John McDonnell: Labour Has Fight On Its Hands To Win Back Economic Credibility

John McDonnell: Labour Has Fight On Its Hands To Win Back Economic Credibility

Labour is facing its most important fight for a generation as it battles to win back economic credibility, the shadow chancellor will say.

John McDonnell will insist the party is committed to bringing day-to-day government spending into the black but admit his party faces a struggle to win over the confidence of voters.

Labour will look at "how assets are owned and shared" and who creates wealth as part of a review to create a more efficient economy, he will say.

In a speech to the LSE, Mr McDonnell will say: "Labour has a fight on our hands to win back economic credibility, but it's the most important fight in a generation.

"We need to begin by underlining our commitment to bringing the government's day-to-day spending into balance.

"We know the importance of borrowing for investment, which lays the foundations for future economic prosperity.

"Few things are more urgent than delivering the infrastructure our economy is crying out for, infrastructure which pays for itself by expanding economic activity and raising tax revenues.

"But this is still just the very beginning."

He will call for a "complete rethink of not just how we spend money but how we earn it" with structural reforms of tax, investment and financial systems.

"But still we need to look deeper at the fundamentals of our economy, how assets are owned and shared, how wealth is created and by whom," he is expected to add.

"Moving away from the image of a party which thinks only about how much it can spend, to a party that is focused on how we earn."

Mr McDonnell will accuse Chancellor George Osborne of imposing austerity measures as part of a "casino economy" that requires low state spending to free up money for future bailouts.

"Austerity is about cutting the public sector down to size, in case of further financial crises," he will say.

"It is a profoundly conservative choice since it works to the benefit of the UK's vested interests.

"Finance must be allowed its position in the driving seat.

"Multinational corporations must be allowed free reign, virtually setting their own tax rates, just as Google have done.

"It means doing nothing about the problems and long-term weaknesses that led to the crisis of 2008.

"And it means leaving society dangerously exposed to the new challenges."

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