John McDonnell signals Labour might be moving towards writing off student debt

But commenting on the debt issue - just two days before his party publishes its election manifesto - the Shadow Chancellor hinted that the Opposition might be willing to go even further.

The signal came as Mr McDonnell, in a campaign speech, set out plans for workers and consumers to "take back control" under a new business model and warned companies that if they failed to tackle climate change, then they could be delisted from the London Stock Exchange.

Earlier, referring to student debt, the Labour frontbencher argued that the system was “designed in such a way that it would not work and it would eventually mean large elements of this would have to be written off. That is what the Government has already had to do”.

Mr McDonnell stressed: “There is an approach that has to be taken that looks at existing debt and we will be looking at some of these issues in the coming weeks.”

Pressed on whether Labour would pledge to cancel student debts, he added: “What I'm saying is, it has to be addressed by some form by whoever is in government, because the system - exactly as we predicted - is not working."

With student fees in England topping £9,000 a year, many students finish their courses heavily in debt. In Scotland, fees for Scottish students and those from the EU are borne by the Scottish Government while students from England, Wales and Northern Ireland pay fees.

Earlier this year, the outstanding student loan book south of the border was put at more than £120 billion and it is estimated that by 2050 it could reach £450bn.

At the weekend, Len McCluskey, the Unite leader and a close ally of Jeremy Corbyn, suggested that Labour’s manifesto would mean student debt would be “lifted off our youth”.

Before the 2017 election Mr Corbyn was widely interpreted as having vowed that an incoming Labour government would write off all student debts, saying: “I don’t see why those that had the historical misfortune to be at university during the £9,000 period should be burdened excessively."

Yet the policy was not included in that year's manifesto.

In his speech to business leaders in Westminster, Mr McDonnell outlined proposals to move away from a shareholder economy towards a stakeholder model as well as reforming corporate governance, accountability and regulation.

Companies already have to meet rules set by the London Stock Exchange and Financial Conduct Authority but Labour is proposing amending the Corporate Governance Code to put in place a minimum standard to listing relating to "evidence of necessary action being taken to tackle climate change".

Delisting occurs when a stock is removed from a stock exchange and is usually prompted by a company failing to meet the requirements of the exchange.

The Shadow Chancellor explained: "It will be for, basically, those companies themselves to bring forward their proposals and plans; exactly what sort of proposals they'll be, how effective they'll be.

"And then during the listing process, they'll be assessed about how successful they are either performing or how successful their plans will be.

"On that basis, just as with the rest of the code that there is, they'll then be assessed and determined if they can be listed."

Mr McDonnell also outlined plans for 10 per cent of company shares to be transferred to workers over a decade at a rate of one per cent a year.

He added: "What we're trying to promote is a stakeholder economy. Again, it is something we have been arguing for for over three decades now.

"So, the idea is, we'll introduce legislation where companies hand over one per cent of their shares for 10 years into an employee-ownership scheme.

"Again, that fund will then retain those shares, have the dividends rewards and put them into that fund and the individual employees will draw upon those dividends, of course, but they'll be collectively owned.

"There'll be a limit of £500 of income that they can have. On average, it looks as though it will be about £180 a year they'll get to. Above the £500, elements of that funding will then go towards, again, another fund that is about tackling climate change and funding green apprenticeships."

During his speech, Mr McDonnell said Democratic presidential contender Bernie Sanders was considering a similar proposal but with 20 per cent of shares.

He explained: "We've arrived at 10 per cent on the basis of consultation that we've had. In America, it's a different debate going on overall. But it's interesting that the idea which started with us is now spreading across the globe.

"And you'll see there will be a demand, by particularly democratic and labour parties, to try and ensure we lay the foundations of a stakeholder economy in that way.”

The Shadow Chancellor predicted that it would be incredibly popular and also effective.

“We know the greater levels of employee-ownership, the greater levels of productivity and longer-term decision-making.

"We've been touring around, we've been looking at the German model, in terms of the national investment bank.

"We've been looking at some of the investments that have taken place in the States with regard to community wealth building for example.

"It's quite eclectic, we've been trying to look at what works elsewhere to develop that into our own programmes and in that way we'll get the best of all worlds," added Mr McDonnell.

Labour also published research, which, it said, showed 48 of the 151 billionaires listed in the latest Sunday Times Rich List had donated more than £50 million to the Tories since 2005.

The opposition party has calculated that by 2023/24, the Conservatives will have handed out "tax breaks and corporate giveaways" worth almost £100bn since coming to power in 2010.

Mr McDonnell accused the Tories of siding with "the billionaires, the bankers and big business".

He said: "No-one needs or deserves to have that much money; it is obscene. It is also obscene that these billionaires are buying access and tax breaks to Boris Johnson's Conservative Party.

"We know whose side Boris Johnson is on - the billionaires, the bankers and big business.

"Jeremy Corbyn and the Labour Party are on the side of the people, offering real change for our country, putting wealth and power in the hands of the many, not the few."

The Conservatives pointed out the "top one per cent" were paying a greater share of taxes than at any time under the last Labour government while tax receipts from business were at an all-time high.

Treasury minister Simon Clarke said: "Corbyn's Labour have revealed their true colours. They want to stop people from passing on their family homes to their children after they die.

"Rather than helping people to succeed, they want to take away your family home in higher taxes. Their plans would not hit billionaires - they would overwhelmingly hurt hard-pressed families."