ANALYSIS

‘Change is coming’ are the chilling words chosen by John McDonnell to describe his collection of Marxist economic proposals. But how would they affect you? ROSS CLARK analyses the party’s ultra-Left agenda...

SHARES FOR WORKERS LABOUR POLICY:

IT wants to force the 7,000 UK companies with more than 250 employees to give 10 per cent of their shares to the company’s workers.

This new ‘ Inclusive Ownership Fund’ would allow workers to benefit from the income generated by those shares. Each employee would be limited to a maximum of £500 profit per year, with any further dividends used to fund public services.

According to Mr McDonnell, employees would collectively gain £4billion a year, with £2billion going to public services.

WHAT WOULD IT COST?

Since private companies are targeted, there would be no direct cost to the public purse. But there would be a huge indirect cost: By handing out shares, companies would confiscate wealth from existing shareholders, many of whom are pensioners.

Law firm Clifford Chance predicts investors would miss out on a gargantuan £300billion.

WHAT WOULD THE REALITY BE?

While Labour hopes this would raise £4billion a year for workers, Clifford Chance estimates the true figure would be a quarter of that.

Meanwhile, workers who gained £ 500 a year could still lose out if their pensions – many of which are invested in these firms – were reduced in value.

Smaller companies would also be starved of investment as investors would be wary of any further share raids, while foreign firms would take their business elsewhere.

FORCE LANDLORDS TO SELL LABOUR POLICY:

ECHOING Margaret Thatcher’s revolutionary policy of allowing council tenants to buy their homes in the 1980s, Labour wants private sector tenants living in properties owned as ‘buy-to-let’ investments to have the right to buy them at a discounted rate – with prices fixed by a government agency.

WHAT WOULD IT COST?

There will be no direct cost to taxpayers but buy-to-let owners might be forced to sell against their wishes – and lose hundreds of thousands of pounds on what they see as the true value due to deflated prices.

WHAT WOULD THE REALITY BE?

If the discounts are substantial, such a policy could destroy the buy-to-let market which has boomed over recent years – with people seeing them as a safe investment compared with unreliable pensions and very poor returns from shares and savings accounts.

While frustrated buyers priced out of the housing market might cheer at the chance of a new ‘right to buy’ revolution, the property owners – fearful of being forced to sell – might well, sensibly, withdraw their houses from the rental market. This, of course, would defeat Labour’s policy and lead to a fresh housing crisis.

UNIVERSAL BASIC INCOME LABOUR POLICY:

WORKERS would all receive a basic income, regardless of any other wealth or income.

Labour is not yet committed to such a policy nationally, but Mr McDonnell announced in May that, as Chancellor, he would set up pilot schemes in Liverpool, Sheffield and the Midlands.

WHAT WOULD IT COST?

According to the Institute for Policy Research at Bath University, a nationwide universal basic income set at the level of current benefits would cost £288billion a year, increasing public spending by over a third. This would inevitably lead to