Mcdonnell ready for ‘run on pound’ if elected
Party prepares for ‘assault’ by opponents and looks at disaster scenarios it could face after achieving power
JOHN MCDONNELL has admitted Labour is planning for a “run on the pound” and “capital flight” if the party gets into power.
The shadow chancellor said Labour is preparing for an “assault” by opponents if it is elected and has conducted war game-style planning to see off the threat. Speaking at a meeting of the party’s Left-wing arm Momentum he said Labour is also preparing a series of strategy manuals to cope if things go wrong after the party is elected.
It follows warnings from business and industry leaders that Labour’s economic plans would take the party back to the Seventies, cost billions and send “investors running for the hills”.
Mr Mcdonnell’s plan to scrap existing Private Finance Initiative contracts was also called into question by his own shadow cabinet colleague yesterday as Jonathan Ashworth appeared to water down the plans by claiming only some contracts would be brought under government control. Outlining Labour’s plans for taking office Mr Mcdonnell said he did not expect such a scenario to unfold but the party had to be ready for an “assault” by opponents in the City, media and parliament.
The shadow chancellor, backed by Mr Corbyn, said Labour must be ready for what happens “if they come for us”, adding he is working on “detailed implementation manuals” and drafting legislation so it can “hit the deck running” if elected.
He told a Momentum rally: “It tries to answer the question about what happens when or if they come for us. What if there is a run on the pound? What happens if there is this concept of capital flight? I don’t think there will be but you never know so we’ve got to scenario-plan for that. People want to know we are ready and they want to know we have got a response to anything that could happen.
“If we can demonstrate that, that will calm things down as well because there will [inaudible] have a reaction.” Critics joked that the party was right to plan for capital flight if it is elected because its economic policies are so damaging, but Mr Corbyn insisted that the shadow chancellor’s comments showed that Labour was a serious opposition responsible about preparing for the possible challenges of government.
The Labour leader told Sky News: “What he is doing is saying we look at all scenarios that may affect a Labour government. It is worth seeing these things through. Surely that’s what an opposition serious about getting into government wants to do?”
He told the BBC: “Now, today, in the Treasury, there is a whole team of brilliant people looking at speculation against the pound and runs on the pound that might affect our economy. John is making the point that we have got to look at all these things and all these scenarios.”
Asked whether the scenario of a run on the pound was a realistic one, Mr Corbyn said: “There’s been a run on the pound for the past two years.”
He insisted business should not fear a Labour victory and a wave of nationalisations and tax hikes for the rich: “It’s not going to scare people away, because what we are going to have is an investment-led and productive economy.
“We will invest in skill levels and education in our country. People in poverty and people who are ill are not able to produce as much as those who are not.”