The UK shadow chancellor, John McDonnell, has used his debut appearance at the World Economic Forum to warn leaders of global businesses that they are held in contempt by ordinary voters who have struggled through a decade of austerity.
Interviewed by the Guardian in Davos, McDonnell said he found the euphoria in Davos about the modest pick-up in world growth shocking, adding that those running big corporations were guilty of complacency.
“You get the feeling that they are cut off in their compound from what people on the outside are feeling,” he said. “There is an ecstatic reaction to a turn in the economic cycle that was inevitable. They don’t understand the deep alienation.”
McDonnell’s criticisms of business, and his policies such as higher corporate taxes and renationalisation, mean that, as with Donald Trump, his decision to attend raised a few eyebrows.
The shadow chancellor said he came in order to tell a few home truths on the “avalanche of discontent and resentment out there”.
“Why did I come? Firstly, I got an invitation and I thought this was the time to check just what the discussions were, what the assessments being made by individuals were and what the feelings were about the future. Secondly, to deliver a message that people need to look at things like the result of Brexit and address the issues that caused it,” he said.
“Davos is what I expected. It embodies the criticisms I have made of it in the past. I don’t think the people here have any comprehension of the contempt in which they are held.”
McDonnell said the corporations represented at Davos had been getting away with “industrial-scale tax avoidance” while ordinary people struggled. “They just don’t get it. It’s the system and it needs to be changed,” he said. He said the big auditing companies should have the equivalent of a doctor’s Hippocratic oath so that they did not encourage firms to avoid tax.
“Ten years after the crash, after 10 years of austerity and 10 years of paying their taxes and seeing public services cut, people have had enough.”
The shadow chancellor believes the pick-up in economic growth has allowed discontent to surface. “In the depths of the recession people concentrated on survival,” he said. “When the cycle turns and people are told the sunny uplands are before them, that’s when people get alienated, angry.”
McDonnell called for an international pledge among progressive governments to introduce a financial transaction tax (FTT) to begin to address the inequalities of the global system and restructure the global economy.
Labour put an FTT in its 2017 manifesto and has committed to spend 50% of the proceeds on aid. “Other countries should follow our lead,” McDonnell said. “We don’t have to wait for a global agreement. We don’t have to wait for a complicated structure. We can protect public services and provide money for development.”
Asked what his message was to Davos, McDonnell said: “Pay your workers a living wage. Make sure workers are properly represented and have a say, a share in the profits and a share in the ownership. Individual company directors here in Davos have the chance to take a lead.”
McDonnell expressed enthusiasm for a basic income, an idea much debated in Davos in the light of the disruption to labour markets expected from the growth of artificial intelligence.
The shadow chancellor said: “There are technological developments that will change the nature of work. The question is whether the developments are used for the intensification of exploitation or whether the benefits are shared with workers.”
UK business leaders in Davos have privately been expressing concern about Labour’s plans to renationalise the railways, the Royal Mail and the utility companies. McDonnell says he is not surprised that there is opposition, and dismissed a report from a rightwing thinktank that the plan would cost £176bn.
“Of course they are having a go, because we are serious about it and it has popular support,” he said. “Detailed work is going on apace.”