UK’s Labour says to launch “radical review” of economic institutions

John McDonnell looks set to use his first Labour conference speech as shadow chancellor to push for a “Robin Hood” tax on stock market trading.

Seema Malhotra, Shadow Chief Secretary for the Treasury, said Mr McDonnell is expected to say: “We need to prove we can run the economy again, and do it better than the few who don’t represent the whole nation who are running it now”.

But his predecessor has already warned that Labour risks being laughed at if it tries to persuade voters it has “magical solutions”.

This Econommic Advisory Committee will report directly to Jeremy Corbyn.

As for income tax, Mr Corbyn pledged to lower the rate for the least well off. But he said that he had “no plans” to raise the 50p income tax rate.

In a surprise move, Mr Corbyn also announced that he has recruited one of Nicola Sturgeon’s most high-profile economic advisers.

Mr McDonnell said: “I am delighted to convene this Economic Advisory Committee that will assist in developing a radical but pragmatic and deliverable economic policy for our country“.

Mr Corbyn received plaudits during the leadership election by standing on a stronger anti-austerity platform than his rivals.

Mr Corbyn said: “I was elected on a clear mandate to oppose austerity and to set out an economic strategy based on investment in skills, jobs and infrastructure”.

“Second point, they are cutting corporation tax from 20% to 18%, doing very little about companies that offshore their head offices, Boots and others, to Switzerland and other places to pay lower tax. But when you cut the overall rate of inheritance tax that means that the very richest become richer because of it”.

But critics, including the then shadow chancellor Chris Leslie, said it was not a plausible policy and would not work.

He also urged Mr Corbyn and Mr McDonnell to tone down “aggressive” rhetoric which would put business off the party.

Economist Richard Murphy, an early inspiration for so-called Corbynomics and “People’s Quantitative Easing”, told Sky News that much of the economic strategy of the new Labour leadership was dependent on there being another economic crisis.

Also on the panel are University of Sussex professor Mariana Mazzucato, Anastasia Nesvetailova of City University London, former Bank of England economist Danny Blanchflower, Ann Pettifor of Policy Research in Macroeconomics and the University of Oxford’s Simon Wren-Lewis.

An SNP spokesman said:”Given that John McDonnell has just confirmed he still supports George Osborne’s fiscal charter, people across the United Kingdom will be hoping that his advisers will convince Labour of the folly of continuing with Tory austerity policies”.