Jeremy Corbyn: Labour and business should be natural allies

Jeremy Corbyn has said Labour and business should be "natural allies" but warned firms they would be expected to "put more back into the economy" if he was in power.

The Labour leader said the economy was a "house built on sand" as he set out an agenda of increased government borrowing to fund infrastructure and skills.

He hit out at the privatisation of public assets, telling business leaders the country could not survive by "flogging the furniture to pay the rent".

Mr Corbyn also attacked key elements of New Labour's years in office - the tax credits that provide a "subsidy" for low wages and the private finance initiative (PFI) schemes which had landed the NHS with high debts.

He accused City firms of treating ordinary workers, consumers and small firms like "cash cows", in a speech setting out his vision of a "new economics" at the British Chambers of Commerce conference.

"We want to see a break with the economic orthodoxy that has gripped policymakers for a generation," he said.

"We will borrow to invest over a business cycle. We will put public investment in science, technology and green industries of the future front and centre stage."

Mr Corbyn accepted that business "may not like everything we say" as he said there would be new "rights and responsibilities", but insisted that he and shadow chancellor John McDonnell had an agenda to transform the economy.

He said: "Our failure to invest and our determination to sell off assets has left us with a current account balance that is forecast to be the worst of all the G7 countries this year.

"We should not be selling off our nation's assets to pay our way in the world. You can't survive very long by flogging the furniture to pay the rent.

"Britain needs to be exporting hi-tech, innovative products throughout the world, not standing by and watching our exports stagnate or shrink.

"We cannot be satisfied that our growth is currently driven by low interest rates, record low oil prices, property and debt. These factors cannot be sustained indefinitely.

"All these economic problems are connected: lack of access to finance constrains export growth; a failure to invest in our digital economy stifles productivity growth; a dearth of skills holds back innovation.

"In the 21st century the role of government is to understand these connections and make policy to fit."

Mr Corbyn told the conference in central London: "You may not like everything we say but when it comes to big decisions on the economy, infrastructure, skills and investment we are actually natural allies because Labour is committed to what is needed for business to expand and succeed.

"We expect businesses to put more back into the economy but we will do more to give the economy a stronger future."

He told the business leaders: "Wealth creation is a collective process between workers, public investment and services, and creative individuals and businesses.

"It cannot be based on a race to the bottom in pay and job insecurity, or the subsidy of low wages with in-work benefits. That's why we're in favour of a real living wage and stronger trade unions.

"That will not only benefit employees, but help prevent good employers being undercut. As the evidence shows, collective bargaining boosts productivity as well as protecting workers."

The Labour leader used his speech to restate his party's commitment to EU membership.

He said: "Think about the issues facing the world - climate change, the refugee crisis, raising standards for workers and consumers and dealing with the minority of companies that seek to avoid their taxes.

"These are all issues that can only be resolved by working with our partners in Europe, not by ditching them and walking away."