Labour's John McDonnell considers giving workers right to buy firms

A Labour government could give employees the right to take over their companies if they are sold, dissolved or floated on the stock market.

Shadow Chancellor John McDonnell says the party does not want to return to an era of widespread state ownership.

Instead, Labour would expand co-operatives and give workers the "right to own", he will say in a speech.

David Cameron has accused Labour of wanting to turn back the clock to the days of state ownership and strikes.

But Mr McDonnell will tackle this claim head on his speech, saying Labour had to move on from its traditional belief that state ownership was always the answer.

At the last election, he will say, "the Tories talked relentlessly, overwhelmingly about the future. Labour, strikingly, did not.

We cannot allow that to happen again. We cannot be small 'c' conservatives.

Labour has already announced its intention to return the railways to public ownership.

But when it comes to the wider economy, Mr McDonnell will say Labour should "look elsewhere" for solutions, and draw on its tradition of supporting workers' co-operatives.

He will signal support for giving employees in companies which are about to be sold off - or floated on the stock exchange - the first option to purchase the company.

The Tories have offered a Right to Buy, Labour would seek to better this. We'd be creating a new Right to Own," he will say in the speech in Manchester.

Mr McDonnell is also considering adopting the Italian government's policy of offering funding to help employee-owned enterprises to get off the ground.

With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we'd look to support these at a local level, working with local authorities, businesses and trade unions," he will say.

He will also urge Labour to embrace opportunities offered by the internet and new technology.

"Technology is proving disruptive. 

It can have terrible downsides - de-skilling and an accelerated concentration of wealth.

But it also opens up new possibilities - the explosion of sharing that the Internet can provide.

There is an entrepreneurial spirit at work here: not the theatrical meanness and one-upmanship of Gordon Gekko, but a desire to create something better for us all.