Five things we learnt from shadow chancellor John McDonnell's speech to the Labour Party conference

Labour has launched radical proposals to require private companies to hand over an up to a 10% share of their equity to workers, with any surpluses funding public services and welfare.

As well as unveiling plans for worker dividends in his speech to the Labour Party conference in Liverpool, John McDonnell also announced sweeping plans to bring water, power, Royal Mail and the UK's railways back under public ownership, said that Labour would crackdown on tax avoidance, "end Treasury bias against regions", and called for a General Election over the Government's "failures" over Brexit.

  • Inclusive ownership funds

Announcing his plans for worker dividends as part of Labour's next manifesto, the shadow chancellor told the conference that "power comes from ownership", adding: "It's time to shift the balance of power in our country, it's time to give people back control over their lives."

The Hayes and Harlington MP said that by making companies with more than 250 employees pay up to 10% of their shares each year into an inclusive ownership fund, almost 11 million workers could gain up to £500 a year each.

If employees stood to gain more than £500 per year, this additional income would be capped at that level, with any further dividends going to a national fund to pay for public services and welfare.

If it came into force, it is expected that the levy on private business would be worth an estimated £2.1 billion a year.

Workers’ fund representatives would have voting rights in companies’ decision-making processes in the same way as other shareholders, Mr McDonnell announced, adding this would make employees more invested in "productivity and long-term decision making".

"If employees have a greater say and stake in the rewards of their labour, true industrial democracy will come to this country," Mr McDonnell said.

Conservatives branded the proposal “yet another tax rise” which could deter companies from taking on staff, while the CBI warned it would drive down investment.

However, in an interview with ITV News ahead of his address, the shadow chancellor insisted the scheme was not a tax but a "social dividend...

"Businesses are profitable because they depend on our schools to educate their workforce," the country's infrastructure, and "even the NHS which treats their workers when they're sick, so if the dividend goes above a certain level [£500 per worker] it would go into a collective pot to go towards the public services that they're [businesses] dependent on."

Mr McDonnell announced plans to renationalise water companies. Credit: PA
  • Renationalisation of water, power, Royal Mail and rail

As well as extending "economic democracy" through inclusive ownership funds, this could be taken further by bringing water, power, Royal Mail and rail back into public ownership, Mr McDonnell told party members.

The 67-year-old said this "nationalisation will not be a return to the past”, pledging openness and transparency, adding that it would "end profiteering", with money reinvested or used to cut bills.

Mr McDonnell used the example of the "scandal of the privatisation of water" to outline his plans, telling the room: "Water bills have risen 40% in real terms since privatisation and £18 billion has been paid out in dividends.

"Water companies receive more in tax credits than they pay in tax.

"Each day enough water to meet the needs of 20 million people is lost due to leakages.

"With figures like that, we can’t afford not to take them back."

Mr McDonnell said he would launch "a large scale consultation on democracy in our public services" on Monday in a bid to kickstart his plans.

Labour’s annual conference is taking place at the Arena and Convention Centre in Liverpool Credit: PA
  • End Treasury bias

A Labour Government would "end Treasury bias against investing in regions and nations outside London", Mr McDonnell said.

"We will reprogram the Treasury, rewriting its rule books on how it makes decisions about what, when, and where to invest...

"We’ll make sure it assesses spending decisions against the need to tackle climate change, protect our environment, drive up productivity and meet the investment challenges of the 4th industrial revolution."

  • 'Tax avoiders, we are coming for you'

The shadow chancellor pledged that a Labour Government would name and shame companies that do not pay what the party sees as the taxes they properly owe: "fair warning to the tax avoiders, we are coming for you," Mr McDonnell said.

However, Mr McDonnell said that Labour did not need to be in power to start targeting companies over tax avoidance, saying he will launch a campaign to encourage big investors to stigmatise companies that pay abnormally low tax, "denying our hospitals, our schools and carers the resources they need".

Again, the Labour veteran hit on the idea of shareholder power, this time to "demand companies uphold basic tax justice standards.

"Numerous institutions from churches to trade unions and pension funds have large scale shareholdings in many of the companies that avoid taxes."

He added that Labour would also "demand companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes".

John McDonnell pledged to crackdown on tax avoidance. Credit: PA
  • General Election: 'Bring it on'

The "failures" of the Conservative Party in Brexit negotiations "are in plain sight", Mr McDonnell told the conference, adding the Government should "get out of the way and let us get on with securing the way forward that will protect our economy, our jobs and our standard of living for our people".

A General Election would allow Labour to set out its plans for Brexit, and then the public would be able to decide on whether they preferred the Tories' plans or Labour's, and then vote accordingly.

Members of the public march in support of the People’s Vote campaign in Liverpool Credit: PA
  • What was not mentioned?

Prior to Mr McDonnell's address, the conference was dominated by talk of a second referendum on Monday.

Earlier on Monday, Mr McDonnell told ITV News that this would be a decision between accepting or rejecting the Government's Brexit deal, but a third option of remaining in the EU would not be one of the questions asked.

However, Labour MP Ben Bradshaw also told ITV News that the shadow chancellor "can't have read the motion properly" and that what Mr McDonnell has said was "a nonsense", since the party decided to keep open the option of remaining in the EU.

While earlier in the day Mr McDonnell told ITV News that a General Election would be Labour's first choice, with a second referendum their plan b, during his speech, the shadow chancellor made little mention of the vote, instead stating that "we are keeping all the options for democratic engagement on the table".

ITV News Political Editor Robert Peston said that this statement meant that Labour would back a second referendum if one was thought to be needed.