Labour would introduce a kitemark system to recognise businesses that pay fair wages and meet their tax obligations, the shadow chancellor has said.
The party’s attitude to business was one of the key battlegrounds during the leadership contest in the summer, with Jeremy Corbyn’s criticism of “corporate welfare” contrasting with his rivals’ praise for “wealth creators”.
But John McDonnell used a speech at the London Chamber of Commerce and Industry on Wednesday to argue that good businesses should be praised – and receive an official imprimatur.
“Those businesses who pay their taxes transparently and properly, and who pay their employees at least the living wage, deserve proper, public recognition. It’ll be open to any business that wants to apply.” he said. “We think it’s dog eat dog. But real wealth creation isn’t about some desperate war of all against all.”
He stopped short of echoing Ed Miliband’s promise in the general election manifesto to use billions of pounds’ worth of public procurement projects to try to force firms to pay the living wage and recruit more apprentices.
McDonnell faced criticism over his response to the chancellor’s spending review, when he sought to highlight asset sales to China by brandishing Chairman Mao’s little red book.
In Thursday’s speech, he reiterated Labour’s opposition to renewed spending cuts. “There is no credible economic case of austerity and there never has been,” he said. “We think the tide is turning on this question as the real impacts of extraordinary spending cuts become clear.”
The shadow chancellor said Labour would review the complex system of tax reliefs, which businesses and wealthy individuals could use to reduce their payments to HM Revenue and Customs. “Tax reliefs have grown into an unmanageable thicket of different schemes and wheezes. This tangle is estimated to cost the taxpayer at least £110bn a year. Labour thinks it’s time for a pruning.”
He also promised that a Labour government would cut business rates – a pledge from the party’s manifesto – and boost investment on infrastructure. “In place of austerity, Labour will seek to balance spending on the government’s day-to-day at a pace compatible with fair and sustainable growth, while making sure government can still use its full powers to invest in vital infrastructure, science and skills.”
