Shadow chancellor Rachel Reeves has denied her three point plan to “buy, make and sell” more in Britain amounts to “slapping a Union Jack” on public procurement.
Labour unveiled its new policy on Sunday, saying it would use social and environmental clauses in public contracts to raise standards.
It said its approach would mirror that of other countries including France and the United States.
Labour would ask every public body to give more contracts to British firms, and require public bodies to report on how much they are buying from businesses in this country, Ms Reeves said.
She cited how shortages of personal protective equipment during the pandemic had highlighted concerns about insecure supply chains, as well as huge taxpayer contracts going overseas instead of to British companies.
Speaking to the BBC’s Andrew Marr Show, Ms Reeves said the policy was about taking into account the social as well as the economic value of bids.
Marr said some people in the Labour Party would be likely to feel “quite queasy” about a policy “that it is slapping a Union Jack on public procurement”.
Ms Reeves replied: “I don’t think it does do that.
“This is actually the essence of what Labour is for, because it is about ensuring that there are good quality jobs paying a wage you can bring a family up on in all parts of the country.”
The shadow chancellor said: “So if you’ve got two bids on the table for public procurement whether it is for HS2 or submarines or offshore wind and one of them is creating jobs in this country – high paid, high skilled jobs that will result in people paying higher taxes in to the Exchequer – we give no extra weight to that bid compared to one that creates no jobs and no value in this country.”
Ms Reeves continued: “It makes economic sense as well as common sense to ensure that we are creating good quality apprenticeships here in this country.”
It is about changing the procurement framework so you can take into account labour standards, job creation in this countryRachel Reeves
Speaking to Trevor Phillips on Sky News, Ms Reeves insisted that the policy was not about excluding foreign companies from competing in Britain.
She said: “It wouldn’t be me as chancellor leaning on public bodies to award contracts, what it is about is changing the procurement framework so you can take into account labour standards, job creation in this country and environmental standards as well.”
Ms Reeves promised to lead a “culture change” in government, reviewing the pipeline of all major infrastructure projects to explore how to increase the materials made in Britain, and increase the skills of workers.
Help would be offered to businesses considering bringing work back to the UK from overseas, she added.
Ms Reeves said: “As we recover from the pandemic, we have a chance to seize new opportunities and shape a new future for Britain.
“Labour will get our economy firing on all cylinders by giving people new skills for the jobs of the future here in the UK, bringing security and resilience back to our economy and public services, and helping our high streets thrive again.”
TUC general secretary Frances O’Grady welcomed the plans, saying: “The TUC has been campaigning for Government to use public money to create decent jobs in every part of Britain. It’s great to see that Labour is taking this agenda forward too.”
Dr Roger Barker, policy director at the Institute of Directors, said: “The pandemic has highlighted the fragility of global supply chains and the need for greater economic resilience. A greater emphasis on building the capabilities of UK business in important strategic areas is essential.
“However, Labour should be wary of pushing their proposals too far in a jingoistic or protectionist direction. An emphasis on buying British should not be achieved at the expense of delivering value for the taxpayer.”
A Government spokesman said: “Now we’ve left the European Union, we are reviewing our public procurement rules to be better able to meet the needs of this country.
“Furthermore, our new Subsidy Control Bill will empower public authorities to support new industries and create jobs – free from bureaucratic EU state aid rules.
“We will shortly publish an Innovation Strategy and our vision for life sciences as part of our plans to unleash private investment, onshore manufacturing and drive a strong economic recovery.”