At Labour annual conference in Liverpool, Shadow Chancellor John McDonnell insisted that Britain needs an interventionist government working with the private sector.
An incoming Labour government would borrow in the short term for long-term investment and the “prosperity of the future”. That would trigger investment from the private sector and, ultimately, higher tax returns.
Digital advances are encouraging firms to return to the UK but the Conservatives are “too blinkered by their ideology” to take advantage.
Labour will not stand by and let industries such as steel go to the wall, but he also promised to “work with” wealth creators and entrepreneurs, committing Labour to supporting major industrial employers and firms in emerging sectors, such as clean energy.
He also claimed that advocates of the free market will be unable to fully exploit the opportunities presented by the UK’s exit from the EU.
“We need a new deal across our whole economy,” he said. “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.”
The future of manufacturing lies in collaboration – underpinned by high-skilled labour and high levels of investment – rather than “dog-eat-dog competition”.
He went on: “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. After Brexit, we want to see a renaissance in British manufacturing.”
Meanwhile, Labour promised to replace any regional funding shortfalls caused by Brexit “into the 2020s and beyond”.
Shadow foreign secretary Emily Thornberry said the multi-billion pound commitment would be a “central plank” of Labour’s next manifesto, adding: “Communities who stand to lose out most from Brexit must be looked after first.”
Ms Thornberry told conference delegates in Liverpool the government’s offer was “hedged in conditions” and claimed it had “said nothing” about after 2020.
“Without long-term certainty over funding, our most deprived regions and communities cannot plan ahead. They cannot attract other investment. They cannot make progress,” she said. “So thanks to John McDonnell, Labour’s shadow chancellor, we can guarantee that a future Labour government will make up any shortfall in structural funding into the 2020s and beyond.”
At a fringe meeting, shadow health secretary Diane Abbott said anti-austerity was once seen as a “left-wing preoccupation” but was now Labour’s official position. Jeremy Corbyn’s re-election was a “turning point” for progressive politics across Europe.
Former leader Ed Miliband said the confusion unleashed by the Brexit vote was an opportunity for Labour but only if it spoke for both those who voted to leave as well as remain.
MPs critical of Corbyn’s leadership said they wanted reassurances that there would be no constituency deselections and at least partial elections to the shadow cabinet. Ben Bradshaw told activists “we all want unity as long as it’s not the unity of the graveyard”.