JOHN McDonnell will praise the Co-operative Party for sticking with Labour through "thick and thin" just weeks after rumours circulated that it could be used as a method for opposing Jeremy Corbyn.
The shadow chancellor, the Labour leader’s most senior ally, will say "our unity as a movement" has been a source of strength in a speech to the Co-operative Party's conference in Cardiff on Saturday.
Over the summer reports suggested that critics of the leader had considered using membership of the Co-operative, Labour's sister party, to present themselves as an alternative to the Corbyn-led Opposition in the Commons.
The Co-op party was forced to issue a statement in August saying it was "not a vehicle to be used by one political faction or another to advance their own agenda" and remained neutral in the leadership contest between Mr Corbyn and Owen Smith.
Mr McDonnell will tell the Co-op party conference in Cardiff: "It is refreshing to be addressing the Co-operative Party who have partnered with the Labour Party through thick and thin since our electoral pact in 1927. It's our unity as a movement that has always been our strength.
"But let's be clear: the whole labour movement is at a turning point."
One indication for that was the Leave vote in the European Union referendum, which indicated the "despair" people felt at the political and economy system.
The shadow chancellor will promise fresh plans later this year aimed at increasing the amount of worker-owned co-operative firms, arguing that they offer a "clear productivity advantage".
"I want to see the next Labour government put in place measures that will at least double the size of our co-operative sector, giving a nearly £40 billion boost to the whole economy," he will say.
Setting out his views on worker-owned enterprises, Mr McDonnell will highlight his proposals for a "right to own" for employees if their company is up for sale.
He will say: "The evidence that co-operative enterprises and worker-owned companies can produce far better results is compelling.
"Twice as many co-operatives survive the crucial first five years as other businesses. And worker-owned enterprises offer a clear productivity advantage.
"So that is why after this conference season is over, we will begin a major piece of work on developing the co-operative economy."
He will add: "It's a disgrace that zero-hour contracts have risen by 20 per cent in the last year alone.
"But by giving people a stake in the companies they work for and spreading the ownership of those companies, we can start to transform corporate Britain.
"That's why I've argued for a right-to-own for employees. If a company is facing a change of ownership or closure, they should have first refusal on forming an alternative employee-owned business plan."
Mr McDonnell will also repeat Mr Corbyn's promise of a £500 billion investment programme and hit out at the Chancellor, saying it "beggars belief that Philip Hammond has not already turned his back on former chancellor George Osborne's failed austerity strategy".
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