John McDonnell speech: 'The game is over', shadow chancellor warns tax-dodging businesses

Shadow chancellor John McDonnell today declared war on tax-dodging businesses in Britain — warning them: “The game is over.”

He urged churches, trade unions and pension funds with shares in large multinationals accused of fiddling the system to force them to pay their dues. In his keynote speech to Labour’s annual conference, Mr McDonnell claimed some big firms avoid paying taxes on an “industrial scale”.

“They are denying our hospitals, our schools and carers the resources they need,” he said.

“We should act now... one way is to mobilise shareholder power to demand companies uphold basic tax justice standards.” He emphasised that many institutions including churches, trade unions and pension funds have large-scale shareholdings in “many of the companies that avoid taxes”. He added: “So today I’m announcing my intention to bring together these organisations to launch a shareholder campaign.

“We’ll be demanding companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes. So the warning to the tax avoiders is: the game is over.”

Starbucks, Amazon and Google are among multinationals who have been accused of avoiding taxes, though they deny any wrongdoing and there is no evidence that they have broken the law. In his address to the party faithful, Mr McDonnell announced a series of other moves which company bosses warn could hit their businesses including:

Renationalisation of water companies, with customers, workers and town halls taking control of them; questions remain over the cost to the taxpayer of the move.

A pledge to give workers more power with a third of the seats on company boards allocated to them, and wages being determined by sectoral collective bargaining.

Proposals for “inclusive ownership funds” into which large firms would have to put one per cent of their shares every year up to a maximum of 10 per cent. Mr McDonnell said it could net almost 11 million workers up to £500 a year each. But CBI director-general Carolyn Fairbairn warned: “Investment will flee our country and, whatever Labour say about this, the outcome will be one that reduces pay in people’s pockets.”

Signalling a shift in public funding away from London. Mr McDonnell said: “We will end the Treasury bias against investing in the regions and nations.”

He hailed the 100th anniversary of Labour’s old Clause 4 to “secure for the workers, by hand or by brain, the full fruits of their industry” — which was rewritten by Tony Blair in the Nineties. Mr McDonnell added: “It’s time to shift the balance of power in our country … it’s time to give people back control over their lives.”

Meanwhile, Labour MPs warned of a “purge” of centrists today after the party voted through new rules making it easier to sack Members of Parliament deemed to be out of touch. On a card vote of members and union chiefs, the historic change was backed by 65.32 per cent to 34.68 per cent. The new rules stopped well short of calls made by Momentum for automatic mandatory reselection for all MPs. But critics said they could still cause turmoil by putting the power to trigger a reselection battle into the hands of small numbers of people, slashing the threshold to a third of local members and affiliated unions.