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McDonnell offers finance sector a role in Labour policy making

The shadow chancellor said the City had a role to play in the ‘transformative programme’ he would enact if Labour came to power.

Britain’s financial sector would have a seat at the table under a “radical” and “intervening” Labour government, John McDonnell has said.

The shadow chancellor said that he wanted a “new start” between the party and the fiscal sector, but warned that it would not like all of his policies if Labour was in Government.

Speaking at a conference organised by the party, he attacked how he was portrayed in the media as “a raving extremist who is about to nationalise their company”, but also criticised what he said was the light touch approach of recent decades.

Addressing Labour’s Future of the Financial Sector conference at Bloomberg’s UK headquarters in London on Thursday, Mr McDonnell said the City had a role to play in the “transformative programme” he would seek to introduce if his party won the next election.

What we are offering is a new start in the relationship between Labour and the finance sector John McDonnell

He told delegates: “The lesson of recent decades – including the global financial crisis – has been that a ‘hands off’ approach will not deliver the sustainable, broad-based growth which we need and expect.

“In the last few years, the prevailing economic orthodoxy has led to wages lower today than they were eight years ago, and the slowest decade of productivity growth since the Napoleonic Wars.

“Though there were clearly other factors, I think few people now dispute that actually these economic failures also contributed to the vote for Brexit in 2016, which we deeply regret.”

Mr McDonnell said that the financial sector would have a seat at the policy-making table under Labour, alongside manufacturers and trade unions.

Offering business a clear and straightforward approach from a Labour government, he added that he would not apologise for believing “in the need for finance to serve the wider economy rather than becoming the over-powerful master of everything
else”.

Mr McDonnell added: “What we are offering is a new start in the relationship between Labour and the finance sector.

“A relationship in which we recognise the potential of a transformed British financial system, at the leading edge of technology, fulfilling a clear, socially necessary role.

“Labour will not just rebuild our economy after the damage of almost a decade of austerity, but we will modernise it.

“And you in the City will not only get a good return from the investment you will make in our programme but what we will also deliver for you is a society you can be proud to live in and will provide the quality of life your families desire.”

Mr McDonnell’s speech heavily looked forward at the challenges facing the economy in the future, including climate change and the impacts of the digital economy.

He revealed that former shadow minister Clive Lewis had joined his team to focus on “environmental economics”.

Former shadow defence and business secretary Mr Lewis, who quit Labour’s front bench in February 2015 in a row over the Brexit vote, will have a remit to “drive the climate change issue into the heart of Treasury policy making, and therefore into the centre of government policy making”.

The Norwich South MP will also undertake a countrywide policy tour on the issue, Mr McDonnell added, saying a Labour government would “take an active lead in managing the economic risks of climate change”.

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