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Labour is preparing for run on the pound if it wins power, says John McDonnell

'We've got a scenario plan for that,' says shadow Chancellor

Benjamin Kentish
Tuesday 26 September 2017 18:59 BST
'People want to know we are ready and they want to know we have got a response to everything that could happen,' Mr McDonnell said
'People want to know we are ready and they want to know we have got a response to everything that could happen,' Mr McDonnell said (Pete Maclaine / i-Images)

Labour has prepared for a run on the pound and capital flight if it enters Government and has consulted experts about how the party should respond, John McDonnell has said.

The shadow Chancellor told party activists they should be prepared for an “assault” by opponents in the City, the media and in Parliament that could have economic consequences.

He revealed that extensive plans are being made for Jeremy Corbyn entering Downing Street, including contingency planning for a scenario in which a Labour victory triggers a fall in the value of the pound.

Speaking at a fringe event at Labour’s annual conference in Brighton about the early days of a Labour government, Mr McDonnell said: "What if there is a run on the pound? What happens if there is this concept of capital flight? I don't think there will be, but you never know, so we've got to scenario plan for that.

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“People want to know we are ready and they want to know we have got a response to everything that could happen.

“Because if we can demonstrate that, that will calm things down."

The shadow Chancellor revealed he has ordered comprehensive planning for how Labour’s policies will be implemented if Jeremy Corbyn enters Number 10.

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He said: "People want to know we're ready, and they want to know we've got a response to anything that could happen.

"What we're doing now, we're taking every policy commitment within the manifesto and we're looking to develop detailed implementation manuals.

"That's the sort of bureaucrat I am… that's the sort of bureaucratic work that has to be done in the preparation of almost a traditional government.”

Mr McDonnell said that, had Labour won the general election in June, it would have already introduced new taxes as part of measures aimed at raising £48bn.

He said the party had planned to unveil a budget by the end of July had it won the election. The blueprint would have included legislation for a financial transaction tax and measures to crack down on tax avoidance.

Mr McDonnell told Labour members they should build support in wider society in order to "build up a base" that can help the party withstand the "potential assault" he said a Labour government would face.

A spokesperson for Mr McDonnell later appeared to row back on the Shadow Chancellor's comments.

They said: “This was an exercise not done by us, but by members. The scenarios were to deal with numerous events such as national disasters and acts of terror that could occur under any government."

At the same fringe event, Len McCluskey, leader of the Unite union, said he was unlikely to see many of the first days of a Labour government.

"I suspect I will be drunk for 100 days,” he said.

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