Watch: Richard Leonard and John McDonnell on Labour’s economic plans and constitutional chaos

Ben Wray

CommonSpace provides analysis on comments made by the shadow chancellor and Scottish Labour leader asserting the importance of economic transformation from putting forth mixed messages on constitutional matters

COMMONSPACE spoke to Scottish Labour leader Richard Leonard and Shadow Chancellor John McDonnell on their pre-election campaign stop in Glasgow.

The rally at the City Halls in Merchant City highlighted many of Labour’s proposals for radical economic and social change, including changes to corporate governance, a new industrial strategy and £20bn for Scottish green industrial investment.

At the forthcoming Labour conference measures including the abolition of private schools and a Green New Deal to achieve carbon neutrality by 2030 will be proposed.

Leonard’s speech to the rally aligned the Scottish party with this radical vision.

Besides a wider promotion of alternative modes of ownership and a democratisation of the Scottish economy, Leonard aimed at changes to the economics of the Union. Among his proposals were reforms to Scotland’s fiscal arrangement with the UK and the extension of the Scottish Government’s borrowing powers.

READ MORE: Analysis: Leonard, Corbyn and the two souls of Labour socialism

“Scottish Labour will propose an overhaul of the Block Grant Adjustment mechanism and a review of the wider Fiscal Framework so that a floor is provided and so that the adjustment on social security is not downwards – but upwards – according to Scotland’s needs,” he said.

“Although Holyrood now has borrowing powers, we want these to be extended so that we have powers fit for a Parliament.

So we are proposing that Scottish Government should be able to borrow and issue bonds for both resource and capital spending without restriction.”

The great advantage Scottish Labour should have here is maximum access to a UK wide party that can form a Westminster Government. Leonard, McDonnell and Corbyn would all be singing from the same socialist Sunday school hymn sheet (at least on the economy), whereas the SNP would be bartering as part of a more uneasy confidence and supply or informal arrangement. Priorities would lie in different quadrants for possible governing partners, especially now that Labour say there would not be an independence referendum in the ‘formative years’ of a Labour government.

READ MORE: SNP hit back as Labour claim indyref2 should only take place after the ‘formative years’ of Corbyn government

But what Labour make up for in heavy duty policy proposals they unquestionably lack in simple, straightforward and coherent responses to the constitutional crisis.

During his interview with CommonSpace, Leonard said he did not think that it had been demonstrated that the people of Scotland wanted a second independence referendum. The huge marches for Scottish independence – the largest continuous street movement in Scottish history – apparently do not indicate this. Nor was this indicated by any recent polling on independence, the polling position of the SNP, or the fact that a majority exists in the Scottish Parliament for a second independence referendum, with mandates secured in the 2016 Holyrood elections.

In an interview with ITV Border, Leonard went even further, saying that even a majority of pro-independence MSPs at the next Scottish elections wouldn’t mean another independence referendum.

Labour insist their position on Brexit is clear. But there remain several competing attitudes within the party on the way forward. Leonard and McDonnell both affirmed their support for Remain in a second referendum at the City Halls event. This is a departure from previous years.

READ MORE: Exclusive: Scottish Labour ‘kamikaze unionists’ issued indy parliamentary statement against Leonard’s wishes

There will inevitably be questions asked about how a second referendum on EU membership is desirable but a second independence referendum – in the ‘formative years’ or otherwise – is not.

There are also questions about how the Labour leadership can reasonably make the case that they want to negotiate a deal to Leave the EU and then vote against that deal in a referendum.

These quandaries squarely identify Labour’s dilemma. It wants to promote a transformative economic agenda above all else. But its commitment to achieving this thought the extant British state leaves it with an ultimately ambiguous relationship to the institutional apparatus it wants to overturn.

The political moment is largely favouring forces, including the Brexit Party, Plaid Cymru, the Liberal Democrats and the SNP, that have simple and direct responses to the constitutional crisis. The remaining unknown is, can an insurgent campaign on radical economic policies be enough to create another Labour swing, as in 2017? We will likely find out soon.

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