Thread by @docrussjackson

Jeremy Corbyn’s plan to rewrite the rules of the UK economy ft.com/content/e1028d…

Financial Times September 2019: "A Corbyn Govt promises a genuine revolution in the British economy. Labour’s leadership intends to pursue not only a fundamental change in ownership & tax but a systemic effort to embed reform in a way that future parties will struggle to unpick."

"At the heart of everything is one word: redistribution - of income, assets, ownership & power. The mission is to shift power from capital to labour, wresting control from shareholders, landlords & other vested interests & putting it in the hands of workers, consumers & tenants."

Tory David Willetts says Brexit has made it harder to paint Labour’s plans as risky. “Brexit is so radical & such a massive gamble, breaking a 40-year trading arrangement, that it’s hard for Tories to say to people ‘don’t gamble on Labour’. They just think: ‘who’s the gambler?’”

'The shadow chancellor John McDonnell - the architect of the economic agenda - has set out plans to build 1 MILLION social homes & sharply increase the minimum wage. But Mr McDonnell, has been careful to avoid causing too many controversies.'

'Plans include the nationalisation of rail, water, mail & electricity distribution companies; significantly higher taxes on the rich; enforced transfer of 10% of shares in every big company to workers; sweeping reform of tenant rights; & huge borrowing to fund public investment.'

"The leadership is also studying an array of even more radical ideas, including a 4-day week, pay caps on executives, an end to City bonuses, a universal basic income, a “right to buy” for private tenants & a shake-up in the way that land is taxed to penalise wealthy landlords."

'To supporters it's about fairness; reorienting an economy that works for those at the top but not for the young, unemployed or those on zero-hours contracts. To his opponents & those likely to be hit (high-earners, business owners, investors & landlords) it is alarming.'

"“Whenever we hold events I always ask, ‘what are you more worried about, a Corbyn govt or a no-deal Brexit?’” says one business lobbyist. “Now the universal answer is Corbyn.” Terry Scuoler, former head of Make UK, describes the prospect of a Labour government as “nightmarish”."

"Already, the shadow chancellor has set out plans for £49bn of new taxes & extra spending a year, borrow £250bn to fund a National Investment Bank, nationalise a swath of utilities, rip up labour laws to help workers, build 1m social homes & sharply increase the minimum wage."

'A central ambition for both the Labour leadership & its union backers is tilting the balance of power away from employers and back towards the workforce. Where ex Labour PM Tony Blair accepted the Thatcherite consensus on union reform, the next Labour government would not'.

Labour would "make it easier for unions to go on strike & extend full employee rights to all workers in the gig economy such as sick pay, parental leave & protection against unfair dismissal. There are plans for workers on boards & even staff votes for leaders of some companies."

"There would be a 20:1 executive pay cap for companies with government contracts. Mr Corbyn dropped plans for a “people’s QE” (printing money to pay for infrastructure)... But he would move the Bank of England from London to Birmingham & parts of the Treasury to Manchester."

"There would be a host of tax rises, including higher income tax for those earning over £80,000, a new “excessive pay levy”, a £5billion-a-year financial transactions tax & a jump in corporation tax from 19p to 26p in the pound."

"Mr Corbyn’s Labour is a far cry from Mr Blair’s “New Labour” of 1997, which sought to convince voters of its moderation. “Back then people wanted to be reassured about things not changing too much,” says one close ally. “This time people do want change.”"

"The financial crisis created the opportunity the Corbynites were waiting for. Its aftermath reinforced the sense of a rigged system, establishing a direct link between the excesses of the financial services industry & the economic travails of ordinary citizens."

'The Labour leadership believes the decade of low interest rates since the financial crisis has been to the benefit of speculators rather than ordinary workers. Many executives have been pleasantly surprised by meetings held with the Mr McDonnell, who pledges to listen to them.'

'Labour has also benefited from the Brexit chaos, which has caused many businesspeople to re-evaluate the @Conservatives' reputation as the party of economic stability. Yet some political analysts argue that the demeanour of a longstanding Marxist should not be misinterpreted.'

"For Labour, Brexit is also an opportunity. In his speech to the 2018 Labour conference: Mr McDonnell noted: “The greater the mess we inherit, the more radical we have to be.” It was at that same conference that Labour unveiled its most daring initiative to date..."

"a plan to seize 10% of the shares in every large company in the country — whether public, private or foreign-owned — & hand them to employees. In reality the workers would not entirely own the shares but would simply be eligible for up to £500 a year each in dividends".

"Calculations by the FT and Clifford Chance can today reveal that the policy, called the “Inclusive Ownership Fund”, amounts to a £300bn raid on shareholders, albeit gradually over 10 years. “It’s the biggest stealth tax in history,” says one former member of Corbyn’s office."

'Other initiatives considered include: breaking-up the Big Four auditors, a ban on all share options/golden handshakes & the public naming of all workers on over £150,000 a year. Companies that fail to meet environmental criteria could be delisted from the London Stock Exchange.'

"Mr McDonnell has dabbled with the idea of a universal basic income but so far has promised only a pilot scheme. He is more excited about the idea of a four-day working week, and has asked Robert Skidelsky, the economist and Keynes biographer, to produce a report."

"Labour would also take an unconventional approach to trade. John Hilary, who is acting international liaison for Labour, has called trade deals a “new form of imperialism” and a type of “plunder”. At one event he said that “we reject the whole principle of free trade”."

'While some in the business community have welcomed Labour’s plans for greater investment in infrastructure projects & its industrial strategy, executives are growing uneasy as they pay attention to the potential impact of a Labour govt in terms of regulation, tax & red tape.'

“I would be worried about Jeremy Corbyn, John McDonnell & Seumas Milne, they don’t give a fuck about the City of London,” says one senior Labour figure. “I think a lot of money would be shifted out on day one. There are a lot of people who are worried..."

"In recent weeks it has become clear to investors in water companies, the National Grid, projects funded by the private finance initiative, and the Royal Mail that a Labour government would not pay them the market price of their shares when nationalisation takes place."

'CBI President John Allan urged Labour in May to drop its “ideological positioning”, warning that nationalisation plans are being watched by investors around the world. McDonnell accused the CBI of ignoring the public clamour for change & “continuing to put shareholders first”.'

'Mr Corbyn openly advocates the nationalisation of parts of the struggling steel industry. Senior Labour officials believe there is a huge public appetite for state ownership of industries: a recent Legatum Institute survey suggested 1 in 4 want nationalised travel agents.'

"For the hard left, this feels like a once-in-a-lifetime opportunity. There is no appetite for timidity. “The last time that an established leading economy tried to go for a proper socialist government was [François] Mitterrand in the 1980s,” says one of Mr Corbyn’s advisers."

“He said in economics there are two solutions: ‘Either you are a Leninist. Or you won’t change anything’. We want something in between, you could — to coin a phrase — call it a Third Way.”