Labour shadow chancellor John McDonnell tells finance bosses there's 'nothing up his sleeve'

'Come in and advise us. If you don’t like the policies we’re using to achieve our objectives let me know and we’ll discuss them. If there’s another way that’s more pragmatic we’ll do it.’

Ben Chu
Economics Editor
@Benchu_
Wednesday 31 October 2018 13:00
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John McDonnell says Labour 'are ending the profiteering in dividends, vast executive salaries, and excessive interest payments'

Labour’s shadow chancellor, John McDonnell, has told finance chiefs there is “nothing up my sleeve” and even offered to alter the party’s policies in response to their advice.

Mr McDonnell met with a group of representatives of financial firms and other companies in the heart of the City of London on Wednesday as part of the shadow chancellor’s ongoing efforts to overcome the deep distrust – and often outright hostility – of the business sector towards the opposition party and its leadership.

“All the asset managers, the bank managers – what we’ve been saying is that what you’ll get from us is certainty. There’s nothing up my sleeve,” he told journalists.

“We’ll publish everything in advance – what the policies are, what the costings are, where the funding will come from. Some things you [finance and businesses] will like because you will get a good rate of return on your investments. Some things you won’t but will happen – and we believe, at the end of the day, will provide the quality of life that you will want to enjoy in this country.”

“Goldman Sachs came to see me about Brexit. I met people like Schroders, because of their influence on shareholders. I’ve been meeting with some pension funds themselves – a whole range of people.”

“For me a lot of it is listening to their ideas and long term plans. I say, ‘come in and advise us. Here’s our objectives, if you’re not keen or if you don’t like the policies we’re using to achieve those objectives, if there’s another way of achieving those objectives let me know and we’ll discuss them. If there’s another way that’s more pragmatic we’ll do it.’”

Mr McDonnell, who once listed one of his interests as “generally fermenting the overthrow of capitalism”, argued that Labour was offering more certainty to businesses than the Conservatives, whose policy of leaving the single market and customs union and countenancing of a “no-deal” outcome is a source of profound concern for business.

“What they’re not getting back from the Government is certainty about Brexit – but also certainty about where the Government is going on a number of individual domestic policies as well,” he said.

Labour’s 2017 manifesto pledged to “extend” stamp duty to ensure the financial sector pays a greater share of its profits in tax. It also mooted breaking up the Royal Bank of Scotland and set out a goal of “transform[ing] how our financial system operates”. Most bankers and asset managers would be personally hit by the party’s policy of introducing a new 45p rate of tax for those on more than £80,000 a year.

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Despite Mr McDonnell’s attempts to build bridges, Labour has had an extremely fractious relationship with business.

Last year the CBI’s director general said that the party’s nationalisation agenda and suggestion that existing PFI contrasts could be simply torn up would “send investors running for the hills”.

And the party leader, Jeremy Corbyn, took pride 12 months ago when an analyst at the Wall Street bank, Morgan Stanley, said a Labour government was a risk to investors.

“When they say we’re a threat, they’re right. We’re a threat to a damaging and failing system that’s rigged for the few,” Mr Corbyn said in a social media video message.

Earlier that year, Mr McDonnell said Labour had a “scenario plan” for a run on the pound in the immediate wake of a Labour election victory, although he added that he did not think a currency collapse was likely.

Asked about the possibility of Labour supporting a second referendum on Wednesday, Mr McDonnell said that Labour would push first for a general election.

“If they won’t give us a general election, yes, there’s a potential for another vote and Parliament will decide what’s on that ballot paper. But there’s a lot of stages to go before that. We think there’s a deal to be had if the Government sensibly negotiates.”

Mr McDonnell’s meeting took place at the headquarters of the global media group Bloomberg, close to the Bank of England. Among the finance groups listed as invited were Aviva, Prudential and the Investment Association, as well as representatives from Pfizer, Skanska, John Lewis, Virgin Media and the Crown Estate.

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