Economy 29 June 2016 Jeremy Corbyn is not standing down – 172 Labour MPs cannot drown out democracy The Labour Party could right now be exploiting a bitter Conservative leadership contest, writes Shadow Chancellor John McDonnell. Getty Sign UpGet the New Statesman's Morning Call email. Sign-up The shadow chancellor writes exclusively for the New Statesman amid one of the most turbulent weeks in politics this century. The “coup” taking place in the Labour Party The instability from Brexit has extended into the Parliamentary Labour Party with members of the shadow cabinet standing down. I would like to thank all of those who have participated with me for their work. Frustratingly, this has come at the worst possible time for our country. And at a time which we in our party could have used to reset the economic narrative that the Tories planted in the public during the summer of 2010, when our party was in the midst of a leadership contest. Our party right now could be exploiting a bitter Conservative leadership contest that’ll probably lead to electing a Tory leader who will be responsible for any economic fallout from Brexit. The Tories have peddled lies over the past six years over the management of our economy and the state of the public finance, which the decision last Thursday is sadly exposing. I strongly believe that if some colleagues are not careful then they may cause irreparable damage to our party and the country. The Labour Party changed last September. Jeremy was elected with the largest mandate of any political leader in the history of our country. Our party’s values of democracy and solidarity seem to be asked of the membership and always met. Sadly not by some members of the PLP. There are those in our party who could not come to terms with the fact that a quarter of a million members could clearly see that the our party’s broken election model has led to two back-to-back defeats and needed replacing. Like the wisdom of crowds, our membership understands that we can’t keep going on doing the same thing electorally and getting the same results. I believe that we can all still work together, but I feel some MPs need to get off their chest what they have been holding back since last autumn. Maybe then they will hear the message that our membership sent them. The truth is that Jeremy is not standing down. In the Labour Party our members are sovereign. There was an election held and a decision made, and 172 people cannot outweigh a quarter of a million others. It would risk sending the worst possible message we could send as a party to the electorate – that Labour does not respect the democratic process. The economics of Brexit The Leave vote delivered an immense shock to the political system, creating great instability. Of immediate concern is the deteriorating economic situation. Credible economic forecasters virtually unanimously warned that leaving the European Union would be an enormous shock to the economy. The disagreements centred on the severity of the shock, and the long-term damage done. To that initial shock must be added the realisation that there was no plan made for a post-Brexit Britain. George Osborne has not secured the foundations of our economy and the market volatility reflects that missed opportunity. With turmoil continuing, and major employers already threatening redundancies, the immediate task is to stabilise markets and reassure investors and savers that financial institutions remain rock solid. The measures announced by Bank of England Governor Mark Carney early on Friday morning, and the later statement from the Chancellor, are to be welcomed and we have requested a briefing under Privy Council rules on the financial authorities’ contingency plans. It is also reassuring that George Osborne has now moved a threatened post-Brexit austerity Budget until at least the autumn. Nonetheless, with a recession now forecast, any attempt to push further austerity measures in response to the crisis would be an act of exceptional economic folly. The Chancellor’s own fiscal targets have long since been missed and simply redoubling the misery of spending cuts and tax rises will not bring them any closer to achievement. What is needed in a crisis like this is urgent government action to shore up investment, already falling before the vote. Shovel-ready projects should be brought forward, creating jobs and focused on beginning to rebuild those parts of the country currently most deprived – and where the vote to Leave was strongest. As a country, we will get through this crisis, and we will do so when we no longer tolerate a situation in which too many of our people are excluded from even the chance of prosperity. The referendum result I have been in consultation with many economists and trade union and business leaders since the early hours of the morning when we learned the result. I hope to give a speech this Friday going into further details of Labour’s economic response, but the result last Thursday came as a blow to many of us in the Labour Party. All wings of the Labour movement fought hard, and two-thirds of our voters swung to Remain – the same as the SNP, and far more than the Tories, who split 60:40 for Leave. Labour will now be fighting to ensure whatever negotiations now take place, and whatever proposals the government chooses to bring forward, will maintain hard-won protections for working people in this country. The new Labour leadership inherited the Labour In campaign last year. Obviously, as with any campaign, we will now have to reassess, but the hard work of the staff who worked on the campaign cannot be questioned. They did a fantastic job. Jeremy Corbyn also managed to help get out a larger number of our voters than the other main Westminster leaders across the country. But the sad truth is that we lost regardless. We need to learn lessons of the referendum and the general election campaigns, and question whether the way we campaign as a party needs to be changed. It is clear that we cannot fight the next election using the same outdated practices and policies that were in place in the last two general elections, and the recent referendum. We cannot continue to do the same things in the same ways and get the same results. Those people who need a Labour government the most cannot afford it. › In this week's magazine | The Brexit lies John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. Subscribe For daily analysis & more political coverage from Westminster and beyond subscribe for just £1 per month!