‘Market not always right’

Labour’s shadow chancellor John McDonnell joined renowned economist Ann Pettifor at Unite’s policy conference on Thursday (July 5) to call for a radical rethink of the Tories’ failed economic policies.

“This idea that the market is always right — that somehow if you cut taxes to the rich it will trickle down to the others as well — we know that’s not true,” McDonnell said. “And we know that’s not true because we have 5,000 homeless sleeping in our streets at the moment.

“We know that’s not true because we know only three months ago a homeless person died only feet away from the entrance to Parliament,” he added.

“We know it’s not true because there’s a million people who received social care and they don’t anymore. We know it’s not true because two thirds of the 400,000 children in poverty are in households that work and wages are so low.

“That whole system — that whole line of thought — has been discredited.”

Pettifor likewise dismissed the neoliberal dogma that’s dominated economic thinking for the last four decades. She pointed out the lie that the government doesn’t have the money to invest in jobs, public services, and infrastructure and to transform our economy into one that contends with the massive threat of climate change.

“The country believes that we have no money, that we’ve run out of money, that we have no resources,” she said. “That’s a lie and we know it’s a lie because someone found £1000 billion pounds to bail out the City of London, which is almost the total of our annual income.”

Pettifor, who is widely credited for predicting the financial crisis, said that it was jobs that power an economy that works for everyone, not just for a wealthy elite.

“Jobs generate income, but not just for you,” she explained. “The government gets income as well in tax revenue. When people spend, they also get revenues for VAT. Whatever firm they are spending with, the government gets more money in corporation tax.”

“That’s how we balance the books — by creating employment.”

Small elite

The monetary system has been “turned over to a small elite,” she said, highlighting how money now is funneled into property speculation that makes the economy unproductive. “We have to take our monetary system back.”

McDonnell agreed, and outlined how a Labour government would take this “monetary system back” to ensure “prosperity is shared by everybody.”

Labour would implement a fair taxation system that would make the top 5 per cent pay more in tax. This, he said, would ensure that the NHS is properly funded. Labour would tackle the housing crisis head-on by investing in a housebuilding programme that would ensure at least half of the million homes built would be council homes.

He underlined the importance of an industrial strategy in which a future Labour government would again plan the economy — with trade unions as partners — to bolster the UK’s key industries and create highly-skilled and well-paid jobs. The public sector pay cap would also be scrapped, and Labour would introduce a new real living wage of at least £10 an hour to reinvigorate the economy.

Turning to Brexit, McDonnell pointed out that Labour will fight tooth-and-nail against any Tory deal that threatens jobs and investment. He called on the government to either “do the deal or get out of the way and let Labour do it.”

McDonnell pledged that trade unions would play a central role in Labour’s future plans.

‘A different type of government’

“We will be a different type of government,” he said.

“It will not just be a small group of MPs administrating centrally from above. When we go into government we all go into government, and this trade union goes into government with us,” he added to rousing applause.

“You will have a direct say in our policy,” he told delegates to a standing ovation. “We will no longer be a Labour party that somehow looks at the trade union movement as an embarrassing relative. You founded us and you will be part of us for as long as the Labour party exists as a socialist party.”

John McDonnell spoke to UniteLive after his speech in the video below: