Angela Rayner has warned the “disjointed” and “dysfunctional” economy is crushing Britain’s “entrepreneurial spirit” as she pledged Labour would “unleash” the UK’s potential.

The deputy Labour leader made the case for rewarding employers who want to do “the right thing”, so they can help promote “sustainable” growth.

Speaking at a fringe event on jobs and work in Liverpool, Ms Rayner said Labour would ensure “all levers of the public sector are looking outwards” to “support our social values” and help businesses get a “fair crack at the whip”.

She added: “Those social value elements … whether that’s about skills, whether that’s around, well, what’s our economy being driven for, what do we want to produce and how do we want to produce it?

“Is it linking to our targets around climate change, is it linking to our targets around infrastructure and security for the UK?

“Is it linking to the new technologies and the entrepreneurs and is it working for the businesses of today? And is it working for the businesses of tomorrow?

“Because at the moment it’s disjointed, dysfunctional and prohibiting that inspiring entrepreneurial nature that I think is quite unique to the UK and has always set us apart, and why we’ve always been one of the world leaders is because we do have great entrepreneurial spirit in the UK. And we want to unleash that potential.”

In her first speech to the Labour conference on Sunday, Ms Rayner said the party would give small enterprise a “level playing field” at winning Government contracts, vowing to “cut red tape and streamline the bidding process, giving small businesses a genuine shot”.

At Tuesday’s fringe event, she said the party wants to “push public procurement in a direction that speaks to our values as a nation”.

This would mean that “employers that want to do the right thing can be rewarded for that,” she said.

“We want those businesses to do well and we want them to be able to grow our economy in a far more sustainable way.”

Ms Rayner, who is also Labour’s shadow secretary of state for the future of work, argued the Tory approach is “not a way to run the economy”, with “short-termism” now accounting for mere days, rather than years.

“We used to think short-termism was a couple of years, now it’s six months,” she said.

“It’s like, how can a business survive and plan if you don’t know how you’re going to be supported and what’s going to happen after six months.

“And that causes shocks in the economy as well. Not only is it difficult for business, but it’s also an economic problem when the market (has) got no confidence that we know what’s going to happen.

“I mean, I’d say it’s even six days at the moment, the way things are going, which is just not a way to run the economy and to support business and to help us thrive.”