Shadow chancellor John McDonnell is promising that Labour would oversee a major expansion of worker-owned businesses.

A Labour government will oversee a radical expansion of worker-owned businesses, shadow chancellor John McDonnell is promising.

In a speech in Preston, Mr McDonnell will say that Labour in office will aim to at least double the size of the UK co-operative sector - currently worth £37 billion.

He will also suggest that staff at workplaces threatened by closure should have first refusal on buying out and taking over the running of the business.

Mr McDonnell will argue that co-operatives offer significant scope for expansion while marking a revival of Labour's traditional values of "decentralised ownership and democratised wealth".

While the co-operative sector has grown by 15% since 2010 - faster than the rest of the economy - Mr McDonnell will say that it is still far smaller than those in the United States or Germany.

However evidence suggests co-operatives are more resilient than conventionally-owned businesses, he will say, with twice as many surviving the crucial first five years of trading.

He will point to the Musicians' Union - which has organised music teachers into co-operatives rather than letting them "sink or swim" as freelancers - as an example of what can be achieved.

"We want to see resilient, high-productivity businesses in an economy that is fairer for everyone," he will say.

"Co-operatives and new ways of owning and managing society's wealth are an essential part of Labour's vision for a better, fairer economy.

"Labour must be a party that is concerned about ownership of wealth and assets, not only the distribution of income.

"This is much closer to an old tradition in the Labour movement of decentralised ownership and democratised wealth."