnes MP
Rachael Maskell MP
Michael Meacher MP
Grahame Morris MP
Kate Osamor MP
Liz Saville-Roberts MP
Cat Smith MP
Chris Stephens MP
Jo Stevens MP
Catherine West MP
Hywel Williams MP

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Queen’s Speech: John McDonnell’s response in the Chamber 27th May 2015

Earlier in the debate, the right hon. Member for Wokingham (John Redwood) suggested that we should have serious discussions in this Parliament about the future of our economy, and I agree with him. In the debate so far, I have found remarkable complacency about the situation that we are facing. In fact, all the structural weaknesses and other factors that were present before the last crash are now reappearing, and many economic forecasts suggest that there is a prospect of precipitating another crash over the next two years. Consumer debt is rising, as are costs. There has been no sustained pick-up in wages, productivity is stagnating and living costs are vulnerable to rises in interest rates and inflation. If the Budget on 8 July cuts £30 billion as predicted, that could push us back into recession as a result of reducing demand so dramatically.


The fundamentals of our economy remain completely unaddressed: we have an unbalanced economy; production, manufacturing and construction have still to recover to their 2008 levels; and the finance sector is oversized and unregulated. At the last estimate, 60% of the big five banks’ profits since 2011 have been lost as a result of scandals. There is now a current account deficit of 5.5%, and a massive outflow of capital from this country. We have a debt of 80% of GDP, the bond markets are extremely volatile and the Eurozone is unstable. These are all the ingredients for another crash, yet we do not seem to be debating that at the moment, despite the continuous warnings from the Office for National Statistics and the Office for Budget Responsibility in recent months.


The Prime Minister wants us to believe that economic recovery is under way and that the crisis is behind us. At the micro level, for my constituents, the economic crisis appears every payday. Many of them are experiencing economic crises, hardship and insecurity on a regular basis. As a London constituency representative, I believe that housing market failure is at the heart of our economic crisis. We knocked on every door in my constituency during the election, and I know that we are now facing the worst housing crisis since the second world war. I have 4,000 people on the housing waiting list. There were 10,000 last year, but a manoeuvre by the Conservative council simply wiped 6,000 of them off and denied them eligibility to be on the list. Tonight, I have 200 families in bed-and-breakfast accommodation. I have families living in appalling housing conditions, with overcrowding, damp and insanitary conditions. I have families living in sheds. Shanties are now being built in my constituency to house families.


Rents in the private sector are between £1,200 and £1,600 a month for a little house. We have reinvented the back-to-back in my constituency, with some families living in the front of a property and others living in the back. The landlords of those properties are reaping something like £3,000 a month in rent. The buy-to-let landlords are making a fortune out of exploitative rents in my constituency. They fail to maintain their properties, but if the tenants complain, revenge evictions take place on a regular basis. This week, however, we have discovered that buy-to-let landlords have been given a £14 billion tax concession each year in recent years. Why? It is because, as the right hon. Member for Haltemprice and Howden (Mr Davis) said, successive Governments have failed to build council houses. It is also because they have sold off council houses. The sell-off of council houses in my area has resulted in the bizarre situation of a Conservative council now having to rent back some of the council houses that it sold off 30 years ago, in order to house families in desperate need.


Affordable properties are being built at a minimal level. At the same time, affordability has now been redefined as 80% of the market rent, so “affordable” properties are now unaffordable to most of the population in my area. We were told that there would be a cap on benefits, and that that would reduce rent levels as the message went out to landlords, but it has had no effect whatsoever because supply is not matching demand.


The legislation proposed in today’s Queen’s Speech on selling off housing association properties will simply exacerbate the problem. I fully agree with the housing associations’ view that it will simply deplete their stock. Worse, it will undermine the asset base against which they can borrow to build new properties. We are told that this proposal will be funded by the sell-off of councils’ higher-value properties, but that is absolutely unrealistic. The sell-off of more council properties will mean a greater depletion of council stock. In addition, the record of reinvestment and rebuilding following the sell-off of council properties has been abysmal: it is a record of non-delivery over decades.


The Government’s legislation announced today will permanently embed the crisis in our housing market for future generations. We are storing up a greater crisis for the future. My hon. Friend the Member for Islington North (Jeremy Corbyn), who is no longer in his place, said that these policies are socially cleansing whole areas of our city. Properties are being sold off, then sold on again to speculators and overseas property developers. Even those in the professions—the teachers, the firefighters, the police officers—can no longer afford to keep a roof over their head in London. As a result, working-class people and what could be described as middle-class professionals are being forced to move out. Alternatively, they live in an asset that they cannot sell because they are trapped and cannot find an alternative. Their sons and daughters are unable even to get on to the property ladder.


This all adds to the precarious nature of living in London at the moment, as incomes fail to match basic living costs .Professor Guy Standing defined the “precariat” as people on zero-hours contracts or on the minimum wage, but many people on middle-range incomes—teachers, firefighters, the police, middle managers and small businesspeople—are now cascading into the precariat because they cannot afford the housing costs in our city. They are also faced with unstable employment, threatened by outsourcing or privatisation. They are no longer able to find a voice for their frustrations, either at work as a result of the undermining of trade union rights or, to be frank, within the political system itself at times.


We need to remind Governments to have an element of humility. This Government were elected by 25% of the electorate; 75% of the electorate failed to support them. That is why I issue this warning. There are real frustrations within our political system. People whom we represent are angry because successive Governments have not delivered the basics to them—new Labour and Conservative Governments alike. They have not provided people with decent jobs, decent wages or the ability to live in a decent home with a roof over their head and in a decent environment. Unless Governments acknowledge those frustrations and they are reflected in this House, they will be ventilated elsewhere.


If the Government fail to listen, opposition will surface on picket lines no matter what the legislation states. We will go back to the days of wildcat strikes, whether or not union members comply with the legislation proposed in this Queen’s Speech. These problems will be seen on the streets, just as we have seen tonight in Parliament Square, which has been blocked by people who are angry at not being listened to and angry at the production of this Queen’s Speech. We will also see more occupations, particularly among the people in our capital city who are desperate to have a roof over their head and are forced to squat. We saw an example last year, when a young man was evicted from a squat and froze to death on its doorstep later that night.


The Government have said that this is a one-nation Queen’s Speech, but I fear that this country has now been divided geographically and that people will be riven by division as a result. This is about inequality. The Government are not listening to the people who are suffering as a result of the recession and who are not seeing the sunlit uplands of the supposed recovery. If we in this House are not very careful, we are going to witness a population driven by anger losing faith in politics altogether. Yes of course we must have a rational debate on the Queen’s Speech, but there needs to be room for some compromises in the legislation. I urge the Government to take a common-sense approach to a situation that could, if we are not careful, develop into an elective dictatorship.

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Hayes Canal Festival 2015

This year's Hayes Canal Festival was bigger and better than ever, with a wide range of activities from kayaking, canal boat trips, a children's theatre, and numerous community stalls. Thanks to Ryan Lowder for organising this year's activities. I interviewed Ryan at the festival

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Launch of Radical Labour website

Let's transform this leadership election into a real debate about the future of socialism, our party and our country 


I’m writing to announce the launch of the Radical-Labour website I have set up with the aim of transform the stale Labour Leadership election debate into a real discussion about the future of socialism, our party and our country.


So far neither the political range of candidates for the Labour leadership nor the ideas they have voiced have set the world of progressive politics alight. If we want to use the selection of a new leader to excite people about the potential of socialist politics, then it's up to us to get this debate going.


I am launching this website to host a debate on the issues the Labour leadership candidates have to address and to promote some of the ideas and policies people think any new leader should adopt.


We start with a hard hitting analysis of Labour's electoral geography in last week' selection by Andrew Fisher, the Director of the Left Economic Advisory Panel.


At the moment the choice of a new Labour leader is looking like a glamour contest between a group of candidates with little ideologically to choose between them.


Let's transform this leadership election into a real debate about the future of socialism, our party and our country.





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I am Demanding Action by Council to Halt Tar Emissions from Conway Plant

Yet again residents and people working in local companies are reporting almost daily sickening tar smells from the new Conway bitumen recycling plant in Hayes. People are saying that the acrid smells are so bad that it makes them feel headachy and nauseous. This has been going on now for nearly 10 months since the plant opened.

I have been raising this issue with Hillingdon Council over the months since then and demanding action and yet the problem continues. It has now gone beyond any reasonable time limit.

I am extremely fearful for the health and safety of local residents and local employees working in the surrounding area in which the plant is located. That is why I am calling for firm action from the council to either force the company to tackle the emissions problem or, failing that, to shut the operation down until it is safe to reopen.


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Forget Labour’s leadership contest, it’s supporters who can save the party

There’s been a lot of self-serving nonsense talked about why Labour lost the election and what it has to do to win in the future. We’ve just witnessed a well-planned media blitz of failed New Labour ex-ministers and their new-wave proteges blaming Ed Miliband with all the old Blairite mantras that Labour has failed to be a party of aspiration, to occupy the middle ground and appeal to middle England.

This drivel from Tony Blair, Peter Mandelson and others is to shirk New Labour’s responsibility for what happened last week. No party has won an election when trailing in economic-competence polls. When the Tories shamelessly accused the last Labour government of crashing the economy, they were right, but for the wrong reasons.

The crash was not down to over-spending and over-borrowing, but down to the policy of lifting virtually all lending controls off the banks and finance sector; a policy promoted by both New Labour and even more virulently by the Conservative party. No deficit at all would have existed if New Labour had tackled the widespread and alarmingly high levels of tax evasion and avoidance by corporations and the filthy rich. Of course the crash was transnational, but New Labour not only shared in the global promotion of neoliberal free market economics, it also had a special responsibility for failing to regulate the City of London.

As a result, instead of eliminating boom and bust, New Labour contributed to the greatest bust since the 1929 crash. It also failed to build the homes people needed or develop an industrial strategy that delivered secure, well-paid jobs, and allowed the share of the country’s income going to wages compared with shareholders’ profits to fall. Combine this scale of economic incompetence with New Labour lies over Iraq, and Miliband had a virtually impossible hand to play in rebuilding people’s trust in one term.

With an overall majority in parliament, the Tories will now unleash a tsunami of cuts in welfare benefits, privatisation and attacks on trade union rights and civil liberties. The divisions in our society will escalate. Scotland is already on the edge. The Tory victory may suit the SNP perfectly, with every austerity measure blamed on Westminster, engendering the call for another referendum. London is potentially a rebel city. The division between very rich and poor is at its starkest here.

The strains created by housing shortages, low pay and insecure employment have dragged more and more people into the precariat. Many Londoners who looked for change via the ballot box have now had their hopes shattered. Direct action has become increasingly commonplace. If politics and parliament fail people, then their only recourse is the streets.

We could also soon be facing another large-scale economic crisis. All the familiar ingredients are there. The creation of a debt bubble based upon a housing shortage, inflated and rising property prices but low pay, a lack of productive growth in the economy – especially in manufacturing – and a billowing trade deficit. All the factors that led us to the crash of 2007.

Labour’s response is to launch a leadership election, in which it is impossible to put a cigarette paper between the prospective candidates. Rather than rushing into a leadership contest, surely a more fundamental discussion is needed to determine the sense of purpose of the Labour party and how it can become a social movement once again, rather than just an electoral machine. This also means talking about how we link up with the many other progressive social movements that people are increasingly forming and participating in to resist the brutality of the Conservatives in government.

Leaders play an important role, but it is the Labour party’s supporters and potential supporters who should take the lead in discussing and determining the sense of purpose and direction of the party if we are to return to being a social movement aiming to transform our society. It is that process many of us want to see before a leader is selected.

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Election Result in Hayes and Harlington

I want to thank all my campaign team who worked so hard to secure such a great result in our constituency yesterday and to thank all our supporters.

This is the fifth time I have been elected to serve our constituency and I want my constituents to know that I will continue to do my best to represent them, assisting with their problems and speaking up with a firm voice for the whole community.

Thank you,


The result was:

John McDonnell    Labour                 26,843    59.6%  

Pearl Lewis          Conservative        11,143    24.7%

Cliff Dixon            UKIP                        5,388   12%

Satnam Khalsi      Lib Dem                    888      2%

Alick Munro          Green                        794     1.8%

Labour Majority                                15,700    34.8%     

Turnout   60.2%    

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Promoting Local Nepalese Earthquake Appeal

Last Friday I attended one of my regular meetings with the Hillingdon Nepalese Gurkha Association. It was a well attended discussion of the issues facing our local community.

Little did we know then of the tragedy that would hit the Nepalese people the next day with the earthquake costing so many lives and visiting such suffering on this relatively poor community.

Members of the Hillingdon Nepalese Gurkha Association have been moved by the expressions of sympathy and offers of support they have received from members of the community in Hillingdon.

They would like to turn that support into concrete assistance by launching an appeal in Hillingdon for donations to assist the Nepalese people in this time of need.
I have advised the Association that it may be best to see if this appeal could be undertaken under the auspices of the mayor of Hillingdon's office as this would be seen as the whole community coming together and be more effective as a result. 

The Chair of the Association, Mr Surya Emsong, has written to the Mayor to ask therefore whether this appeal and the receipt of donations could be under the auspices of the Mayor's charity appeal. This would enable local people to submit their donations to the council and have the confidence that the funds collected were going to the right place to maximise their effect.
I have also asked the Mayor to support this approach so that we could work together as a whole community to assist the Nepalese people who are suffering so much at present.

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My Third Election Campaign Report

This is my third election campaign report. Things are beginning to hot up.

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Election Campaign Report Second Week

This is my election campaign report from the second week of the campaign. Apologies that it has been delayed a little as we have all been really busy out on the street and in the community campaigning.

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Launch of Petition to Save Punjabi Language Exams

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Launch of Petition to Save Punjabi Language Examinations

In the last week of Parliament it was revealed that some Academic Qualifications Awarding Bodies were dropping Punjabi from their lists of examination subjects at GCSE and A Level. This is part of the Coalition Government's reform of educational qualifications.  
John McDonnell, who founded the All Party Punjabis in Britain Parliamentary Group, has launched a nationwide petition calling upon the incoming Government to act to ensure that Punjabi is maintained by the Qualifications Awarding bodies as a GCSE and A Level examination subject.
John said " Learning the Punjabi language is critically important to preserving Punjabi culture and also helps equip many of our young people with the language skills they need in the modern world. Withdrawing Punjabi from the list of examinations taken at GCSE and A Level will undermine the teaching of this subject which is dear to the hearts of so many of our people. I am calling upon the incoming Government to intervene to ensure the preservation of Punjabi as a GCSE and A Level subject. I am asking people to sign our nationwide petition to support our campaign to save the teaching of the Punjabi language."
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My weekly campaign election report



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Local Campaign Well Under Way. If you would like to help with leafleting and canvassing please come along to our Campaign HQ in Pump Lane, Hayes.

Our local campaign for the general election is well under way now with the delivery of a letter from me to local residents to let them know that I am standing again and my reason why. I have been out every day with my teams of volunteer canvassers talking to people on the doorstep. The personal response has been really warm and friendly and very supportive.

The doorstep conversations I have had with local people have reinforced my view that people are worried about the NHS, the housing crisis locally and the hours they have to put in at work just to keep a roof over their heads. Thee is a lot of concern about the future for young people.

I have to say also that people are angry about the deterioration in the local environment, especially the build up of litter and dumping and the way buy to let landlords are neglecting the properties they rent out.

I am launching fresh campaigns in a number of local areas to get the council to wake up and take some action on these environmental concerns. These environmental problems reinforce all our views that this Conservative controlled council couldn't care less about the south of the borough.   

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I Am Demanding Action against Pollution from Bitumen Plant

For months now local people have been reporting dreadful odours coming from Conway's bitumen recycling plant in Hayes, located to the East of the Hayes Bypass. This problem has happened again this week. The emissions are so strong that workers at local companies are feeling nauseous. I have contacted Hillingdon Council every time that the emissions have been reported but still the problem is recurring. I have repeatedly called for firm action by the council to prevent any recurrence of this appalling situation. I am fearful that people's health is being put at risk.

When Conway's submitted their planning application for this plant two years ago I warned the council of my fears about the impact on air pollution in an already heavily polluted area. The council ignored my concerns and allowed the planning application. Now we are faced not only with the smell of tar wafting across the local area but also a direct impact upon the health of local people. This is unacceptable and I am demanding immediate action from the council to protect our community from this risk. 

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I am standing again as the Labour Parliamentary Candidate in the election on 7th May.

The reason I am seeking re-election is because I am really worried about what this government is doing to our community and what could happen if the Conservatives get elected again. 

Just take two of the issues I am worried about. 

I am extremely anxious about the threat to our National Health Service.  

Only this month a report on Hillingdon Hospital by the government’s own health watchdog revealed that although we have hard working and dedicated nurses and doctors, patients’ safety has been put at risk by shortages of staff and the fabric of the hospital building, which is described as “like something out of the 3rd world.” 

My fear is that if the Conservatives win the next election the NHS will be privatised and sold off altogether, with the future of our local hospital at risk. 

I am also worried about the local housing crisis we are now facing. 

High rents, skyrocketing housing prices, overcrowding, families living in appalling conditions and no council houses being built. 

It’s no wonder that we have hundreds of families living in bed and breakfasts, thousands are on the council’s housing waiting list and local families just can’t afford to buy such high priced properties. 

We need a Labour government that will build council homes again and control rents. This will ease the demand for housing and bring down prices. 

These are just a couple of the reasons I am standing again as the local MP.   

I believe that we need a local MP who knows our area and stands up for our community no matter which party is in government. Once again I will be the only candidate that actually lives in our area.

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John McDonnell sponsors the Local Newspapers debate in Parliament

I opened the debate by placing on record that he is the secretary of the National Union of Journalists parliamentary group. It is a cross-party group of MPs who have raised issues on behalf of the union and journalists generally over a number of years.

Let me briefly explain what has been happening in recent years. The NUJ has published a chronology of closures and job losses in local newspapers over the past nine months. It is a shocking roll-call of cuts on a significant and worrying scale. I will not go through it in detail now, but I will place in the Library, for Members’ information, the short report that the NUJ has provided. It illustrates the range of titles that have gone in the past nine months, and the scale of cutbacks of journalists, sub-editors and photographers.

Throughout the ’90s and until about 2005, local newspaper profit margins ranged from approximately 20% to 35%. In a normal business, profits on that scale would be reinvested in the industry long term which would fund the transition to the new model. That did not happen, unfortunately. I hate to say it, but some of the company results make it clear that instead of being reinvested, those profits were used for sizeable shareholder dividend pay-outs. In addition, the pay of newspaper executives was enormous.

Another issue that has affected the sector over the past 10 years is the rapid closure of local presses.  As a result of such closures, any new entrant to the regional newspaper market is forced to choose between bearing the virtually prohibitive expense of a new press, entering into contract arrangements with potential competitors, or printing outside the UK and building import costs into their overheads from the outset

I repeated the statement in the NUJ briefing, which was sent to all MPs. It believes that journalists should be at the heart of local communities, speaking and listening to readers. It believes that there is a strong future for local papers that enjoy high levels of trust among their readers, but the sector is in a precarious position. That is why year-on-year cuts, pay freezes and increased work loads are creating low morale among journalists at local papers and undermining the product that companies are seeking to sell. Professional journalism, community journalism and investigative journalism could be casualties in the coming years if we do not act soon.

I went on to say that the NUJ has been running a country-wide campaign with Co-operatives UK and the Carnegie Trust to consider how good journalism could be funded. An issue that has come up, including at our seminar, is that the NUJ believes that this Government’s Localism Act 2011, which we supported, should be amended to give local newspapers protected status as community assets to prevent newspaper titles from closing overnight and allow new owners—including co-operatives and other community initiatives—time to put together bids for the paper. Newspaper groups should not be allowed to close a paper and lock away a title that has resonance in the local community. Legislation is also needed to prevent newspaper owners from refusing to offer titles for sale before closing them. They should at least be offered to others who might want to make them a going concern.

The NUJ asks the Government to open an inquiry into the future of local papers to explore how Government could support new models of ownership, such as co-operatives and community ownership by readers, and investigate how Government subsidies and tax advantages could work for local newspapers. I welcome yesterday’s statement, but tax concessions and reductions in business rates should not be allowed to go towards featherbedding companies with increased shareholder dividends or into high salaries for executives.

We should consider how local papers could be funded or part-funded, as others are, on a public service model. If local papers receive public subsidies through tax concessions or otherwise, there should be a public benefit test. Do they report council meetings? Do they report what is happening with local statutory agencies, and hold them to account? We have also been proposing for a while that the use of industrial levies should be investigated: for example, a 1% levy on pay TV operators such as Sky and Virgin Media would bring in about £80 million a year to fund the development and transitional costs of the local newspaper sector. A 1% levy on the five big mobile phone operators could generate £208 million a year. On boardroom greed, one proposal that has been debated is to link chief executives’ and executives’ pay not just to performance but to their employees’ pay, and to ensure trade union and proper representation on remuneration committees, so that there is more transparency and openness.

In finishing, as we have seen today, despite all the travails of the local newspaper sector, the recognition of its importance is prompting Government and all parties to consider seriously how we can intervene to support it in this period of transition into the new digital age. It will survive and thrive only on the basis of preserving and promoting quality journalism. Without that, a local paper is undermined as a product and will wither on the vine. I urge whoever is in government next to seize the NUJ proposal of an open and engaging inquiry involving all stakeholders into delivering a way forward to enable an essential public service to flourish once again.

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Open day at the Great Barn, Manor Court, London, Harmondsworth UB7 0AQ

On April 12th the Stop Heathrow Expansion group are welcoming all to Harmondsworth to raise awareness of the great threat to our communities. Whilst this beautiful historic village is the one earmarked for demolition, it is merely a focus point to highlight all the villages that would be destroyed or rendered uninhabitable by airport expansion. Tens of thousands that would be adversely affected by noise and pollution might like to stand here and be counted now, prior to the general election, to ensure all political parties know people’s strength of feeling on this issue. Efforts to kick it into the long grass until we have already cast our votes must not be allowed to silence us.


We have a number of photo opportunities on the day including: tree planting for the future on land that would be compulsory purchased, a boundary mural showing where the new airport fence is being forced upon us and the Great Barn, newly restored, will be open to the public for the first time this year. All visitors will be also be able to investigate the other historic and listed buildings, and the threatened natural delights of Harmondsworth Moor, with the help of guides and illustrated leaflets. The two local pubs serve great food and fine beer making this potentially the most civilised opportunity to protest possible.


Please pledge support and advise of numbers possibly attending to  

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John McDonnell criticises Government for its non-implementation of legislation in relation to tax avoidance

In replying to the budget statement in the Chamber on 20th March John criticised the target set by the Government of recovering just 3% of the tax gap and the implementation of this legislation.

The Budget sets a target of raising £3.1 billion through tackling tax evasion and avoidance. The Government have identified a tax gap of £35 billion, which has remained almost static for the past few years. However, an auditor from the World Bank auditors has said it is nearer £100 billion. The tax justice campaign and the Public and Commercial Services union, which represents the tax collectors themselves, has put it at £120 billion. Therefore on the Government’s own figures at best, we are simply going to tackle, if successful, less than 10% of the tax gap, but more realistically less than 3% which is a dismally low target.

John expressed his concerns about the regulatory bodies who police the professional standards. He points out that if they are given greater responsibilities in setting and enforcing professional standards, they will in fact be policing themselves because these committees are populated with representatives of firms promoting tax avoidance schemes. 

He went on to question who is going to prosecute these firms. The Serious Fraud office is not equipped to take on these giant corporations. The Crown Prosecution Service is hardly visible with regard to prosecution of big corporations, and HMRC staffing cuts have denied it the professional expertise needed. The real issue is that no matter how many policy statements, reports and legislation we have, it is all rendered pointless if HMRC does not have the staff and resources to implement them.

John said MPs on a cross-party basis supported the idea that if a company is prosecuted for tax avoidance, it should not then get a public contract. However, two years since it was introduced, not a single tax dodging entity, despite judgments by tax tribunals, has been barred from securing public contracts. Most frustrating of all is precisely this non-implementation of legislation which we think could be effective and which we have all supported.

John concluded sayingIf we are really going to tackle tax avoidance and evasion and have any hope of closing the tax gap, we need a more effective, better staffed and better resourced HMRC. We need greater parliamentary accountability, which means: a specific Minister responsible for HMRC; and a separately established Select Committee to which it is accountable. We also need resources for organisations outside Government that can monitor it and respond to the detailed, complex Government consultations. Above all else, HMRC needs staff resourcing and the reversal of the staffing cuts on this scale that have neutered its operations. If we really want to tackle the tax gap, we need to ensure that it is properly staffed, that Parliament is in control and that there is proper accountability and monitoring throughout. In that way, we can tackle the tax gap, and we can start talking about the fairness of the wealth tax, the financial transaction tax and corporate tax reform. We need not so much a long-term economic plan as a long-term fair tax plan.”

To view the full debate as set out in the Handsard please click below

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Final People's Parliament session ahead of the election ‘Once the votes are counted, what happens next?

Ahead of the approaching general election, on the final day of Parliament before dissolution, we will be hosting a broad discussion on the what impact the outcome will have on our politics and where it leaves us.

You are warmly invited to come and join us. For full details and to sign up, follow the link below.

I would also like to take the opportunity to flag up this weekend’s meeting of the important initiative, ‘assemblies for democracy’ and to invite you to join us if of interest. 

‘Once the votes are counted, what happens next?

May’s election is set to be the closest fought in a generation and whatever the outcome it is crucial those of us campaigning for a more equal, fairer Britain make our voices heard.  On the panel, I will be joined by David Graeber, Zoe Williams, Selma James of Global Women’s Strike and Duro Oye with Jeremy Corbyn MP in the chair.

Monday 30th March 6.30pm – 8.30pm, Grand Committee Room, House of Commons

For full details and to sign up follow this link


‘Assemblies for Democracy’

Assemblies for Democracy are taking place in London (March 28), Glasgow (April 11) and Manchester (April 18). The Assemblies aim to share ideas, views and information and explore how individual voices can become a movement for change.

Saturday 28th March, 11am – 4.30pm, London South Bank University

For full details and to sign up follow this link

I look forward to seeing you at our final talk before the election,


John McDonnell MP

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John McDonnell supports the ‘No One Turned Away!’ Campaign

John McDonnell wholeheartedly supports Crisis’ campaign calling for the law to be reviewed to ensure that all homeless people who approach a local authority are given the help they need.

Crisis is the national charity for single homeless people. Their purpose is to end homelessness. Crisis helps people rebuild their lives through housing, health, education and employment services.  

‘Turned Away’ the recently published report by Crisis investigated the treatment of single homeless people by local authority homelessness services in England.  

Eight undercover researchers visited 16 local authorities across England to examine the quality of assistance single homeless people receive from Housing Options and homelessness services. In over half of the visits (50 out of 87) they received little or no help from local authorities, even though in the scenarios they were presenting they had nowhere to stay that evening.  

“Even in the 21st century, homeless people who ask their council for help are being turned away to sleep on the streets – cold, desperate and forgotten. This is nothing short of a scandal.”

In response, Crisis is demanding politicians review the help single homeless people in England get under the law, so no one is forced to sleep rough.

John said “in my constituency we are facing the worst housing crisis since the second world war, with families living in overcrowded squalor, and hundreds now in bed and breakfasts, shunted around the country just to find a roof over their heads and many people are forced to sleep on the streets rendering them even more vulnerable. This is an absolute disgrace.”

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John McDonnell attended the Launch of the Down’s Syndrome Awareness Week 2015.

John_McDonnell_with_DSA_pledge_and_LOTS_OF_SOCKS.jpgJohn McDonnell attended the Launch of  Down’s syndrome Awareness Week, which was supported by the Down’s Syndrome Association on 17th March. The campaign which encourages and supports people with Down’s syndrome to take part in activities they enjoy in their local community.  It also identifies and advises on barriers to inclusion. 

During the event MPs heard from young people with Down’s syndrome about how important it is for them to be actively involved in their local community. The event was also attended by celebrity supporters of the Down’s Syndrome Association including Rula Lenska, Joanna David and Simon Shepherd. 

Across the UK, people with Down's syndrome are getting active and involved in their communities. There are great videos showing people with Down’s syndrome talking about their favourite activities available at:  Down's Syndrome Awareness Week 2015 

The Down's Syndrome Association supported WORLD DOWN SYNDROME DAY on 21 March by inviting their 20,000 supporters to wear special, limited edition LOTS OF SOCKS. People across the UK wore the socks at home, nursery, school, university, work, on holiday  may be on 21 March 2015 to celebrate together and raise money for the charity. 

John said “I fully support this campaign and urge everyone to get behind it too. It is extremely important that people with Down’s syndrome benefit from all the opportunities and activities available in our communities.”

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John McDonnell secures parliamentary Support for the release of Shaker Aamer

shaker_Aamer_demo.jpgJohn McDonnell led the Shaker Aamer debate in Parliament on 17th March which resolved unanimously to call upon US government to release him from his imprisonment in Guantánamo Bay and allow him to return to his family in UK.


John McDonnell who convenes an all-party group set up to coordinate the Parliamentary campaign for the immediate return of Shaker Aamer , an aid worker imprisoned 13 years ago, to his British wife and four children in London has said:


“It is absolutely unacceptable that an innocent man continues to be to be subjected to inhumane and degrading treatment in absolute denial of his human rights remains in Guantanamo.


The continued incarceration of Shaker Aamer on US territory, without charge and against who unspeakable atrocities have been committed shames both our Governments and is an international outrage” 


Shaker Aamer, the last British resident in Guantanamo, is soon to begin his 14th year of imprisonment without charge or trial and having been cleared for release under two separate US administrations.


John Concluded the debate saying 

“I thank the Backbench Business Committee for allocating time for this critical debate at an important time in the campaign to secure the release of Shaker Aamer. By way of introduction, I pay tribute to all those who have campaigned so hard over many years to bring Shaker Aamer’s case to our attention. I pay tribute to the “Save Shaker Aamer” campaign, and all those campaigners who have stood in Parliament square month after month protesting in their orange boiler suits with their placards until someone began to listen to them. I pay tribute to the “We Stand with Shaker” campaign, to Shaker’s family who have joined us today and to the organisations Reprieve and Amnesty International. I pay tribute, too, to the full range of newspapers that have supported this campaign. They range right across the political spectrum of journalism from the Daily Mail and The Daily Telegraph to The Guardian and the Morning Star. In addition, I pay tribute to all the celebrities, actors, artists and sportspeople who have got behind this campaign. Finally, I thank the many hon. Members from all sides of the House who joined the all-party parliamentary group, which now has more than 40 members drawn from all political parties.”

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Cost of Living Crisis Book Launch

John McDonnell hosted the book launch of The Cost of Living Crisis’ written by Michael Calderbank

The Cost of Living Crisis clinically exposes the gross injustice of the austerity programme and calls for it to end, advocating a positive programme to replace austerity by curbing excessive profits, taxing the obscenely rich and stimulating the economy by increasing the spending power of all wage earners.

The book details how states and corporations have combined to exploit, oppress, and impoverish millions of people, whilst enriching the already rich and is an invaluable weapon in the hands of all those refuting and rejecting the imposition of austerity.

In launching the book Michael Calderbank has called forthe
Conservative Government to be held accountable for the consequences of the pernicious and unjust austerity agenda:

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John McDonnell chaired a packed meeting to launch ‘Blacklisted’

John McDonnell chaired the official book launch of 'Blacklisted' by Dave Smith and Phil Chamberlain published by New Internationalist. The event highlighting the “heroic campaign” undertaken by all those involved with the book and stated that Blacklisted will help “right some of the wrongs” individuals fighting for justice have faced for many years.  

The book exposes the illegal blacklisting scandal orchestrated by the largest multinataional construction companies in the UK including Sir Robert McAlpine, Carillion, Costain, Balfour Beatty, Skanska and Kier. The book provides previously unseen documentary evidence about the role of undercover police spying units in colluding the blacklisting conspiracy.

John McDonnell read out a statement from ex-undercover police officer turned whistleblower, Peter Francis. The full text of the statement is below:  

Statement from Peter Francis March 12th 2015 

“I am humbled as well as honoured to be offered to speak tonight at such an important book launch here at the
prestigious House of Commons. 

However I cannot appear here for a number of reasons, including and primarily, because of some very serious outstanding legal issues/difficulties with the Metropolitan Police, that continue to hang over me ever since I became a whistleblower and therefore a potential criminal in their eyes. 

I have received clear legal advice that me, even speaking here today, is likely to be considered a breach of the Official Secrets Act because I have not been granted permission from the Metropolitan Police or Home Secretary to speak to you.  

This remarkable, well-researched and must-read book clearly shows how police spying on political activists has destroyed lives and that I, most unfortunately and regrettably, played a part in this.  

The forthcoming Home Secretary's public inquiry into undercover policing must include a forensic, independent (in other words, non-police) examination into all the blacklisting files compiled by the Consulting Association and then cross-reference them with corresponding Special Branch individual activists’ records to look at the areas of collusion.  

There will be multiple duplicates. Of that I have no doubt at all.  

In relation to Mark JENNER aka Mark CASSIDY, exposed last week in the media as being a UCATT member.  

An anonymous and unaccountable Scotland Yard spokesperson has obviously re-quoted their usual attempted 'Get out of Jail Free card' response by saying “We neither confirm nor deny the identity of any individual alleged to have been in a covert role. We are not prepared to confirm or deny the deployment of individuals on specific operations.”  

But tonight, here in this supposed home of UK democracy, please let me state very clearly that Mark JENNER was 100% one
of my fellow undercover SDS Police Officers deployed alongside me in the 1990s.  

Jenner, who has now been very publicly exposed, should be forced to appear in person at the public inquiry to account for his spying on, amongst numerous other political protesters, the totally law-abiding construction union UCATT members whose only 'crimes' were being union members.  

I would also like take this opportunity to unreservedly apologise to all the union members I personally spied upon and reported back on whilst deployed undercover in the SDS.  

Including those not only engaged in working in the construction industry but also those in the National Union of Students (NUS), National Union of Teachers (NUT), Communication Workers Union (CWU), UNISON and the Fire Brigades Union (FBU).  

As everything I have previously stated, I am prepared to repeat all of this under oath at the public inquiry and should UCATT or any other union or the blacklisted campaigners wish me to, in any court cases they might bring against the relevant UK authorities. 

Yours in solidarity. Because at this precise moment in time, before the public inquiry, there is "No Justice", there is "Just US".  

Peter FRANCIS former SDS undercover Police Spy and now Police Whistleblower


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John McDonnell MP joins campaigners delivering petition to number 10 in support of Edna’s Law

downng_st_whistleblower.jpgJohn McDonnell hosted a meeting in the House of Commons in support of Edna’s Law to protect whistle-blowers representing all sectors including prison, social services finance, NHS and social care. He then joined them in delivering the petition below to number 10 which included damning evidence from more than three thousand whistle-blowers.


To: The Prime Minister. 

Action is needed now to Protect the Protectors  

We the undersigned represent whistle-blowers from all sectors, including social care, construction, finance, prisons, education, social work, transport and NHS. 

Cases now in the spotlight, eg Rotherham, HSBC, Crossrail, Savile, Oxford and the Westminster Child Sexual Abuse allegations show the urgent need for

ONE law to protect ALL whistle-blowers in ALL sectors - Edna’s Law. 

In many cases, eg Baby Peter’s death, whistle-blowers did raise concerns but were victimised while wrongdoers and those who victimised them stayed in senior jobs. We ask for the following action: 

That those responsible for wrongdoing or concealing wrongdoing are held to account now because there can be no justice whilst such injustice stands. 

That all those genuine whistle-blowers who have been failed by the system and by the Public Interest Disclosure Act be given full redress. 

Without accountability nothing can change and many people in senior positions who have ignored whistle-blowers and covered up serious wrongdoing, some criminal, still continue working and causing further harm. You cannot build on an unjust and rotten system and to try to do so is to condone the past wrongdoing. 

We note your intention on mandatory reporting on child abuse which intends to jail those who fail to report abuse, whilst the law completely fails those who whistle-blow and suffer the consequences for reporting. 

Therefore we ask that PIDA be scrapped and replaced by Edna's Law which will protect the protectors of the public and will hold to account those who are truly culpable for failures and wrongdoing. 

We have already made three direct appeals to Parliament and we draw your attention to our evidence listed overleaf, which has not been acted on by Sir Robert Francis, The BIS, Health or Justice Departments.

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John McDonnell MP Blocked Boris Johnson’s TFL Bill

John McDonnell last night blocked Boris Johnson’s TFL Bill which John described as a “speculators’ bonanza.” The Bill aimed to give the Mayor wide-ranging powers to enter into deals with developers and speculators to develop TFLs’ sites.

In the debate John expressed his strong concerns that this would mean huge risks for Londoners if these deals went ‘pear shaped’ and could result in the loss of a large number of sites which could be needed in the future for extending and improving London’s transport network.

The full debate can be accessed at

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John McDonnell raises concerns about how Deregulation Bill will affect the area around Heathrow

During the debate of the Lords amendments of the Deregulation Bill regarding safeguards to short term letting, John McDonnell raised concerns about the way in which the area around Heathrow Airport would be affected by these amendments. With the threat of the third runway, Sipson Ward is already three-quarters bought by Heathrow Airport Ltd and rented out on short term licences, of up to two years which is destabilising for the community anyway.

The current system at least gives local authorities in their local areas some local tools that they can use against the adverse effects of short-term letting. John said “I cannot see the benefits to any but a small commercial niche that seeks to profit at the expense of the wider community. I am fearful of the impact on legitimate traders as it is. I am worried about the impact on the hotels along the Bath road, which are a source of employment to my local community. But in addition to that, the average hotel in my area employs between 200 and 250 staff. Many of those staff live within the local community in private rented properties. I am worried that this will affect the private rented market in my area and have a knock-on effect on staff who are not the highest paid and sometimes fairly low paid.”

John believes that if there is to be a new regime, it is critical that these matters should be determined locally. It should be for local authorities to determine how they tackle the particular issues in their areas. This proposal seems to fly in the face of all the statements we have had from the coalition parties about the development of localism within policy making and within government.

He asked for clarification that once the legislation has gone through, will local authorities be able to submit a bid to designate an area, or do they have to wait for problems to arise before making a submission?

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John McDonnell will be chairing the People’s Parliament event “Land Ownership: Who owns our country?”

Tuesday March 17th 2015, 6.30pm – 8.30pm, Committee Room 15, House of Commons

Other members of the panel include

Kevin Cahill Author of ‘Who Owns Britain’ and ‘Who Owns the World’ Parliamentary
researcher and associate editor of the Sunday Times Rich List. Author of 21
other rich lists. Investigative reporter with Sunday Times Insight Team on
offshore tax dodges. Publisher of the Second Domesday of the United Kingdom.
Supercomputer specialist for Computer Weekly and wrote Trade Wars, an
account of CIA spying in the UK in the 1980’s.

Fiona O’Cleirigh Freelance reporter. Shortlisted for Press Gazette ‘New Journalist of the
Year 2013′ award for investigation for Exaro News on Northern Ireland EU
funding. Shortlisted for BT Security Writer of the year 2014 for reporting
on NSA spying in the UK. She has reported on conflict in the Western Sahara
and written for the Guardian, Mail and other newspapers. She is the
editorial director for the publication of the Second Domesday and has spoken
on landownership in Committee Room G of the House of Lords.

Yoni Higgsmith Land reform activist and Communications Director of Labour Land Campaign, a cross labour movement campaign to promote land reform policy and theory. He has produced and directed a number of land reform films including Rachel Rose Reid’s poem ‘The Circle: An Ode to LVT’, ‘Land’ for and ‘The Taxing Question of Land’ created with the Coalition of Economic Justice (CEJ). The CEJ is an umbrella organisation that brings together all land reform groups in the UK. In late 2014, he became General Secretary of Professional Land Reform Group, promoting land reform within professional circles.

Tony Gosling Tony Gosling started his working life in the aviation industry moving on to work as a researcher and journalist at BBC Greater London Radio and other BBC local radio stations publishing online research on the Bilderberg conferences at in 1995.
After co-ordinating Oxford’s ‘The Land Is Ours’, land rights campaign in the 1990s including Wandsworth (1996) and St George’s Hill (1999) Diggers occupations, he is now a freelance investigative radio journalist and writer based in Bristol with a politics show archied online at .

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John McDonnell spoke at Unite the Union Retired Members West London Branch

John spoke to local retired unite members on Tuesday 10th March about the threat to pensions and trade union rights if the conservatives get re-elected. John said “I fear for pensioners if the Tories get in, especially for benefits like the Freedom Pass and the Winter Fuel Allowance”.

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John hosts a reception in honour of Cllr Jagjit Singh’s remarkable achievement in running 150 marathons for charity.

John McDonnell will be hosting a reception at the House of Commons this evening 10th March to celebrate local councillor Jagjit Singh’s wonderful achievement of running 150 marathons for charity. John said “Jagjit is an absolute phenomenon and deserves our thanks for the work he undertakes for charitable causes. This is just a small way of saying thank you and honouring him.”