Labour prepares for run on pound if it wins power

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Labour prepares for run on pound if it wins power
« on: September 26, 2017, 07:59:28 PM »
Labour prepares for run on pound if it wins power
Sam Coates, Deputy Political Editor
September 26 2017, 5:00pm, 
The Times

John McDonnell said that Labour had to be ready for an “assault” by opponents
John McDonnell has admitted that Labour is conducting “war games” to prepare for a run on the pound if it gains power.
The shadow chancellor told a meeting at Labour’s annual conference that he did not expect such a scenario to unfold but that the party had to be ready for an “assault” by opponents in the City, media and parliament.
The prospect of a flight of capital from a Labour-run Britain raised eyebrows, but Jeremy Corbyn, the party leader, said the shadow chancellor’s comments demonstrated that they were running a serious opposition that was responsible about preparing for the possible challenges of government.
Giving details of the extensive work being carried out to prepare for Mr Corbyn entering No 10, Mr McDonnell said that Labour had to “scenario plan” with experts to discuss “what happens if there is a run on the pound”.
He warned that the party must be ready for what happens “if they come for us”.

“I don’t think there will (be), but you never know, so we’ve got to scenario plan for that. People want to know we are ready and they want to know we have got a response to everything that could happen. Because if we can demonstrate that, that will calm things down.”
Adam Marshall, director-general of the British Chambers of Commerce, said that a government which triggered a run on the pound would be breaking its first duty to the country. “The duty of any party seeking to form a government has to be to win the confidence of business and the markets as well as the confidence of the voting public,” he said.
“A party that ignores either the wealth creators or market sentiment risks serious economic consequences for the business base and population alike. We have seen already that currency fluctuations have had a negative impact on many businesses and consumers, most notably in the wake of the EU referendum. Businesses want to see stability in the currency, not any suggestion that significant fluctuations lie ahead.”
According to Buzzfeed, the media website, Mr McDonnell also said that his first budget would have included raising corporation tax and new taxes on financial transactions and the purchase of properties by overseas companies, which Labour projected would raise £48 billion in revenues. “To get it through was the most important thing for us,” Mr McDonnell said, “because if we could get the revenue flowing from that, we could then start immediately implementing the policies that we wanted to introduce.”
Responding to the shadow chancellor’s comments in Brighton, Mr Corbyn told Sky News: “What he is doing is saying we look at all scenarios that may affect a Labour government. It is worth seeing these things through. Surely that’s what an opposition serious about getting into government wants to do?”
He told the BBC: “Now, today, in the Treasury, there is a whole team of brilliant people looking at speculation against the pound and runs on the pound that might affect our economy. John is making the point that we have got to look at all these things and all these scenarios.”
Asked whether the scenario of a run on the pound was realistic, Mr Corbyn said: “There’s been a run on the pound for the past two years.”
He said that business should not fear a Labour victory and the wave of nationalisations and tax increases for the rich that the party was promising.
“It’s not going to scare people away, because what we are going to have is an investment-led and productive economy,” he said. “We will invest in skill levels and education in our country. People in poverty and people who are ill are not able to produce as much as those who are not.”
Asked who Mr McDonnell had in mind when he suggested that “they” might come for a Labour government, Mr Corbyn said: “People who John probably doesn’t like. I’m not quite sure who he is referring to there.
“I think he is referring to past Labour governments. Both the [Harold] Wilson governments had problems with that.”
SOURCE==The Times

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