McDonnell declares Labour ready for business

John McDonnell
Wikimedia commons_Jonathan Goldberg
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“Now the leadership election is over, I tell you, we have to become a government in waiting.” These were the fighting words of Labour’s shadow chancellor John McDonnell at this year’s Labour Conference.

Indeed, McDonnell seemed to be a man refreshed and emboldened. His leader’s mandate newly restored, the shadow chancellor offered a concrete his vision for Britain’s economy under a Corbyn government.

Largely, McDonnell, ever the Corbyn loyalist, matched his leader’s economic plans stride-for-stride. In a speech filled with bitter rebukes of Tory policy, the shadow chancellor lamented the increasing decline of British productivity.

“Our economy is failing on productivity because the Tories are failing to deliver the investment it needs, and government investment is still planned to fall in every remaining year of this Parliament.”

McDonnell’s plans for a living wage will also have a few employers squirming. “Under the next Labour government, everyone will earn enough to live on. When we win the next election we will write a real Living Wage into law,” McDonnell said.

This figure, McDonnell indicated, will mean a steep increase to “over £10-per-hour”. “This will be a fundamental part of our new bargain in the workplace.” But, the shadow chancellor also made a peace offering to SMEs worried by his living wage ambitions:

“We know that small businesses need to be a part of the bargain. That’s why we will also be publishing proposals to help businesses implement the Living Wage, particularly small and medium-sized companies.

“We will be examining a number of ideas, including the expansion and reform of Employment Allowance, to make sure that this historic step forward in improving the living standards of the poorest paid does not impact on hours or employment.”

Living wage aside, McDonnell’s plans for small business centred on government led investment and increased access to finance. The shadow chancellor promised the establishment of “new regional development banks will have a mandate to provide the patient, long-term investment they need”. “It’s a disgrace that our small businesses can't get the finance they need to grow. Our financial system is letting them down badly.”

All-in-all, McDonnell’s speech was a passionate defence of government’s role in the economy. “Good business doesn’t need no government,” the shadow chancellor said. “Good business needs good government.”

McDonnell’s robust socialism didn’t resonate with everyone, however. Reacting to his speech, the British Chamber of Commerce warned Labour “must remember that the state cannot control every aspect of economic or business life and stay competitive in a global economy”. 

Francois Badenhorst
Deputy editor
BusinessZone and UK Business Forums
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