The Conservative party must fight back against John McDonnell’s brand of Labour lunacy

At the time of John McDonnell’s elevation to Labour’s front bench in September 2015, the veteran left-winger was better known for praising the “bravery and sacrifice” and “the bombs and the bullets” of the IRA than for any coherent economic policy.

However, his personal website at the time contained a basic manifesto calling for a 60 per cent top rate of tax with an additional levy on the top 10 per cent of earners. He had also written about the need to bring the entire banking system into public ownership in order to “take control of our casino economy” and had previously described his interests as “fermenting the overthrow of capitalism”.

In the two years since he and Corbyn won control of the Labour party, McDonnell has worked hard to soften his language and appear reasonable. His fag packet plan to crush the rich was quietly removed from his website and today he’s more likely to talk about “Scandinavian-style social democracy” than a Marxist revolution.

Read more: John McDonnell quizzes Hammond on Saudi Aramco

But regardless of the language he uses to describe his policies there is little doubt that his long-held hard-left vision is now the settled Labour position.

Even his critics, among whom we count ourselves, must applaud the way in which he has taken his soap-box socialism from the fringe of public debate to the heart of British politics.

However, while we can recognise his tenacity and undoubted political success (in the Labour party if not, yet, the country) we must continue to sound the alarm. Labour has been banging the nationalisation drum louder and louder in recent months, but clarity over how it will be orchestrated has not yet emerged.

Read more: Labour could cause a run on the pound, warns Labour

Blithely telling the BBC yesterday that ‘profits’ will pay for the nationalisation cost doesn’t hold up when it’s the ‘excess profits’ he has a problem with in the first place. McDonnell also wants to bypass the market and have MPs determine the value of the compensation given to unlucky shareholders.

These new bonds would amount to little more than an IOU on Labour-headed notepaper.

As the opposition becomes increasingly emboldened the Tory party has to remember what it’s for and meet this economic lunacy head on. It will be politically challenging to do so, but potentially catastrophic if the challenge is ducked.