McDonnell Offers `New Start' for U.K. Banks If Labour Wins Power

(Bloomberg) -- John McDonnell, the lifelong anti-capitalist who is now Treasury spokesman for the opposition Labour Party, set out to woo Britain’s banks with the offer of a “new start” in their relationship.

Joking that finance executives might expect to meet “a raving extremist who is about to nationalize their company and send them on a re-education course,” McDonnell said that instead he wanted them to “come with us” into government, alongside trades unions and manufacturers.

“What we are offering is a new start in the relationship between Labour and the finance sector,” McDonnell said in a speech at Bloomberg’s London headquarters on Thursday. “A relationship in which we recognize the potential of a transformed British financial system, at the leading edge of technology, fulfilling a clear, socially necessary role.”

He acknowledged that not all his policies, which include higher income and business taxes and a financial transaction tax, would be popular with his audience, but said public services needed to be financed. In an interview later on Bloomberg Television, McDonnell reiterated his party’s plans to nationalize the country’s railways and water industry.

“We’ve narrowly defined what we’re going to do with public ownership,” McDonnell said, adding that the party won’t be going beyond what it laid out in its manifesto.

He also struck a conciliatory tone toward the Bank of England and Governor Mark Carney, while acknowledging that Labour wants a debate on the regulator’s mandate.

“We want to maintain the independence of the Bank of England,” he said.

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net, Robert Hutton in London at rhutton1@bloomberg.net.

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Stuart Biggs

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