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Labour’s Shadow Chancellor: we just can’t go on like this

Image credit: REUTERS/Toby Melville

“We just can’t go on like this. We just cannot go on with this instability, uncertainty that there is in government, day by day and sometimes hour by hour”. Those were the words of Labour’s Shadow Chancellor, John McDonnell, delivering a speech at a Reuters Newsmaker event this week in London.

Describing the current state of British politics, McDonnell said Prime Minister Theresa May’s government was in a state of “disarray” and “chaos” over Brexit, adding that he believed there was no majority in Parliament for the draft deal that she agreed with the European Union last week.

Since striking the draft deal with the EU, May has faced an upheaval of criticism from within her own ranks—with some senior ministers resigning—as well as widespread disapproval of the proposals voiced across Parliament. However, the Prime Minster has since declared that she will fight to stay on in office, warning that a leadership challenge would only delay the UK leaving the EU, or result in a ‘no-deal’ Brexit.

Though, McDonnell said he believed if May’s deal is rejected in parliament, a ‘no-deal’ Brexit would also be voted down by MPs, adding: “I think the concerns that people have of falling off a cliff with a no deal arrangement—I think we can reassure that there is not a majority in parliament for it and they’ll be a majority against it. There is a will within parliament to prevent that happening”.

In this situation, it would result in a “war of attrition” in parliament, with amendments to legislation taking place and uncertainty continuing, McDonnell added. However, he said Labour’s alternative approach to exiting the EU should be “tested and discussed at least”, because “it could command a majority” in parliament. Failing that, though, it would push for a general election. Further, if it can’t get an election, the party would keep the option of a second EU referendum on the table.

McDonnell has been part of the Labour movement for most for his life, and has been a key figure in Labour’s left-wing resurgence since he was appointed Shadow Chancellor after Jeremy Corbyn became the party’s leader in 2015.

Following his speech, McDonnell was challenged on his remarks about Brexit and Labour’s relationship with the City of London—and, also, if he was a Marxist. “I’m a socialist”, he said, “you just have to accept the roots of the Labour party”.

The event’s discussion host, Alessandra Galloni, Reuters Global News Editor, posited that hedge funds were worried about the prospect of a Labour government, and feel it would be like a second Brexit. McDonnell responded: “What I have been trying to do is set up a complete open-door policy. Meet as many people as possible, lay out the plans. And, also say ‘look these are our objectives, if you agree to our objectives—and most people do—and you don’t like the route we are getting to them, tell me how else I can do it. You tell me another route, and we’ll listen to you and most probably, if we can agree, take it on board as well’”.

“That was interpreted by some as that we are pulling back. No, we’re not. We are being practical and pragmatic. The way we will win the next election is by building…consensus, everyone believing that these are common sense proposals.”.

On whether the City of London needed to be reformed, McDonnell said he believed that there were further aspects of regulation that need to be looked at, and his party was at the early stages of those discussions.

“In terms of the City—again, we are going to come back with ideas about further regulation, about what’s needed for the future to restore confidence—because I think there is still a lack of confidence. But more importantly, I want to establish structures where the finance sector is playing its role in the policy development and decision-making processes”, he said.

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