Coronavirus: Rebecca Long-Bailey calls for government to keep stake in firms it bails out during crisis

Lizzy Buchan
The Independent
Getty
Getty

The government should take a stake in private firms that accept a state bailout during the coronavirus crisis, Rebecca Long-Bailey has said.

The Labour leadership hopeful called for partial nationalisation of firms rescued by the government during the outbreak, as she said ministers must learn the lessons of the 2008 financial crisis.

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Writing exclusively for The Independent, Ms Long-Bailey said shares could go into a "social wealth fund" which would invest on behalf of the public and pay out a universal dividend to all citizens.

Her comments came after the chancellor announced a financial aid package for the self-employed, on top of 80 per cent wage subsidies for workers and a scheme of government-backed loans for businesses.

Ms Long-Bailey said the coronavirus crisis shone a light on how "too many people are one paycheck away from hardship" and called on the government to "reprogramme the economy" when the outbreak is over.

The shadow business secretary said: "Companies, banks and other institutions that have received public support should have to operate differently afterwards.

"We can’t allow businesses like Easy Jet to take government money, and then spend it on a massive payout to shareholders.

"This can’t be a one size fits all approach - clearly a small chain of pubs is different from the steel industry - but in every case we should see greater public benefit and social responsibility throughout the economy."

Ms Long-Bailey called for a "basic post-crisis quid pro quo" where firms agree to sign up to standards such as trade union recognition, pay ratios and environmental protection.

Ministers should take "equity stakes in some companies and institutions that receive out support", she said, particularly large and strategically important companies and industries

These shares could be added into a "social wealth fund that would continue to invest on behalf of all of us, be publicly and democratically accountable, and pay out a universal dividend to all citizens", the Labour frontbencher added.

Ms Long-Bailey said: "If we build on the best of the values the people of this country have displayed in response to the coronavirus, we can reprogramme our economy after the crisis so it works better for everyone and makes us more resilient to future shocks.

"Yes, that means that those at the very top will have less, so that everyone can have more freedom and security."

Ms Long-Bailey is up against her shadow cabinet colleague Sir Keir Starmer and Wigan MP Lisa Nandy in the race to succeed Jeremy Corbyn as the party's next leader.

The result of the Labour leadership contest will be announced on 4 April.

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