LABOUR will impose a “Robin Hood” tax on stock market transactions and use the billions of pounds it would raise to repair lasting damage caused by the bankers’ crash nearly a decade ago, John McDonnell said at the weekend.

Up to £26 billion would be raised over the next parliament by applying a tiny tax on transactions that will also put a stop to the most dangerous short-term speculation.

The announcement comes after Labour vowed to renationalise key industries, such as rail, mail and energy, and to expand public services — policies outlined in a leaked draft of its manifesto.