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John McDonnell: Labour will use "moral pressure" to get a better deal on Brexit

The shadow chancellor defended plans to accept Article 50. 

Labour will use “moral pressure” rather than blocking Article 50 to negotiate a better Brexit deal, the shadow chancellor has said.

With Parliament now more likely to have a say on triggering Article 50, there have been whisperings among the party’s rank and file that Labour should follow other smaller parties and vote against it.

But John McDonnell said Labour “will not seek to block or delay” Article 50, which starts the clock ticking on a two-year exit plan for leaving the EU. 

Instead, he said, the party would force the government to “look at the hard facts” and pressurise it to be more transparent on negotiations.

Pushed on what sort of leverage Labour had, if it didn’t threaten to block Article 50, McDonnell replied:  “It is the moral pressure we will be able to exert right across the country.

“I don’t think it will come down to parliamentary manoeuvres, I think it will be moral pressure.”

The SNP plan to vote against Article 50, and the Liberal Democrats have pledged to do so unless a second referendum is held. However, Labour MPs represent some of the constituencies that voted most heavily for Leave. 

The general public was waking up to the fact the government was not going to deliver on promises made during the EU referendum campaign, McDonnell said. 

He said: “I don’t think any government will survive in the long term unless they come to terms with these issues.”

The “wider debate within our society” can play a part both in the run up to triggering Article 50, and the final Brexit deal, he suggested.

In a speech ahead of the Autumn Statement, McDonnell echoed his leader’s comments that Brexit, followed the election of Donald Trump, was a “wake up call” for politicians. 

While launching a strong defence of the Bank of England governor, Mark Carney, who he said had to pick up the peices after Brexit, he nevertheless questioned the benefits of loose monetary policy.

"The Bank's actions were not cost free," he said. "I share those concerns about the consequences for inequality that follow from the version of quantitative easing that has been applied."

Taking questions after a speech ahead of the Autumn Statement, McDonnell repeatedly stressed his willingness to consider a bipartisan approach when dealing with the aftershocks of Brexit.

But he added that for a bipartisan approach to work, Labour needed to know where other parties stood on the main issues.

He claimed the Tory Cabinet was isolating Philip Hammond, the Chancellor. In reference to the secret deal struck with a major car manufacturer, he declared: “The CEO of Nissan probably knows more about the Brexit negotiations than the Chancellor does himself.”

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.