John McDonnell took to the LSE last night for the latest event in his “New Economics” series. Though his speech did not include any new policy announcements, McDonnell was in frank form in the Q&A that followed. He conceded that “people won’t vote for a divided party” and that Labour had to “learn some lessons about how to handle the media”. The shadow chancellor, who is spoken of by insiders as an increasingly dominant figure, also proposed that the Treasury be broken up into an economic ministry and a finance ministry (an option considered by Tony Blair to curb Gordon Brown’s power). Of the hostility towards Jeremy Corbyn among Labour MPs, he said: “There’s a small group within the parliamentary party who haven’t come to terms with Jeremy’s mandate”.
But McDonnell is also keen to reach out. He revealed that he had asked Rachel Reeves to join Labour’s economic review, praising “superb” recent pieces by the former shadow work and pensions secretary. But Reeves, regarded by many colleagues as Labour’s most accomplished economist, won’t be accepting McDonnell’s now public invitation (which some suggested was aimed at forcing her hand). A source told me: “Rachel met with John McDonnell a couple of weeks ago to talk about her work on savings, pensions and wealth. While Rachel has made it clear that she doesn’t want any formal role in the economic review, she’s of course happy to feed in her ideas as John develops his own ideas in this area.”
Reeves’s decision not to join Team Corbyn is perhaps unsurprising. A few weeks ago, the Treasury select committee member accused the Labour leadership of a “derilection of duty” by “focusing inwardly on issues that don’t really resonate with the public” such as Trident. But McDonnell’s offer shows how he wants to shed his sectarian image after being criticised by MPs for denouncing the “narrow right-wing clique” based “around Progress”. His remarks led Alison McGovern, the chair of the group, to withdraw from a planned role in Labour’s inequality and child poverty review.
Unlike some Corbyn supporters, McDonnell has spoken often of his regret at the number of shadow cabinet members who chose not to serve under the Labour leader (12). When I interviewed him last November, he told me: “I’m trying to bring them all back in if I can, they’ve all got talents and they’ve all got a contribution to make”.