Labour will vow to bring billions of pounds of public services back in house in fresh blow to outsourcers

Labour is set to mount a fresh assault on business with the shadow chancellor expected to set out plans to bring billions of pounds worth of outsourced public services back in house if it wins power. 

John McDonnell is understood to have drawn up draft laws that would force government departments to favour providing services themselves unless absolutely necessary. 

That would prove troublesome for the likes of Serco and G4S, which run prisons and house asylum seekers, and Capita, which assess benefits claims and runs Whitehall IT systems. 

Mr McDonnell’s speech unveiling the plans on Saturday will come a day after Labour’s London mayor, Sadiq Khan, unveiled plans to cap housing rents in the capital,…