Insider Economy No one needs to be a billionaire, Britain's Labour Party says

No one needs to be a billionaire, Britain’s Labour Party says

Britain’s opposition Labour Party on Tuesday took aim at “obscene” billionaires, pledging a radical redistribution of wealth to cut the power of the super rich and to introduce policies including a pay cap at some companies.

The two main political parties are showcasing starkly different visions for the world’s fifth-largest economy ahead of the Dec. 12 election. The Conservatives are promising to deliver Brexit while Labour says it wants to be the most radical socialist government in British history.

John McDonnell, the party’s finance spokesman, said in a speech he wants to “rewrite the rules of our economy“, casting the election as a chance to overthrow a system which profits by exploiting workers and where billionaires can buy access to power.

“No one needs or deserves to have that much money, it is obscene,” McDonnell said. “It is also obscene that these billionaires are buying access and tax breaks to Boris Johnson’s Conservative Party.”

Labour’s core message – a pledge to redistribute wealth to the many and not the few – was a theme it used in the 2017 election, when the party confounded the polls to deprive then Prime Minister Theresa May of her parliamentary majority.

Labour hopes the message will propel them to power as they trail Johnson’s party in the opinion polls.

McDonnell said if Labour win power they will bring in a 20:1 pay ratio between lowest and highest-paid employees in companies bidding for public sector contracts, as well as those that are publicly owned.

He also said Labour would change regulations so directors have a duty to promote the long-term interests of employees and customers and they would delist firms from the stock exchange who fail to take adequate steps to deal with climate change.

McDonnell outlined a series of perceived faults with the current model of capitalism, including short-termism and the lack of bargaining power for workers.

But he ruled out imposing a windfall tax on oil and gas companies – a policy it had been speculated Labour will put in its party manifesto to be announced on Thursday.

Labour’s economic policies, which would represent one of the most radical assaults on capitalism seen in a major western economy, include nationalising the rail, utility and water companies, confiscating 10% of big companies’ shares, a move to a four-day week and higher taxes on the wealthy.

McDonnell said a Labour government would establish a series of new commissions to oversee corporate behaviour. This would include an overarching business commission containing three separate watchdogs – a companies commission, a finance commission, and an enforcement commission.

McDonnell was speaking as he launched a report, which he said shows the super rich bankroll Prime Minister Boris Johnson in return for tax breaks.

Labour said almost a third of Britain’s 151 billionaires have donated more than 50 million pounds to the Conservatives since 2005 in return for tax breaks for the wealthy and corporations worth 100 billion pounds.

The details of the Conservatives’ wealthy backers are released in a report “In the Pockets of the Few”.

They include former Conservative party treasurer Michael Spencer, businessman Michael Hintze, who has given more than 4 million pounds and theatre producer John Gore, who was the party’s biggest donor last year.

The British public largely support Labour’s criticism of the super rich. More than half of voters say that nobody should be a billionaire and three quarters believe the richest should pay more tax, according to a YouGov poll.

McDonnell also said Labour will separate the Big Four’s audit businesses from other non-audit services such as consulting. He said a new statutory body would conduct audits of all financial services companies.


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