UK divided: Theresa May launches defence of the free market hours after Corbyn demands 21st century socialism

The stark divisions in British politics are laid bare today as Conservative Prime Minister Theresa May launches a staunch defence of free market capitalism, just hours after Labour’s Jeremy Corbyn demanded 21st century socialism for the UK.

Ms May will declare the free market economy “the greatest agent of collective human progress ever created” in a major speech in the wake of Mr Corbyn’s conference appearance, which saw him brand Britain’s system “broken”.

The Labour leader’s intervention sparked a furious backlash from business groups who accused him of demonising the private sector, while big unions lined up behind Mr Corbyn, applauding his speech as visionary.

Fractious politics at home were mirrored abroad, as the UK was left on the brink of a trade war with the US, threatening tit-for-tat action in a dispute between two major aircraft manufacturers.

Experts said the row underlined just how tough it will be to secure a trade deal with Donald Trump’s US administration, while British negotiators still struggle to make headway in the current round of Brexit talks due to end Thursday.

With her party’s conference in Manchester just days away, Ms May will give a speech marking 20 years of the Bank of England’s independence – first implemented by Tony Blair’s New Labour.

She will say: “A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created.

“It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.

“It is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country.”

She will then warn that any attempt to abandon free market economics with “unfunded borrowing and significantly higher levels of taxation” would damage the economy and increase unemployment.

“Ultimately, that would mean less money for the public services we all rely on,” she planned to say.

It comes just hours after Mr Corbyn was met with a rapturous standing ovation in the Brighton Centre, for his first conference speech since the his party gained seats at the election and stripped Ms May of her Commons majority.

He slammed the Tories for still believing in “the same dogmatic mantra” which he summed up as “deregulate, privatise, cut taxes for the wealthy, weaken rights at work, delivering profits for a few, and debt for the many”

He added: “It’s as if we’re stuck in a political and economic time-warp.”

Mr Corbyn then went on to set out his vision of “socialism for the 21^st century” – drawing in nationalised utilities, new fines for business and taxes for the wealthy.

He said: “Our economy no longer delivers secure housing secure well-paid jobs or rising living standards.

“There is a new common sense emerging about how the country should be run.

“That’s what we fought for in the election and that’s what’s needed to replace the broken model forged by Margaret Thatcher many years ago.”

The British Chambers of Commerce, the Confederation of British Industry and Institute of Directors rounded on Mr Corbyn, while unions Usdaw and the GMB lined up behind him.

The sharpened divisions in politics at home also came amid fresh turmoil in the international free market order, with the UK squaring up for a fight with US firm Boeing, following a controversial decision by American officials apparently adhering to Donald Trump’s “America first” ethos.

A complaint by the firm has seen the US Department of Commerce propose a 220 per cent tariff on the sale of Bombardier's new C Series jets – an aircraft whose wings are made in Belfast.

Defence Secretary Sir Michael Fallon delivered a stark message to Boeing, that its behaviour risked lucrative contracts with the UK.

He said: “Boeing stand to gain a lot of British defence spending.

“We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters…this kind of behaviour clearly could jeopardise our future relationship with Boeing.”

Director General of the Institute of Export Lesley Bachelor highlighted how 2017 has seen a 48 per cent increase in the number of ‘anti-dumping’ cases taken up by US officials.

She said: “It does begin to show that it is going to be very difficult to secure a trade deal with these guys.

“It gives us a taste of what ‘America first’ really means.”

Meanwhile, UK and EU negotiators are due to give an update on Thursday of how the latest round of Brexit talks have progressed.

Britain is desperate for EU member states to declare that ‘sufficient progress’ has been made for discussions to move on to the lucrative EU trade deal that the UK needs after Brexit.

But European Council President Donald Tusk said on Tuesday he did not think that the UK had done enough to guarantee it would meet its financial obligations or to ensure the rights of EU citizens in the UK.