Brexit Risks Prompt Labour Opposition to Demand U.K. Investment

  • McDonnell urges Hammond to end austerity in Autumn Statement
  • Labour to offer ‘new deal’ to business on industrial strategy

John McDonnell, the economy spokesman for the U.K.’s opposition Labour Party, will call on Chancellor of the Exchequer Philip Hammond to end austerity, reverse benefit curbs and boost funding for public services in response to the economic risks of Britain’s vote to leave the European Union.

In a speech in London on Tuesday, McDonnell will also say that a Labour government would offer a “new deal with business,” as it seeks to deliver an industrial strategy to meet the “real needs of society” amid technological advances that are reshaping the economy.

Hammond must not be allowed to use Brexit as cover for further cuts and under-funding, McDonnell will say, according to extracts of the speech released by his office. Labour is also pressing for a more rigorous crackdown on tax avoidance.

“We will be left with a Brexit that works only for bankers and the rich, instead of one that’s based on fairness and works for the rest of us,” he will say. “We want to see an end to tax giveaways for the wealthy and we need a serious commitment from government to invest across the whole of our country.”

Hammond will deliver a mini-budget, known as the Autumn Statement, on Nov. 23 and McDonnell will seek to capitalize on reported splits in Prime Minister Theresa May’s cabinet about the best way to navigate Britain’s divorce from the EU.

“We appear to have a chancellor who is slapped down by his prime minister when he makes an announcement and ignored by her as she sets his economic policy for him,” McDonnell will say. “Britain cannot afford a weak chancellor who cannot find his voice, when our country faces the biggest economic challenges for a generation. It’s time he steps up to the task, and stands up to his cabinet colleagues.”

Labour would work “with all sides in our society -- the businesses, the customers, and the workers -- to develop a clear vision and plan for the future,” McDonnell will tell his audience. “We’ll offer businesses the education and training their workers need, and the infrastructure they are crying out for, and in return we’ll ask them to pay their fair share.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE