Shadow chancellor’s plan to steer UK away from gig economy with £10 minimum wage will resonate but national pay bargaining via the unions is delusional

John McDonnell reflected the feelings of more than just the Labour conference when he said the free market must be brought to heel. He was speaking for much of the country when he said the drift towards a zero-hours, piece-work economy needed to be eliminated.

To this end the shadow chancellor suggested a minimum wage of £10, with government support for those sectors that would struggle to pay. The figure is above the £8 put forward by former Labour leader Ed Miliband at the last election (as a target for 2020) and the £9 promised by former chancellor George Osborne.

McDonnell is convinced it would mean no more Mike Ashleys, whom he singled out for breaching minimum wage rules in his Sports Direct distribution centres.



He also pledged there would be no more Sir Philip Greens, after the Tophop owner walked away from his BHS department stores and 11,000 staff after sucking away hundreds of millions in special dividends from the business.

Under a Corbyn-led Labour government, a repeat of the BHS debacle would be met with a new law banning firms from paying excessive dividends to offshore owners, McDonnell said.

And tax avoiders will be confronted by a beefed up HMRC with double the number of investigators.

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These clampdowns on undesirable behaviour will be the springboard to an entrepreneurial state that “will work with wealth creators” with government-backed investment institutions in every region, business hubs in “every town and city” and 200 newly minted energy companies to support a push for renewable energy across the country, “to break the monopoly” of the big six electricity and gas suppliers.

Yet, when he pledged that a Labour government would reinstate trade unions at the heart of all pay negotiations with the adoption of a national system of industrial and sector wage bargaining, there must have been a collective shiver down business leaders’ spines. It’s not so much a punishment as a step back into a sclerotic model of business.

The CBI and Institute of Directors have lobbied hard against what McDonnell unashamedly called a socialist programme, one that ties wage rises to agreements with union leaders. Only a deluded politician would think he could sit round the table with business groups and hammer out a national pay bargaining scheme.

If there is free money on offer from the Treasury and a new business investment bank, they will be interested. But not if the price is Len McCluskey sitting in their lap.