McDonnell calls for Brexit deal with close single market links

By David Hughes, Press Association Chief Political Correspondent

A Brexit deal involving a customs union and a "close" relationship with the single market would win a majority in the Commons and have the backing of business, John McDonnell has said.

The shadow chancellor said Labour MPs would vote in favour of a Brexit deal that "protects jobs and the economy" but acknowledged that was "not the way it is at the moment" under Theresa May's strategy.

The Labour frontbencher was speaking after a meeting with senior business figures in the City of London.

Speaking to reporters at Bloomberg's office in the City, he said: "The big issue really today was Brexit, where we are going from here."

Following the meeting with business figures he said: "We are as worried as they are about the uncertainty and the lack of assurance coming from Government about a deal."

He said Philip Hammond had to stand up in the Cabinet and say "there has got to be a deal", rather than "pandering" to the back benches.

A no-deal Brexit would be "pretty catastrophic" and "we will support a deal that the Government brings back if it protects jobs and the economy, simple as that".

Asked what the chances of that happening were, he said "not the way it is at the moment" due to Tory divisions.

"Our problem continuously is you never know who is in charge, you never know which faction is dominant from one day to the next."

Mr McDonnell said business groups had backed Labour's approach to a transitional deal, a customs union and close links to the single market.

"We have got to secure a deal. A customs union, a close and collaborative relationship with the single market, I think there is a deal to be had.

"I think the Europeans will offer a deal, I think that would be acceptable to us on that basis.

"There is a deal to be had if the Government sensibly negotiates."

Labour has said it will vote against any deal that does not meet its tests and would then call for a change of government in a general election.

If that does not happen, the party is open to the option of a second referendum on the terms of Brexit, with Parliament deciding whether the option of remaining in the EU is on the ballot paper.