Corbyn defends preparation for possible run on pound after Labour takes office

Updated: 

Jeremy Corbyn has defended shadow chancellor John McDonnell's decision to prepare for the possibility of a run on the pound after Labour takes power.

The shadow chancellor told a meeting at Labour's annual conference in Brighton that he did not expect such a scenario to unfold but the party had to be ready for an "assault" by opponents in the City, media and parliament.

The prospect of the flight of capital from a Labour-run UK raised eyebrows, but Mr Corbyn insisted that the shadow chancellor's comments showed that Labour was a serious opposition responsible about preparing for the possible challenges of government.

Giving details of the extensive work being done to prepare for Mr Corbyn entering Number 10, Mr McDonnell said Labour had to "scenario plan" with experts to talk through "what happens if there is a run on the pound?"

And he warned that the party must be ready for what happens "if they come for us".

He continued: "I don't think there will (be), but you never know, so we've got to scenario plan for that .... People want to know we are ready and they want to know we have got a response to everything that could happen. Because if we can demonstrate that, that will calm things down."

Responding to the shadow chancellor's comments during a round of TV interviews in Brighton, Mr Corbyn told Sky News: "What he is doing is saying we look at all scenarios that may affect a Labour government.

"It is worth seeing these things through. Surely that's what an opposition serious about getting into government wants to do?"

And he told the BBC: "Now, today, in the Treasury, there is a whole team of brilliant people looking at speculation against the pound and runs on the pound that might affect our economy.

"John is making the point that we have got to look at all these things and all these scenarios."

Asked whether the scenario of a run on the pound was a realistic one, Mr Corbyn said: "There's been a run on the pound for the past two years."

He insisted business should not fear Labour victory and the wave of nationalisations and tax hikes for the rich the party is promising: "It's not going to scare people away, because what we are going to have is an investment-led and productive economy.

"We will invest in skill levels and education in our country. People in poverty and people who are ill are not able to produce as much as those who are not."

Asked who Mr McDonnell had in mind when he suggested that "they" might come for a Labour government, Mr Corbyn said: "People who John probably doesn't like. I'm not quite sure who he is referring to there.

"I think he is referring to past Labour governments. Both the (Harold) Wilson governments had problems with that."