“We can’t trust the Tories on this but we shouldn’t just wait until we get into government. We should act now.
“One way is to mobilise shareholder power to demand companies uphold basic tax justice standards. Numerous institutions from churches to trade unions and pension funds have large scale shareholdings in many of the companies that avoid taxes,” he added.
He announced Labour is launching a shareholder campaign and is demanding companies sign up to the Fair Tax Mark, which awards businesses on their tax practices and transparency.
McDonnell also set out Labour’s plans for "inclusive ownership funds". Every company with over 250 employees will be expected to create a fund and the shares will be held and managed collectively by the workers.
“The shareholding will give workers the same rights as other shareholders to have a say over the direction of their company.
"And dividend payments will be made directly to the workers from the fund. The dividend payments workers will receive will be up to £500 a year,” said McDonnell.
Labour, he said, will ban zero hour contracts and raise the minimum wage to £10.
He also pledged to “reprogram” the Treasury on how it makes decisions, saying that the department’s spending is currently biased against the regions.
McDonnell revealed that the water industry will be the first be nationalised. The party also plans to nationalise the railways, energy and mail industries.
In response, the Confederation of British Industries (CBI) called on Labour to “meet business halfway” or they will “crack the foundations of this country’s prosperity”.
“No-one in business would disagree with the fundamental aims of these policies – to engage and motivate employees, deliver for customers and share prosperity. And it is good to hear the shadow chancellor say he is proud of the millions of businesses who contribute to communities across the UK.
“But with Labour’s current proposals, the fallout for the UK, its workers and customers would be a drop in living standards.”
CBI director general Carolyn Fairbairn added that “at a time of great uncertainty” Labour needs to “open their eyes” and work with business.