During his campaign for the Labour leadership, Jeremy Corbyn had claimed that £120bn could be recovered from tax avoidance and evasion, which he said would be enough to pay off the UK’s deficit without having to make welfare and public spending cuts. “Working alongside world leading economists Labour will present the coherent alternative our country desperately needs”.
SNP depute leader Stewart Hosie said: “Mr McDonnell’s comments confirm that when it comes to Scotland Labour haven’t changed”.
“There is now a brilliant opportunity for the Labour Party to construct a fresh and new political economy which will expose austerity for the failure it has been in the United Kingdom and Europe”, Piketty said in an e-mailed statement.
“I’m hoping that a progressive Labour party under Jeremy Corbyn might be a good partner for us in making that case even more loudly to the government“, she added.
This last point was one of the main tenets of his speech – an insistence that the deficit could be tackled but not by using the Tories’ austerity measures.
He acknowledged that fierce debates over Labour’s future direction lie ahead, but insisted that these should not be interpreted as splits in the party.
Mr McDonnell declared Labour the “only anti-austerity party”, but pledged the party would “always ensure that this country lives within its means”.
He said there would be cuts to tackle the deficit.
Mr McDonnell declared to applause: “Labour’s plan to balance the books will be aggressive”.
John Mills, the direct shopping magnate and owner of JML, who also happens to be one of Labour’s largest donors, said the speech was well drafted but failed to address how the United Kingdom economy will continue to grow.
Mr McDonnell told ITV News: ‘We’re a new party now, virtually.
He continued: “On behalf of this party I give those children my solemn promise that when we return to Government we will build you all a decent and secure home in which to live”.
Concerns were raised over the shadow chancellor’s decision to name and shame companies like Starbucks, Google and Amazon over their tax arrangements, the prospect of increased state intervention in business and the affordability of higher rates for the minimum wage.
McDonnell is also expected to announce that Labour is launching “a radical review of the national institutions that manage our economy”, which would include Revenue & Customs focusing on ways it could improve tax collection from firms and individuals.
“I was glad to see in the small print that [McDonnell] made a distinction between the current account and investment and I’m glad to see that he’s still talking about borrowing to invest in jobs”, said Lucas.
It is the entrenched view of Nobel prize-winning economist Joseph Stiglitz, whom McDonnell has just appointed to an advisory committee.
He accused the Conservatives of trying to make middle-earners and the poor bear the burden of eliminating Britain’s deficit, while protecting the richest from the consequences of the economic crisis.
Promising a huge extension of union power in workplaces, Mr McDonnell said: “A successful and fair economy can not be created without the full involvement of its workforce”.