A LABOUR government would balance the UK's books "fairly", avoiding the cuts to benefits and services resulting from Conservative austerity, shadow chancellor John McDonnell has said.
In his first major speech in the post, Mr McDonnell set the scene for tax hikes on the rich, saying that when a Labour government needs to raise money it will do so by "fairer, more progressive taxation" which does not impose a burden on middle and low-earners.
He promised an "aggressive" drive to force multinational corporations like Starbucks, Vodafone, Amazon and Google to pay "their fair share of taxes" and to cut "subsidies" enjoyed by business. And he said Labour would boost growth through an "active monetary policy" - effectively printing money to stimulate the economy.
Mr McDonnell's blueprint won a wary reaction from business, with the CBI warning that an active monetary policy could fuel inflation and drive up interest rates, while the British Chambers of Commerce said Labour "must not confuse supporting growth with state control over the economy".
And Vodafone said there was "no truth" in the shadow chancellor's claim it was dodging tax, insisting it has "always paid its taxes" and pointing to a £360 million bill in direct UK taxes for 2014/15, when its profits in the country amounted to just £41 million.
In his keynote address to the Labour annual conference in Brighton, the veteran left-winger accused Conservatives of making middle-earners and the poor bear the burden of eliminating Britain's deficit, while protecting the richest from the consequences of the economic crisis.
He said Labour would "halt Conservative tax cuts to the wealthy paid for by cuts to families' income", end the "brutal" treatment of disabled people subjected to fitness-to-work assessments and deliver a "real living wage", higher than the £7.20 "national living wage" offered by George Osborne.
"Austerity is not an economic necessity, it's a political choice," said Mr McDonnell.
"The leadership of the Conservative Party made a conscious decision six years ago that the very richest would be protected and it wouldn't be those who caused the economic crisis who would pay for it. Although they said they were One Nation Tories, they've demonstrated time and time again, they don't represent one nation, they represent the 1 per cent."
Insisting that Labour would not be "deficit deniers" Mr McDonnell said: "I tell you straight from here on in Labour will always ensure that this country lives within its means. We will tackle the deficit."
But he added: "This is the dividing line between Labour and Conservative. Unlike them, we will not tackle the deficit on the backs of middle and low-earners and especially by attacking the poorest in our society.
"We will tackle the deficit fairly and we can do it."
