A Jeremy Corbyn-led Britain would usher in “socialism with an iPad,” Labour’s Shadow Chancellor has pledged as he set out his vision to make Britain a leading power in technology alongside new safeguards for the army of online and self-employed workers.

John McDonnell said he wants to see the UK economy more diversified and make sure it is not only the financial centre of Europe but its technological capital too.

In a speech ahead of George Osborne’s Spending Review next Wednesday, Mr McDonnell also warned that the Government’s failure to invest in infrastructure was threatening the future prosperity of the country, pointing out that infrastructure investment under the Tories had fallen to 1.6 per cent of GDP. 

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He vowed to spend at least 3.5 per cent of UK GDP on infrastructure if Labour is elected into Government in 2020. 

While acknowledging the new opportunities that the internet had created for entrepreneurs, he said they must be accompanied by new measures to protect workers in these industries.

Mr McDonnell said online enterprises and mobile applications such as Airbnb, which allows people to temporarily rent out their homes, were part of the so-called “gig economy” that allowed us to make “better us of the assets we own” but warned that they also posed new threats to workers due to the casual nature of working in the online industry. 

“Meeting the challenges of the future requires a state that can think and act strategically,” he said in a speech at Imperial College, London on Friday.

“We need to ensure that we exploit these possibilities in a way that creates, and does not restrict, opportunities for workers.

“To facilitate this, we must re-establish a system of worker participation in management, with a supply chain of information between shop floor and government that brings workers and unions together to advise policymakers on the future direction of the economy.”

"Technological change, and the unfettered free market, are tearing up the old work contract. Labour, instead, will offer a new contract for a new workforce," he said. 

"Security of income against uncertainty. The same rights and protections extended to all those at work. This is why the fight over tax credits matters so much."

Mr McDonnell's speech was welcomed by some in the business community, with the Institute of Directors praising his focus on adapting the economy for the future but warned that his "heavy-handed regulation would stifle opportunity". 

James Sproule, Chief economist at the IoD, said: “It’s absolutely right that John McDonnell is talking about the ways in which technological change is opening up new opportunities for wealth creation and altering the world of work.

"These are exciting times, with UK consumers enthusiastically adopting new technologies. An entrepreneurial revolution is taking place, with more and more people deciding they do not want the traditional employer-employee relationship.

“The Labour party must view these as positive developments to be encouraged, not threats to be regulated away. Rather than trying to regulate business to conform to one particular view of what is ‘ideal’, politicians should be looking at how they can enable more people to take advantage of more flexible ways of using their skills and assets.”   

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