JEREMY Corbyn’s plan to empower councils to help British firms secure public sector contracts has been branded a “cynical attempt” by the Conservatives to hand more clout to trade unions, which would raise procurement costs and push up council tax.
The Labour leader, on the campaign trail in Yorkshire, accepted Brexit presented many challenges but argued that it could also allow changes to procurement rules to favour local suppliers and jobs.
Mr Corbyn demanded sweeping changes to the way almost £200 billion was spent in the private sector with requirements for firms bidding for contracts to recognise trade unions and curb boardroom excess by moving towards a 20-1 pay ratio between high and low earners.
In a speech at Wabtec Rail in Doncaster, the Labour leader said: "While Brexit presents many challenges to Britain, it can give us more powers to encourage best practices and support new and existing businesses and industries in Britain.
"While the Conservatives seem intent on using Brexit to turn us into a low-wage tax haven, Labour will use every power possible to upgrade our economy so we can all lead richer lives."
He insisted a Labour government would not use taxpayers' money to "subsidise bad corporate behaviour".
Mr Corbyn said: "For years we've been told that there's nothing that can stop the race to the bottom in the jobs market that is making people's lives harder and holding back our economy.
"Well, today I say, Britain doesn't have to be so meek, and settle for things getting worse and more insecure for so many. We can make the change we need if we understand the power we already have - and how we can better use it.
"National and local government spends £200 billion per year in the private sector. That's an incredible purchasing power, which we can use to support the good companies and improve the behaviour of the bad ones that undercut with unfair practices.
"Under the next Labour Government, Britain will subsidise bad corporate behaviour no longer. Our business partners should have the same values we as a country hold: enterprise, fairness, high-quality service and doing right by everyone," he explained.
Firms bidding for contracts would need to comply with collective bargaining agreements, pay suppliers within 30 days, maintain high environmental standards, provide training and apprenticeship opportunities, comply fully with tax requirements and adopt "best practices" in equal opportunities.
Labour stressed that all of those measures would be possible within existing EU rules.
After Brexit, central and local government will be outside the EU's strict procurement rules and Labour would introduce "local jobs and content requirements" for contracts that fall below World Trade Organisation[WTO] thresholds.
The party also called on the UK Government to conduct an impact assessment of the WTO general procurement agreement[GPA] coverage on local authorities in the UK.
Currently, the GPA thresholds are set at almost £5.5 million for construction contracts, £141,621 for central government goods and services and £217,878 for sub-central government contracts.
But Sir Patrick McLoughlin, the Conservative Party Chairman, said of Mr Corbyn’s speech: “This cynical attempt by the Labour Party to give more power to their union paymasters would force up council procurement costs, causing council tax to soar.
“And that’s on top of promising £500 billion worth of spending with money we simply don’t have; that would risk jobs and living standards and mean higher taxes on ordinary working families.
“Across councils and in government it is the Conservative Party with a Plan for Britain, that is building a stronger, fairer country that our children and grandchildren are proud to call home,” he added.
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