Opposition leader says growth demands major change in way economy is run, as shadow chancellor vows to rewrite rules

This article is more than 4 years old

This article is more than 4 years old

Jeremy Corbyn said the UK needed a serious debate about wealth creation, as he called for a new style of economics to tackle Britain’s “grotesque inequality”.

Closing a Labour state of the economy conference in central London on Saturday, the party’s leader said: “Wealth creation is a good thing: we all want greater prosperity. But let us have a serious debate about how wealth is created, and how that wealth should be shared.”

Corbyn also said a Labour government would “chase down the tax avoiders and the tax evaders” and ensure HMRC had the resources it needed to do so.

Labour needed to be ambitious and bold to win the next election, he said. In the meantime, he insisted that the party could make a difference despite the frustrations of being in opposition: “We must continue to stand up against the Conservative six-year record of mismanagement of the economy – and stand up for the vital services on which we all depend.”

George Osborne had vowed six years ago that austerity would wipe out the deficit, Corbyn said. “That’s the wonderful thing about George Osborne’s five-year plans: they’re always five years away,” he added.

Shopfloor workers, entrepreneurs and technicians should be put in the driving seat, the Labour leader said.

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“We want to see a genuinely mixed economy of public and social enterprise, alongside a private sector with a long-term private business commitment, that will provide the decent pay, jobs, housing, schools, health and social care of the future. Labour will always seek to distribute the rewards of growth more fairly. But to deliver that growth demands real change in the way the economy is run,” Corbyn said.

Earlier on Saturday, shadow chancellor John McDonnell said the Blair and Brown governments had created an unfair tax system that made Britain a haven for the super-rich and that Labour would rewrite the rules of the economy.

McDonnell said the party must aspire to be another great reforming government when it returned to power.

“The last Labour government relied too heavily on tax revenues from financial services, and too heavily on off-balance sheet spending through the private finance initiative,” he said. “It didn’t do enough to clamp down on tax evasion and avoidance. It helped create an unfair tax system.”

Facebook Twitter Pinterest John McDonnell: ‘Technological change means we have to think more closely about ownership.’ Photograph: Mark Thomas/Rex/Shutterstock

To help solve the housing crisis, McDonnell said a Labour government would give councils the power to impose rent controls. The party’s former leader Ed Miliband said before the 2015 general election that landlords should only be able to raise rents by less than inflation for the duration of a contract.

McDonnell reiterated the party’s plan to build 100,000 new council houses a year, funded from housing benefit savings. He urged councils to emulate Manchester to offer cheap, local authority-backed mortgages.

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“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,” McDonnell said.



Labour has drawn up a fiscal credibility rule in conjunction with economists from its economic advisory council. It aims to close the deficit on day-to-day spending over a five-year period as well as ensuring the government can invest.

McDonnell accused Britain’s banks of continuing to pump money into the property market while failing to invest in the “productive economy”.



There was a need to change the way capitalism in Britain worked, he told the audience: “Previous Labour governments were content to only think about how to redistribute income. Today, technological change means we have to think more closely about ownership.

“I’ve spoken before of moving beyond the Tory right to buy and creating a Labour right to own. This can be at the centre of our offer to Britain – a radical decentralisation of economic power and authority back to working people and local communities.”