The last eight years has been a period of almost unparalleled waste and destructiveness in British economic policy. Even the prime minister now admits that the NHS has been damaged by the austerity spending cuts. But the problems with our economy run deeper than brutal political choices to prioritise tax giveaways for the super-rich and giant corporations over spending on public services. They run even deeper than the uncertainty and damage being inflicted by this government’s bungling of Brexit.

This country suffers the lowest rate of investment in the G7. Our infrastructure – the essential networks of transport, utilities and telecommunications – is creaking under the strain, and suffering from decades of privatised mismanagement. On technology, we are falling even further behind, with the latest Organisation for Economic Co-operation and Development figures showing that British manufacturing has the lowest rate of industrial robot use in the developed world – even allowing for the small size of the sector – and spending by business on research is far below the OECD average. Real wages remain lower than they were eight years ago. Yet amid the public squalor and worsening conditions for the many, there are huge new investments in luxury flats and, at least in parts of London, extraordinary private wealth.

When I asked a respected City economist, Graham Turner, and his team to take a look into the functioning of the finance system, it was with this fundamental problem of low investment in mind. Their interim report, published in December, drummed home some startling facts. Our financial system was taking money from manufacturing and lending it to invest in property; promising growth in new tech sectors was overwhelmingly concentrated in and around London; and some of the issues we saw in the run-up to the financial crisis have still not gone away.

The team’s final report is published today, and proposes fundamental shifts in how our financial system is organised. Reform of the Bank of England’s mandate is at its centre. It should retain operational independence, but – more than two decades after this was granted it is time to reassess its guiding principles. – Turner’s team have recommended that alongside the Bank’s existing inflation target it should set a 3% target for productivity growth. This will be backed by new powers that steer the financial system towards investment to maximise productivity growth. The report also proposes that a new government should agree an accord with the Bank, showing how each will work towards achieving that productivity target. And the Bank , they suggest, should be charged with assessing such measures in an annual budget.

Along with other detailed proposals, including the creation of a dedicated applied scientific research fund and a Strategic Investment Board to oversee investment, the authors’ aim is guided by the belief – entirely correct, in my view – that almost a decade after the global financial crisis caused the worst recession in living memory, the time for a fundamental transformation of our financial system is long overdue. It means building on the immense strengths of our financial system, and harnessing them to meet the needs of a productive economy that works for the many, not the few.

• John McDonnell is Labour’s shadow chancellor