Angela Eagle dismisses Jeremy Corbyn 'fairness' policy as 'not a runner'

Labour leader Jeremy Corbyn's proposal to ban companies from paying shareholder dividends unless they pay all their workers the living wage has been dismissed as unworkable by his own shadow business secretary.

Angela Eagle told The Sunday Times that the plan was "not a runner" and said the Opposition had to make sure it was "realistic" in the policies it put forward to press firms for action over issues such as pay inequality.

The snub came as Ms Eagle - who as shadow first secretary of state is the leader's de facto deputy - again declined to rule out Mr Corbyn being ousted before the 2020 general election.

And she poured cold water on his push for negotiations with Argentina over the sovereignty of the Falkland Islands and questioned the approach to the divisive issue of Trident renewal.

Mr Corbyn put forward the dividend ban as one way to "institutionalise fairness" in a recent keynote address to the Fabian Society alongside the imposition of "pay ratios" between those at the top and those at the bottom of a company's pay scale.

"Only profitable employers will be paying dividends. If they depend on cheap labour for those profits then I think there is a question over whether that is a business model to which we should be turning a blind eye," he said.

It drew criticism from bosses and Liberal Democrat leader Tim Farron called it "anti-business".

Ms Eagle, who heads the party's manifesto-setting National Policy Forum and has been tipped as a possible successor should Mr Corbyn be removed, told the newspaper: "A ban on dividends is not the way to do it.

"It is an interesting idea, but it does not actually work."

She said: "It was an idea. It has since been reported as a policy but it is not a policy.

"The idea that you could ban people from paying dividends unless they pay the living wage is not a runner."

Stressing the need for a "credible economic and business offer", she went on: "We need to be realistic about how we make steps towards fairness."

She laughed off questions about Mr Corbyn's controversial call for some kind of accommodation with Argentina over the Falklands.

"The Falklands issue was settled when I was at university," she said.

Speculation over a challenge to Mr Corbyn has rumbled ever since his shock victory in the contest to succeed Ed Milband, fuelled by a series of stark disagreements with MPs over issues such as Syria air strikes and the UK's nuclear deterrent.

Asked if she believed Mr Corbyn would take Labour into the next general election, Ms Eagle said only: "I'm not going to speculate about who is going to be anywhere."