The new leader of Britain’s opposition Labour Party has named a hard-left former trade union official, who has backed re-nationalising the country’s banks and higher taxes on the wealthy, to run his economic policy.
Shortly after winning Labour's leadership election on Saturday, Jeremy Corbyn named top members of his shadow cabinet, including John McDonnell as his would-be finance minister.
Mr McDonnell, who lists “generally fomenting the overthrow of capitalism” among his interests in Who’s Who, a directory of influential people, is likely to add to concerns among some Labour members that the party may be unelectable at a 2020 vote.
In 2003, Mr McDonnell was in the headlines over comments he made at a memorial for a dead member of the IRA, when he argued that there wouldn’t have been a successful peace process had it not been for the IRA’s “bravery” and “bombs and bullets and sacrifice”.
Mr McDonnell (64) managed Mr Corbyn's leadership campaign and was rewarded by being given the job of leading Labour's assault on Conservative finance minister George Osborne.
“We will seek to do everything we can, not just to prevent Tory (Conservative) legislation, not just to prevent attacks on our community - we want to bring this government down,” Mr McDonnell told supporters on Saturday.
Mr Corbyn’s sweeping victory has signalled a dramatic shift to the left for Britain’s second-biggest political party.
It split allegiances among Labour politicians but Mr Corbyn won the overwhelming support of party activists by repudiating the Conservative government's austerity policies and the pro-business consensus of former Labour prime minister Tony Blair.
In its place he has offered wealth taxes, money-printing, nuclear disarmament, a British exit from the NATO military alliance and ambiguity about EU membership.
‘Casino economy’
Mr McDonnell, who has twice unsuccessfully run for the Labour Party leadership himself, wants public ownership of the banking system in order to take control of what he calls Britain’s “casino economy,” according to his website.
The British state holds a majority stake in RBS and a minority stake in Lloyds after their bailouts during the financial crisis, but the government is gradually selling both banks back to the private sector.
A financial transaction tax would halt “the frenetic, madcap speculation in the City” and raise money for infrastructure investment, Mr McDonnell wrote in 2012 in a piece for Labour Briefing, a left-wing website.
“If the City resists then let’s make it clear that capital controls would follow,” he said.
He has also said he wants to take the power to set interest rates away from the Bank of England and to give it back to government. This would reverse a decision by a previous Labour government to let the central bank decide monetary policy.
The Conservative Party, which won a May election on a pledge to cut public spending and deliver economic stability, has warned that Mr Corbyn’s policies are a threat to the country’s economic security.
However, another of Corbyn's appointments, foreign affairs spokesman Hilary Benn, tried to ease fears over the party's stance on an upcoming European Union referendum, promising Labour would campaign for Britain to stay in the bloc "under all circumstances".
Mr McDonnell has also said Britain’s rail system should be re-nationalised and that the power of the country’s six big energy suppliers should be reduced by expanding renewable energy production in local communities.
In 2010 he stirred controversy by quipping that if he could return to the 1980s he would assassinate Margaret Thatcher. He later apologised for the comment which he said was a joke.
Reuters/Bloomberg