Below is the full text of John McDonnell’s speech on the economy, delivered Liverpool.
Thank you. It’s so good to be home again in the city of my birth. My scouse predecessors like so many others in this city were originally economic migrants. They came across the Irish sea from Drogheda looking for work. Looking to work their way out of poverty. And my goodness they worked.
Just down the road from here, my grandad and my dad worked on the docks. I can still remember – even though I was a small child – that my dad used to have a hook hanging from his belt, a docker’s hook used to grip bales as they were loaded on and off the ships on the Mersey.
Thousands of tonnes of goods going in and out of the port every day, provided thousands of jobs, keeping thousands of families just above the watermark. Until the jobs dried up and like so many others, my family moved south looking for work.
What happened to the Liverpool docks and to Liverpool is what happened to so many cities and communities across the North and Britain. Traditional industries declined and little was done to replace them. Old skills were lost and new skills were not invested in. Successive Labour governments sought to engage and invest, only to see their efforts swept aside when the Tories took charge.
I know that people here, especially in Liverpool, well remember the last time the Tories were in charge and the damage they did not just to this city but to the North overall.
Communities smashed apart, pride ripped out of towns and cities across the country. Arrogant complacency, neglect and a lack of care summed up by phrases like “there is no alternative” and “it’s just the nature of change”. As if ‘change’ must always mean fewer jobs or worse paid jobs.
The Tories are always the same. In the 80s it was dole queues and sky-high inflation Now it’s zero hours contracts, universal credit (UC) and food banks. And if they win again it’ll be more of the same. Slashing inheritance tax for the richest, despite an ever-deepening crisis in our care homes and a crumbling public transport system. A hard-right Tory Brexit smashing a hole in our public finances.
They treat us all with contempt. They think people are stupid. That with Brexit on the agenda, they think we’ll all forget about the past ten years and the prospect of the next five years if they get back.
But whatever they say, there is an alternative. The chance now to change things dramatically and permanently for the better. Labour’s message is one of hope. That another world is possible.
Because this election isn’t just about the next twelve months of the Brexit withdrawal agreement, or even about the next five years. It’s about the next ten years. It’s about future generations. And the future of our country and our planet. Everything we hold dear. A once-in-a-generation chance to get back on track, remake this country and transform everyone’s lives for the better.
I’m not rose-tinted about the past. I still remember the conditions my family first lived in and how hard my parents like so many others had to work to just get by. But this city and this country have a proud industrial history which has been taken away by successive governments.
After years of being held back those cities and towns will need radical change to undo the damage that’s been done. Our aim as a Labour government is to achieve what past Labour governments have aspired to. An irreversible shift in the balance of power and wealth in favour of working people.
That means change, which means investment on a scale never seen before in this country and certainly never seen before in the North and outside of London and the South East.
To achieve that objective also requires therefore an irreversible shift in the centre of gravity in political decision making and investment in this country from its location solely in London into the North and regions and nations of our country.
So on the scale of change investment needed I can tell you today that Labour’s ‘national transformation fund’ will be bigger than we promised at the 2017 election. For areas that haven’t had their fair share for years.
We’ll deliver £250 bi of investment here and around the country over the next ten years through our ‘green transformation fund’. Upgrading our energy, transport and other networks. To meet our targets and decarbonise as thoroughly and fast as our commitment to a just transition will allow.
But it’s not just the natural world that’s been neglected. So we’ll also commit to an additional £150bn in a new ‘social transformation fund’ spent over the first five years of our Labour government.
The social transformation fund will begin the urgent task of repairing our social fabric that the Tories have torn apart. £150bn to replace, upgrade and expand our schools, hospitals, care homes and council houses. To deal with the human emergency which the Tories have created, alongside the climate emergency.
Those twin challenges are an opportunity for our country. A once in a lifetime opportunity to upgrade our infrastructure for good, because we have no choice. We have to do it. If we are to stand any chance of tackling climate change. If we are to stand any chance of providing a decent quality of life for all our people. If we are to have any hope of bringing communities back together.
We have to act now and act big and decisively.
All of these initiatives are to be linked in a comprehensive programme to transform our economy and lives. Those who need jobs linked with the need for new wind turbines. Those with ideas for new green technologies linked with areas where manufacturing investment has become for many a grandparent’s memory.
That means making sure – as we transition away from fossil fuels to green energy sources – that those new jobs are located in communities where they’re needed. With the investment in skills to go alongside investment in infrastructure.
Not building wind farms in Scotland with components shipped in around half the world while yards making the same components stand idle in Fife. It means bringing 27 million homes across the country up to energy efficiency standards. Saving everyone money on their bills and reducing our carbon footprint.
It means a ‘national investment bank’ and a network of regional development banks – including one for the North West. Using the power of government to raise money nationally and internationally. And new banks – including our ‘post bank’ – to pass that on into the hands of communities.
But it’s not just about spending more. It’s about how it’s spent. With decision-making devolved down to local communities. So we’ll carve out part of our national transformation fund for a local transformation fund in each of England’s regions with money for the devolved governments as well of course.
And that money will be ringfenced for infrastructure projects decided and developed at a local level, with decisions made transparently and democratically in each region about how their fund is allocated.
And regional offices of government departments overseen by a board of local county and city council leaders, with that board publicly accountable to open meetings of local councillors, trade unions and business representatives.
They will be supported by a national transformation fund unit of the Treasury. I can confirm that this powerful section of the Treasury Unit will be based here in the North. At the same time my Treasury ministerial meetings will no longer be solely in London.
Labour’s Treasury ministers will meet outside of London and will have a ministerial office in the North. The centre of gravity, of political gravity, is shifting away from London. This is where the investment is needed and this is where those decisions on investment need to be made on the ground. Power is coming home. Back to the people.
We can only deliver the real change we need by putting power into the hands of communities, of the people who know their local area best. Like those who came up with the tidal barrage idea for the Mersey, which we’ll build.
It won’t just be public investment, of course. We can’t do it if the private finance sector isn’t pulling its weight too. So the days of the City dictating terms to the rest of the country are over.
The finance sector will be brought in line with the rest of us in addressing the emergency, with an end to short-termist thinking. The thinking that only prices in risks associated with an investment here and now. Rather than the potential for a dramatic change in the price of carbon investments, leading to significant stranded assets.
It’s not just the short-term thinking of the finance sector that needs to change. Nothing shows the short-sighted short-termism of the Tories more than their approach to university tuition. We know it will cost money to make tuition free again, and we’re up front about that – costing it in our ‘grey book’ at the last election as we will at this election.
But the Office for Budget Responsibility’s (OBR) restated forecast, which was meant to be published today, was expected to show tens of billions more borrowing. Because the Tories designed an expensive student loan system that hid the costs off the books.
They got caught out in the end. Too late for the millions who’ve racked up tens of thousands in debt at eye-watering interest rates. That’s what happens when you design fiscal rules to minimise the costs on one side of your balance sheet. Ignoring the benefits on the other. Labour won’t make that mistake.
And I can tell you that our fiscal rule for the next Parliament will exclude borrowing for investment from our borrowing targets. It will mandate us to deliver an improvement in the overall balance sheet by the end of the Parliament. So that when we invest in the infrastructure our country desperately needs, it’s recognised both as a cost and as a benefit.
Yes – adding to the government’s debt but also adding to the government’s assets and strengthening our public sector to deal with the future. With the rents on our new council homes and the electricity produced by our public sector energy agencies set against the cost of servicing the debt issued to build them. And a ceiling on that debt servicing cost – in normal times – of 10% of tax revenue.
On this at least there’s nothing radical, just common sense.
What families and businesses do every day when weighing up an investment. After the corruption and lies of the Tories we need government – and those who want to be in government – to be transparent as possible.
So today is just the start. We’ll lay out our full tax and spending plans as we go along and in our fully-costed manifesto. Underpinned by a cutting-edge fiscal rule that enables us to borrow for productive investment
The choice isn’t just clear. It’s historic.
On one hand, the Tories, the very people who have just inflicted nearly a decade of harsh, brutal and unnecessary austerity cuts on our community, the people who starved our NHS, cut school budgets and sacked police officers are all of a sudden gushing with election stunt offers of spending more. They take us all for fools.
Judge them on their record and their actions, not on their election gimmick false promises. You can’t trust a word they say. You know that if they get back we all risk five more years of cuts, falling wages, Trump trade deals and a rising state pension age.
On the other hand, we have the chance of real change. A decade spent rebuilding our society and saving our planet for our children and grandchildren. Building the homes we need. Investing to create the well-paid jobs, secure with the restoration of trade union rights. Creating clean green energy and transport networks.
That change begins with voting Labour and electing a Labour government with Jeremy Corbyn at the helm. But it carries on long after that, until we create a radically transformed society with restored pride in every part of the country.
Real change made permanent and delivered together.