John McDonnell today set out plans for a Labour government to borrow £100bn to put a national investment bank at the heart of economic renewal after Brexit.

The shadow Chancellor pledged to take advantage of record low interest rates to fund a new institution that would invest in infrastructure and support an “entrepreneurial state”.

He gave a keynote speech at lunchtime today when he set out ambitious plans to deliver a “manufacturing renaissance” and boost high-skilled industry as the economy is re-shaped as Britain comes out of the EU.

He set out Labour’s stance of greater state intervention in the economy – Theresa May also moved the Tories towards an industrial strategy – but allied to increased government spending.

“We are setting up a national investment bank. We are putting into that bank £100bn. Yes, that will be borrowed, but it will be borrowed at the cheapest rates in our history,” he told Sky today.

“That will lever in, at the average leverage rate, another £150bn. And we will use that to invest in our infrastructure, in our skills and we will be working with entrepreneurs.

“We want to be what is described in modern terminology as an entrepreneurial state, where the state will work with the private sector, the wealth creators, to develop the products and the markets, and we will invest in the long term.”

McDonnell, who is Jeremy Corbyn’s closest political ally, is expected to retain his position in the event of a shadow Cabinet reshuffle after conference.

He has set out a series of detailed policy positions in the last 12 months – unlike some other shadow ministerial teams – and aims to stimulate wider prosperity amid globalisation, which has left many poorer voters feeling worse off.

Today he gave more detail of his plans for an industry strategy, which was notoriously shunned by former Business Secretary Sajid Javid.

“For decades, manufacturing jobs disappeared as producers looked for the cheapest labour they could find,” McDonnell said.

“Today, one in six manufacturers in the UK are bringing jobs back to Britain.

“That’s because production today is about locating close to markets and drawing on highly-skilled labour and high-quality investment.

“Digital technology means production can be smaller-scale, in smaller, faster firms dependent on co-operation and collaboration, not dog-eat-dog competition.

“The economies that are making best use of this shift are those with governments that understand it is taking place, and support their new industries and small businesses.

“We could be a part of that change here. There is a huge potential in this country, and in every part of this country.

“We have an immense heritage of scientific research, and engineering expertise. Today, our science system is a world-leader. We have natural resources that could make us world-leaders in renewables. We have talent and ambition in every part of the country.”