Business wary as Shadow Chancellor sets out stall at Labour Conference

Newly-appointed John McDonnell made his conference debut as shadow chancellor today with attacks on big business and buy-to-let landlords, as well as a hint that the Bank of England’s mandate might be up for discussion we found out what business thought of the man who might control our finances one day.

The Institute for Chartered Accountants in England & Wales (ICAEW) hailed the speech as starting “A new era of politics”

Fixing our public finances is dependent on generating sufficient tax receipts, so we are pleased that our calls for more resource for HMRC to concentrate on tax avoidance have been heard. Reviewing the Bank of England’s mandate is perfectly reasonable after 18 years, as is looking at the Treasury. We have suggested that Treasury must be transformed into a modern finance ministry, with responsibility across all parts of Whitehall.

We are in a new era of politics, and the Shadow Chancellor spoke of the need for debate. It will be interesting to see what policies Labour come up with in the months and years ahead. Businesses across the country will welcome the opportunity for debate going forward.

CBI director general John Cridland said: “The overall impression of this speech was of rather more intervention in the world of business and the economy.

“What’s clear to us is that you can’t be pro-growth and pro-jobs without being pro-business. And a thriving private sector is essential for raising living standards and paying for high-quality public services.”

Singling out individual companies for criticism was “not the best way of signalling a partnership approach with business”, said Mr Cridland.

Lee Hopley, chief economist at manufacturers’ organisation EEF, said: “Most businesses pay their taxes and the debate on doing more to get a fair share from the corporate sector must go hand-in-hand with ensuring that the UK is a competitive magnet for investment and that future tax policies will offer businesses predictability and stability.

“With the National Living Wage set to be introduced from April 2016, and its rate representing an 11% rise over the current national minimum wage, now is the time to ensure that this change supports both the low paid and the businesses which they work for. Now is not the time to pencil in further rises beyond those already signalled by the current Government.”

John Longworth, director general of the British Chambers of Commerce, said Labour “must not confuse supporting growth with state control over the economy”.

“John McDonnell is right to go back to first principles and review the shape of the UK economy,” said Mr Longworth. “He is right to start fundamental reviews of how the Treasury and the Bank of England work. He is right to engage economic experts to look in detail at how the state can better support economic growth.

“However, he must not prejudge these reviews – or insist on attacking businesses and wealth creators, when a conversation is what is needed. Labour needs to get the tone right if it wants to build a partnership with business, in the national interest.”