John McDonnell, Labour’s shadow chancellor, made an appeal to banking fat cats this week.
“What you’ll get from us is certainty,” he told business bosses in the heart of London’s City financial district. “There’s nothing up my sleeve.”
He met with a motley crew in the offices of media group Bloomberg. Representatives from Virgin Media, the Crown Estate and Pfizer were invited.
McDonnell boasted that a Labour government would cooperate with business—and said bosses would have a seat at the table.
“If you don’t like the policies we’re using to achieve our objectives, if there’s another way of achieving those objectives, let me know and we’ll discuss them.
“If there’s another way that’s more pragmatic we’ll do it.”
He promised bosses that they would get “a good return on your investments”.
His meeting with the mega-rich wasn’t the only sign this week that McDonnell is thinking seriously about how a future Labour government would run.
He also backed a Tory package of tax cuts for higher earners – leaving the Lib Dems to spearhead parliamentary resistance to them.
The changes will raise the higher income tax rate threshold to £50,000 and the personal allowance for income tax to £12,500 from April.
That means people earning less than £12,500 won’t pay any income tax, compared to the current figure of £11,850. But the real winners are the rich.
The higher tax threshold currently applies to anyone earning over £46,350. Putting it up to £50,000 lets richer people keep more of their money.
The Resolution Foundation said that almost half the benefits of the tax changes would go to the top 10 percent of households.
Despite it being a tax cut predominately for higher-earners, McDonnell said Labour wouldn’t reverse the cut. He said the policy would stand because he didn’t want to “take money out of people’s pockets”.
In the House of Commons Labour told its MPs to abstain on the Lib Dem motion opposing the changes. Opportunistically, a group of Labour right wingers backed the Lib Dems and voted against the tax cut, hoping to undermine Jeremy Corbyn. They voted the right way for tactical reasons, not principled ones.
McDonnell’s position is a far cry from the anti-establishment wave that Corbyn rode during his leadership contests and general election campaign.
Labour’s election manifesto in 2017 pledged to make the financial sector pay more tax and promised to “transform how our financial system operates”.
And Corbyn promised, “We’re a threat to a damaging and failing system that’s rigged for the few.”
Now McDonnell is making increasing appeals to business fat cats to “cooperate” with a Labour government. But Labour leaders can’t simultaneously protect the interests of ordinary people and those of bankers.
Labour’s leaders sense a general election, know the powerful will oppose fundamental change and want to appease the rich who seek to derail a Corbyn victory.
Bosses will likely be happy to use their investments as a method of political influence. They could trigger a run on the pound by pulling investments in sterling – causing its value to sink and creating a crisis for the government.
When McDonnell says bankers have “pragmatic” solutions, he implies Labour will clear the path for them to continue to make profits.
An organised working class will be needed to push back the bankers, and hold Corbyn and McDonnell to account.
The trajectory of McDonnell reflects the limitations of Labour’s politics.
But it is possible to build a society where bankers and bosses are not in charge. Socialism would mean building a society based on meeting human need, not on the agenda of the bosses.
We need to challenge the City fat cats now, and fight for something better in the future.