John McDonnell unveils plans to borrow £100bn to protect British industry post-Brexit
'We will not stand by like this one has and see our key industries flounder and our future prosperity put at risk'
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Your support makes all the difference.John McDonnell has said Labour would borrow £100bn to support key British businesses in an attempt create a post-Brexit "manufacturing renaissance".
Mr McDonnell will use his keynote speech to Labour's annual conference in Liverpool to present the party as a future "interventionist government".
And he will accuse the Conservative Government of undermining UK industry's potential by cutting scientific research spending and subsidies to renewable energy as well as planning to reduce investment in infrastructure like housing and transport.
"We are setting up a national investment bank. We are putting into that bank £100 billion. Yes, that will be borrowed, but it will be borrowed at the cheapest rates in our history," he told Sky.
"That will lever in, at the average leverage rate, another £150 billion. And we will use that to invest in our infrastructure, in our skills and we will be working with entrepreneurs.
"We want to be what is described in modern terminology as an entrepreneurial state, where the state will work with the private sector, the wealth creators, to develop the products and the markets, and we will invest in the long term.
Mr McDonnell denied that borrowing on such a large scale would mean higher taxes: "Short term interventions like that do pay dividends pretty quickly," he said. "We think we can get growth growing very quickly in this economy and it will then pay for itself.
"So in the short term, yes there will be some increased costs, but borrowing at the moment is extremely low-cost."
Mr McDonnell will tell the conference that the rules of globalisation "are being rewritten for us", with governments around the world moving away from reliance on free markets in favour of intervention.
He will cite the crisis caused by China flooding world markets with cheap steel, when the UK was slow to follow other major governments in taking action to protect its home-grown steel sector.
Mr McDonnell will say: "We need a new deal across our whole economy. Because whatever we do in Britain, the old rules of the global economy are being rewritten for us.
"The winds of globalisation are blowing in a different direction. They are blowing against the belief in the free market, and in favour of intervention."
Conservatives were "too blinkered by their ideology" to recognise the international shift away from free market policies, he will claim.
And he will promise: "Be certain the next Labour government will be an interventionist government.
"We will not stand by like this one has and see our key industries flounder and our future prosperity put at risk ... When we return to government we will implement a comprehensive industrial strategy."
Mr McDonnell will add: "After Brexit, we want to see a renaissance in British manufacturing.
"And as we've committed ourselves, our government will create an entreprenurial state that works with the wealth creators, the workers and the entrepreneurs to create the products and the markets that will secure our long-term prosperity."
Britain is well placed to take advantage of developments in digital technology which allow companies to site manufacturing facilities close to skilled workforces and potential markets, rather than in the part of the world able to offer the cheapest labour, the shadow chancellor will argue.
This meant that the tide of factory closures as firms shifted work overseas is now turning, with one in six manufacturers in Britain now bringing jobs back to Britain.
"Digital technology means production can be smaller-scale, in smaller, faster firms dependent on co-operation and collaboration, not dog-eat-dog competition," MrMcDonnell will say.
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