Labour have prepared for a run on the pound if they are elected, shadow chancellor John McDonnell has admitted.
At a fringe event at the party’s conference in Brighton, Mr McDonnell described the work being done to allow Labour to “hit the deck running” should they win power.
The party are hoping to use their annual gathering to present themselves as a government-in-waiting after the general election in June resulted in a hung parliament.
As part of their “war game-type scenario-planning”, the shadow chancellor revealed Labour had discussed what would happen if there was a slump in sterling in the wake of Jeremy Corbyn being elected Prime Minister.
Mr McDonnell said Labour had to prepare for a “potential assault” by opponents in the City, media and Parliament if Mr Corbyn entered Downing Street, with the party putting together “detailed implementation manuals” and draft laws.
Video: McDonnell: Labour’s ‘war-gaming’ means ‘we’re ready’
Speaking to a gathering of left-wing Momentum activists, he said: “It tries to answer the question about what happens when or if they come for us.
“What if there is a run on the pound? What happens if there is this concept of capital flight?
“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 anything that could happen.
“If we can demonstrate that, that will calm things down.”
If the party had won the election on 8 June, the shadow chancellor said he would have introduced a budget by the end of July to bring in a financial transaction tax and measures to combat tax avoidance.
Mr McDonnell revealed Labour had been working with teams of experts on their scenario planning, with one group being headed by Richard Barbrook, an academic at the University of Westminster who runs an organisation called Class Wargames.
According to its website, the organisation “investigates gaming as a metaphor for social relations under repressive neoliberalism” and “trains the militants of the cybernetic communist revolution to come”.
Chancellor Philip Hammond claimed Mr McDonnell had “privately conceded the disastrous effects that Labour’s plans would have on Britain’s economy”.
Video: Jeremy Corbyn: The full interview
But Mr Corbyn later defended his shadow chancellor’s comments, dismissing suggestions Mr McDonnell had admitted a Labour government would incite a drop in confidence in the UK economy.
The Labour leader told Sky News: “What he’s doing is saying we’d look at all scenarios that may affect a Labour government coming in.
“It’s worth thinking all these things through.
“Surely that’s what an opposition, a serious party wanting to go into government, should do – look at all the possibilities, all the eventualities.
“Is there anything wrong with that?”
Clarifying the shadow chancellor’s remarks, a spokesperson for Mr McDonnell said: “This was an exercise not done by us but by members.
“The scenarios were to deal with numerous events such as national disasters and acts of terror that could occur under any government.”
Source: Sky News