McDonnell pledges tax drive against multinationals

Labour’s new shadow chancellor John McDonnell has vowed to balance the books with a new “aggressive” tax drive against major multinational corporations and reverse cuts to benefits for the poorest in the UK.

Shadow chancellor John McDonnell makes his keynote speech to the Labour Party annual conference. Picture: PA

In a sign that Labour is to tack hard to the left, Mr McDonnell used his first conference speech to blame the Tory government for suicides of those who have lost benefits and putting the burden of austerity on low and middle earners.

He said he would bring down the deficit and balance the books but insisted that this would be achieved by raising taxes on the richest and targeting companies which he claimed avoided tax, pointing the finger at Starbucks, Vodafone, Amazon and Google.

His accusation was denied by Vodafone and he also admitted that Labour needs “to prove its credibility” with voters on the economy.

Mr McDonnell told Labour’s annual conference in Brighton that the party would not be “deficit deniers”. But rather than following the Conservative route of austerity, Labour will balance the books by targeting corporate tax avoidance and subsidies for companies and by stimulating economic growth.

“Austerity is not an economic necessity, it’s a political choice,” he said.

“The leadership of the Conservative Party made a conscious decision six years ago that the very richest would be protected and it wouldn’t be those who caused the economic crisis who would pay for it.

“Although they said they were One Nation Tories, they’ve demonstrated time and time again, they don’t represent one nation, they represent the one per cent.”

Mr McDonnell said: “I tell you straight from here on in Labour will always ensure that this country lives within its means.”

He also vowed to “the 100,000 children in homeless families” to start a major housebuilding program to give them all a home.

He also promised major institutional reform saying that the former head of the civil service Bob Kerslake will conduct a review of the Treasury for him and suggesting that he will end the independence of the Bank of England.

But the Tories accused him of threatening families’ financial security.

Financial Secretary to the Treasury David Gauke said: “Labour’s tax rises would hurt hardworking people, threatening every family’s security.

“And as Mark Carney has said, Labour’s policy to end the Bank of England’s independence and print money would drive up the cost of living.

“That’s why Labour are a serious risk to Britain’s economic security.”