‘We can’t allow the City to sink beneath the waves’

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‘WHILE there is a need for fundamental reform for the City, neither should we just allow it to sink beneath the waves,’ shadow Chancellor John McDonnell said yesterday.

He was speaking at a press briefing in London in response to the results of the EU referendum. The shadow chancellor outlined five guidelines which he said should be followed in the UK’s exit negotiations with the EU.

These are:

1. Freedom of trade for UK businesses with the EU and for EU businesses with the UK.

2. Protection of residency rights for EU citizens living in the UK, and UK citizens living elsewhere in Europe.

3. Existing protections at work.

4. The UK’s role in the European Investment Bank.

5. The rights of UK financial services to win business across the EU to be maintained.

‘Any path through the negotiations that does not reflect these guidelines will be liable to have severe consequences for jobs and protections at work,’ he said. Amid ‘intense political and economic uncertainty’ following the referendum result, McDonnell said: ‘I think it’s absolutely critical that all parties and all politicians recognise their responsibility now and the role they have to fulfil in securing the country’s interests.’

Responding to Osborne’s announcement yesterday that he is finally dropping his surplus target, McDonnell said: ‘I welcome the Chancellor’s decision to finally listen to the calls made by myself and Jeremy Corbyn over the last nine months to drop his failed surplus target.

‘It is only a shame he was not more realistic sooner, as under Jeremy Corbyn Labour has been unequivocal in its opposition to failed Tory austerity. Sadly the vote last Thursday for Brexit has only brought forward what was inevitable.

‘The Chancellor had already dropped his other fiscal rules on welfare and debt at the Budget in March, and according to many economists he was expected to be forced to drop this one too.

‘In fact, there were no credible economists that could be found to support the Chancellor’s surplus target in the first place. And we are not dropping our Fiscal Credibility Rule as it’s robust and flexible enough to provide the investment our economy needs.

‘The truth is, as Labour consistently warned, George Osborne’s recovery built on sand was underpinned by a fiscal rule that is not robust or flexible enough to equip our economy for any potential shocks it may face.’

During his speech, the shadow chancellor also reiterated Jeremy Corbyn’s determination to stand up to the right-wing attempted coup in the party and underlined that Corbyn was ‘staying as leader’.

He said: ‘If there is to be a Labour leadership election, let’s do that in a comradely, amicable fashion, argue the points of difference on policy and then come together and unite behind the democratic decision of our members.

‘I find it really disappointing. Just at a time when our country needs us and people need to step up to the plate, now is not the time to stand down. Just behave responsibly. It isn’t just our party members who need us to do our job, it is the country that needs us to do our job.’