The Waugh Zone Tuesday July 24, 2018

 

1. MELTING ICE CAPS

This time last year, in the wake of her shattering snap election shock, Theresa May was under pressure from her Cabinet to respond to doorstep complaints from voters that nurses, teachers and others deserved a proper pay rise after years of austerity. The PM’s own chief of staff, Gavin Barwell, memorably admitted that it was one of the reasons he lost his seat. But there was always a worry among Tories (particularly those in the Treasury) that how you precisely funded the pay rise was as crucial as the pay rise itself. Slowly melting George Osborne’s icy pay cap was one thing, abandoning ‘sound money’ altogether was another.

May herself told Jeremy Corbyn at PMQs last July that they both wanted pay rises to reflect the contribution of public sector staff: “The difference is, I know we have to pay for them.” Given that since then May has pledged £20bn in an unfunded spending promise for the NHS, that sounds a bit rich now. Yet apart from some new cash for the nurses pay rise, it seems that the Treasury has indeed won the day on how to foot the bill for the other increases for teachers, doctors, soldiers, police and prison officers. The Sun got the story of the melting 1% pay cap on their front page, and the Times says all departments will have to fund them within current budgets.

‘Underspends’ are the first source for the extra money, but that won’t be enough for some departments so the question will be which projects or plans will be cut as well. The touted pay ‘rise’ figures will be worth watching closely too, with many unions warning that less than 2.3% inflation is still a real cut. What’s irritated some Cabinet ministers is the way they’ve been bounced into agreeing this in a short timeframe just so the PM can go away on hols with a nice headline. New Health Secretary Matt Hancock gets a better deal than most but he still won’t get an easy ride at his first Health Questions, or his first Health Select Committee hearing today.

The pay rises are listed among the avalanche of Written Ministerial Statements (21 in total) out today as Parliament clears its decks on the final day before summer recess. Governments of all hues can’t resist this practice, but it does leave many MPs feeling cynical about all those claims that May wants transparent, accountable government. Among the 21 worth watching today are ‘machinery of government’ changes from No.10, a ‘housing policy’ [the Green paper at last?], and a Department of Health and Social Care ‘update’.  As today is the last day of the Parliamentary term, it’s also the last WaughZone until September (see ‘Housekeeping’ below). I know, I know, how will you cope?

 

2. EXIT, PURSUED BY A BEAR MARKET?

The Cabinet awayday to the north east was followed by a serious rail journey delay as ministers headed back south last night. One minister was wonderfully wry as he texted me: “Leaving somewhere can sometimes take longer and be more complicated than you expected…. cracking on with my summer reading.” The metaphors for Brexit were indeed not difficult to conjure up and today we get another significant step on the journey to Exit Day.

Yes, the Withdrawal and Implementation Bill (already dubbed ‘WAIB’ by Whitehall, and pronounced ‘wayb’) is suddenly being published and an oral statement will be made. It will try to square off all the key details of our exit, from citizens’ rights to the size of the divorce bill to the length of the transition (sorry, ‘implementation’) period. Of course, those details won’t be nailed down until the autumn. The bill could end up suffering death by a thousand amendments from Brexiteers and Remainers alike, but many suspect that long before the legislation reaches its key stages there will be the ‘meaningful vote’ on whatever May brings back from Brussels.

Worries about EU citizens paying to register to live here, without yet getting any rights, were raised yesterday as MPs spotted key immigration rule changes were quietly laid before Parliament last Friday. But the wider issue is just how smooth Exit Day will be, and whether a ‘no deal’ Brexit will be followed by some kind of economic downturn or stockmarket correction. Maybe we will get some answers today from new Brexit Secretary Dominic Raab, when he appears alongside May’s chief Brexit official Olly Robbins, before the Brexit Select Committee at 2pm.

The PM spends most days working on Brexit in one way or another and a new New Yorker profile of her has a couple of interesting snippets that could be put to Raab and Robbins. One former British official in Brussels says he has lots of friends on the other side of the negotiating table “but they are fairly ruthless negotiators, and they are fucking us over.” The Brexit Committee could also ask about this line from Tim Dixon, who helps run Dover port, that Government departments are “not singing from the same hymn sheet” on a no deal scenario. “We haven’t got a contingency plan, because we don’t know how things are going to operate.” That’s not great news from the front line.

 

3. NEVER MIND THE BALLOTS

Jeremy Corbyn is in Birmingham this morning with his own post-Brexit emphasis on the UK needing to boost exports. He’ll talk about the “benefits” of a low pound outside the EU and call for a ‘Build it in Britain’ approach. It’s not quite ‘America First’, but you can see the parallels (see below for the Government’s own Trumpian twitch on national security today). Still, the Labour leader may face yet more questions about anti-semitism, particularly his response to last night’s emotional end-of-term PLP meeting.

Corbyn was not present for the meeting (aides insist he’d not been scheduled to attend), a fact that was lamented by Margaret Hodge afterwards. In a nutshell, the PLP agreed to hold a ballot in September to incorporate into its own rulebook the full international definition of anti-semitism, the one that the party’s ruling NEC decided it could not adopt fully into its code of conduct. The ballot will be held on the Wednesday when MPs return from summer recess (fortunately someone worked out that if it had been held on the first PLP meeting on September 10, that would have clashed with Jewish New Year). The result is a foregone conclusion, but Corbyn allies are relaxed about it precisely because the PLP’s own rules are not the same as the party’s code of conduct.

What will matter more is whether the NEC will back down at its own meeting in September. One option is to adopt all the IHRA examples but then add caveats as outlined by the Home Affairs Committee. I am told that the Jewish Labour Movement’s national executive meeting in Parliament last night had an impromptu visitor – Hodge arrived with Luciana Berger and Louise Ellman straight after PLP and was welcomed with a standing ovation. JLM, one of the party’s oldest affiliates, agreed last night to consider all legal avenues open to it. ‘The party have a few weeks to fix this,’ one source tells me.

John Prescott was pretty isolated last night as he tried to claim that Jewish Labour voters had not lost trust in the party or Corbyn (Ruth Smeeth had a poll showing 29% of Labour supporters did indeed think he’d failed to tackle it). The ex DPM even risked the wrath of colleagues by referring to the disciplinary case against Hodge, before PLP chair John Cryer intervened. Hodge yesterday revealed her own stern legal warning to the party over her case. I’d be surprised if the party didn’t resolve this very quickly indeed, especially after John McDonnell’s advice to drop it completely. Hodge supporters believe those present would confirm she didn’t swear and was angry rather than aggressive. Some Corbyn allies were indeed upset by Hodge calling her leader a ‘racist’ to his face, but others think it could all have been dealt with via a quiet word with the whips.

 

BECAUSE YOU’VE READ THIS FAR…

It’s the last ever BBC Daily Politics today. Here’s a classic old clip where the guests had to guess who was dressed as Santa (Meg Hillier had an advantage given her Islington expertise).  As the mince pies were handed out by an obscure backbencher, it’s probably the only time Andrew Neil ever uttered the words ‘yes please, Jeremy!’

 

4. CZARINA MILBURN

Britain’s new social mobility czar is called Milburn, but there the similarity with her predecessor ends pretty abruptly. Whereas Alan Milburn was a former leading Labour politician who was brought up by a single mum on a council estate, his replacement Dame Martina Milburn had what she calls an “Enid Blyton upbringing” in the Home Counties. She fondly remembers a life of “horse riding on a Saturday and church on a Sunday”. Still, in an interview with HuffPost, the Princes Trust and Children in Need executive says that doesn’t mean she hasn’t always been ‘passionate’ about social mobility, even though “I probably didn’t understand that is what it was called.” 

Dame Martina urged more people to come forward to join her commission, which has been treading water in the months since Milburn quit in protest at the lack of progress under May’s government. She suggests she won’t be a pushover but stresses that being ‘mouthy’ is not her approach. Asked if the gender pay gap was an issue for social mobility, she said it wasn’t, adding that “it depends on how you read the figures” as to how serious the gap was at all. And on whether austerity has damaged social mobility, she says: “I don’t think the stats show that it has, actually, oddly, because you would think that it would, but as I understand it social mobility has been quite flat for a long time”.

 

5. TAKEOVER MAKEOVER

Early on in her premiership in 2016, Theresa May appeared to strike a new tone on foreign investment by postponing approval of an £18bn Chinese plan for Hinkley nuclear power station. She eventually gave it the green light, but had put down a marker that ‘national security’ concerns were as important as the UK’s need to attract overseas cash post-Brexit. The Daily Mail, one of May’s strongest backers, has long campaigned for a more muscular approach on foreign takeovers more generally. So it may be pleased that today Business Secretary Greg Clark is unveiling new powers to block or unwind takeovers on national security grounds.

Under the plans, firms will be encouraged to notify ministers before any deals that could trigger security risks. The changes could mean the number of government interventions on national security grounds rise from one a year to up to 50. Of course, ‘national security’ is a catch-all that many in business are sceptical about. After all, Trump’s entire tariff war over aluminium and steel imports is based on the tenuous claim that the metals are vital to US security. We will find out tomorrow just how tough the EU is going to be on that particular topic when Commission President Jean-Claude Juncker arrives in Washington for talks with the President.

 

HOUSEKEEPING

As Parliament breaks up today, this is the last WaughZone until MPs and peers return in September. Unlike some morning emailers, I have a day job on top of this lovely task, so I won’t be totally idle.  I’d like to thank all our readers for your support – and for the tips and comments via text, phone, email, tweets and DMs that help ease the early starts. Oh, and apologies for the puns. See you all the other side of summer.

 

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