Afternoon summary
- David Davis, the Brexit secretary, has told cabinet ministers to prepare for the “unlikely” possibility that the UK will not be able to agree a Brexit agreement with the EU. (See 2.26pm.)
- A senior Nissan executive has said the company may “adjust” its business in the UK, depending on the outcome of Brexit. (See 2.43pm.)
- A Treasury minister has denied reports the government is considering a “death tax” to help fund social care. Speaking during Treasury questions in the Commons, Jane Ellison said “no” to Labour former health secretary Andy Burnham when he asked whether the Tories were pursuing a similar scheme to that mooted by Labour ahead of the 2010 general election. Burnham’s question was prompted by a report in today’s Times. (See 12.15pm.)
- Peers have defeated the government in a bid to stem the tide of pub closures. As the Press Association reports, the House of Lords backed by 278 votes to 188, a majority of 90, a move to require planning permission to be sought for a change of use or demolition of premises. Supporters of the amendment said this would enable local people to give their view on any proposed changes as part of the planning process. The vote to remove so-called permitted development rights from pubs came during the report stage of the neighbourhood planning bill.
- Philip Hammond, the chancellor, has been accused of sexism after advising a female Labour MP against becoming “hysterical” over Brexit-related business concerns. As the Press Association reports, Labour’s Mary Creagh warned 100,000 UK businesses have registered companies in the Republic of Ireland to “hedge their bets” given the “uncertainty” caused by the Brexit vote. Hammond was heckled by opposition MPs after urging Creagh “not to be hysterical”. Raising a point of order, Creagh told Speaker John Bercow:
In response to my recent Treasury question, the chancellor of the exchequer accused me of being hysterical. Can we have a ruling from you as to whether this sort of sexist language used to diminish women who make a perfectly reasonable point - that is the sort of language that would not be used had I been man.
My question on the registration of companies in Ireland had nothing to do with the condition of my womb travelling to my head, as is the traditional hysterics rhetoric. I expect that sort of language from the sketch writers of the Daily Mail, not from the chancellor of the exchequer.
Hammond replied:
I did not, of course, accuse [Creagh] of being hysterical - I urged her not to be hysterical. If my comments have caused [Creagh] any offence, I of course withdraw them unreservedly.
Asked the Chancellor to provide regulatory certainty post-Brexit. Was called "hysterical". #everydaysexism pic.twitter.com/gTGMZsrNMY
— Mary Creagh (@MaryCreaghMP) February 28, 2017
That’s all from me for today.
Thanks for the comments.
Pensioners who have emigrated to Spain, France and elsewhere in Europe are saving the UK about £450m a year in health care costs, a senior official at the department of health has revealed.
Paul MacNaught told the health select committee that the 190,000 British pensions living in Europe, mainly in Spain, France, Ireland and Cyprus, cost an average of £2,300 a year to the UK in payments to local health providers.
This compares to the £4,500 average annual cost of supporting a pensioner in Britain.
“This is one of the advantages of the current arrangements,” said MacNaught.
Starmer says Labour has 'no prospect' of winning general election unless things improve
Sir Keir Starmer, the shadow Brexit secretary, told a press gallery lunch today there was “no prospect” of Labour winning unless things improve.
The loss in Copeland was really serious. I don’t think some of the reasons put forward are compelling.
I’m very straightforward that if things don’t improve there is no prospect of us winning a general election.
It is a very bad result for the Labour party and we need to be honest about that.
A number of things came up, including the direction of travel of the Labour party, Labour’s ability to communicate and understand what people are saying to them and, of course, the leadership of the Labour Party and we all know that.
Six in 10 doctors from Europe working in the UK are considering leaving the country because of Brexit, a new survey by the General Medical Council has found.
Charlie Massey the chief executive of the GMC told MPs that while a survey was “not necessarily predictive of future behaviour” the results indicated a potential serious depletion in the workforce.
“It does send a worrying signal in terms of the stock of doctors currently working in the UK,” he said.
Some 2,000 doctors from the European Economic Area, about 10% of the total working in the UK, responded to the GMC survey, Massey told the Health select committee.
Department of Health has revealed that the UK forks out about £650m to EU countries to compensate their respective health services for Britons abroad.
The vast bulk of that goes on 190,000 British pensioners in Europe, Paul MacNaught, the DoH’s director of EU, international and prevention programmes has just told the Health select committee.
Of those, 70,000 live in Spain, 44,000 in Ireland, 43,000 in France and 12,000 in Cyprus.
McNaught told the committee the UK collects just £55m from European countries for Europeans treated in Europe with estimates that it could be theoretically due about £200m.
Updated
Boris Johnson's speech - Analysis
Sir John Major, the former prime minister, did not mention Boris Johnson when he gave his speech, “Britain and Europe - a reality check” yesterday, and Johnson was equally elliptical when he gave what will be remembered as “the pineapple speech” (see 12.50pm), but what both men were saying can only be understood with reference to the other.
Major’s argument was that the government has been far too optimistic about Brexit and that it has failed to warn the public about the potential problems. He did not identify any culprits by name, but he and the foreign secretary have previous (see 1.54pm) and he clearly had Johnson in mind in passages like this.
I have watched with growing concern as the British people have been led to expect a future that seems to be unreal and over-optimistic. Obstacles are brushed aside as of no consequence, whilst opportunities are inflated beyond any reasonable expectation of delivery.
Johnson responded today quite bluntly: “Come off it, sunshine.” (See 1.54pm.)
There were no substantial announcements in Johnson’s speech but, as often happens, a story emerged in the Q&A. The government has been criticised for asserting that it will be able to strike a free trade deal with the EU within two years. “Britain’s partners think that is bonkers,” Charles Grant, director of the Centre for European Reform, said in an insightful report published recently about the problems the UK will face getting a Brexit deal. Grant went on:
The fact that [Theresa] May proclaimed that everything could be done in two years makes Britain’s partners worry that 10 Downing Street is not fully in touch with reality.
Today Johnson seemed to concede that people like Grant have a point. He accepted that May’s timetable might slip. (See 1.30pm.)
But that was about the only concession in the speech to Majorite reality. In most other respects, Johnson defaulted to heady optimism and did not say anything about the potential difficulties Brexit would pose. Earlier in the day (see 11.55am) George Osborne said that the government would soon have to take decisions about how much immigration to allow after Brexit, or how many foreign students would still be admitted. Did Johnson have anything to say about this? No. Or what obstacles exporters might face outside the customs union? Or how the City will manage without passporting? Or what will happen to the border with Ireland, or to EU nationals living in the UK? In his speech last night Major said:
Negotiations are all about “give” and “take”. We know what the Brexiteers wish to take: yet we hear nothing about what our country may have to give in return. If anyone genuinely believes that Europe will concede all we wish for – and exact no price for doing so – then they are extraordinarily naïve.
But Johnson refused to acknowledge that there might be any downsides at all.
The omission of any discussion of the price the UK might have to pay to leave was particularly glaring. In his speech Major said the demand for €60bn may be unreasonable, but he accepted that Britain might have to pay something. “There are liabilities to be met: pension costs, legacy costs, contingent liabilities, a proportional share of work-in-progress,” he said. Ministers have done nothing to prepare the public for this possibility, and Johnson did not start today.
Instead, Johnson just kept going on about the “fantastic” trade deal that Britain would be able to strike, but even here he adopted a tone that would alarm Major. Johnson could not resist returning to his point about how the Italians would keep wanting to sell us prosecco after Brexit - and rolling out the old joke, “we’re pro-secco and by no means anti-pasto” - even though in the past this has offended the Italians and caused a mini diplomatic row.
“Smugness and bravura should be avoided,” said Grant in his CER report, giving advice on how British ministers should conduct themselves in the negotiations. Major said something similar in his speech, arguing: “A little more charm, and a lot less cheap rhetoric, would do much to protect the UK’s interests.”
Major’s key complaint was that government ministers are being too glib about Brexit. Johnson’s speech seemed to confirm he had a point.
Updated
Nissan may 'adjust' its investment in UK depending on outcome of Brexit, MPs told
Nissan may “adjust” its business in the UK, dependent on the outcome of Brexit, a senior executive has told MPs. As the Press Association reports, the car manufacturer announced in October that it was investing in production of new Qashqai and X-Trail models at Sunderland after receiving government assurances that EU withdrawal would not affect the plant’s competitiveness.
But chief executive Carlos Ghosn later said the company would “re-evaluate the situation” once the final deal is concluded. And senior vice-president Colin Lawther told MPs this morning that Nissan would “constantly review” its decision in the light of any material changes to its ability to trade with the remaining EU.
Giving evidence to the Commons international trade committee, Lawther said that Nissan’s preferred outcome from Brexit negotiations was for Britain’s relations with the EU to “stay as they are”.
In talks with the government, Nissan made “a strong request” for Britain to remain within the European Customs Union, said Lawther, who warned that a move to World Trade Organisation tariffs would “change the business circumstances” for the company.
Theresa May all but ruled out full membership of the customs union in the Lancaster House speech setting out her goals for Brexit last month. And speculation that the UK may have to fall back on WTO rules was heightened by her declaration that “no deal is better than a bad deal”.
Lawther told the committee that a move to WTO tariffs would change the business environment for Nissan’s UK operations, adding:
We would have to look at the degrees of change and adjust our business to take into account whatever this new trading platform would be ...
As ... circumstances change, and we wouldn’t wait until the end of the process, we will continually review the decisions that we take, based on anything that materially changes.
So at the moment we have got a set of circumstances we are happy with and we will honour that decision going forward.
But if anything materially changes, we would review constantly.
Asked about the assurances the government gave last year to help persuade the company go ahead with its Nissan investment, Lawther said:
The government gave us assurances that it was the government’s intention that they would have a competitive trading environment at the end of the process. I would expect that competitive trading environment be something that doesn’t detriment our business.
Ghosn’s suggestion that there could be “compensation” for car firms related to “compensatory measures, tax measures, infrastructure measures or competitiveness measures”, Lawther said.
This could involve measures such as lower corporation tax, duty-free movement of parts coming into and out of the customs union or a sector-specific deal for the automotive industry, he suggested.
Davis tells cabinet to prepare for 'unlikely' possibility of UK failing to reach deal on Brexit
At cabinet this morning ministers were told to prepare for the “unlikely” possibility that the UK will not be able to agree a Brexit agreement with the EU. This is from the Press Association’s report of the Number 10 lobby briefing.
A Downing Street spokesman said that Theresa May told senior ministers at the cabinet meeting that Britain was looking for a “smooth and orderly” Brexit.
“The message was that we are not going to fail, we are going to make a success of it,” said the spokesman.
“It is going to be difficult but our optimistic view is important.”
David Davis, the Brexit secretary, told cabinet that the government “is tackling what is its most important peacetime agreement” and it was “important that departments understand the challenges ahead”, said the spokesman.
“He set out the need for the government to support a smooth exit from the EU and the need to prepare not just for a negotiated settlement but for the unlikely scenario in which no mutually satisfactory agreement can be reached.”
The spokesman said that Davis’s Department for Exiting the EU was “still building its capabilities” nine months after its creation and would continue to build its capabilities during the negotiation process.
The government will be trying to negotiate two agreements with the EU over the next two years: one covering the terms of withdrawal (what happens to shared assets and liabilities etc), and another covering the UK’s future relationship with the EU (ie, a free trade deal). May wants to negotiate both at the same time, and conclude both within two years, although most observers think that the free trade deal will take much longer to agree.
But Davis’s comments suggest the government is making contingency plans for no deal of any kind being reached. That would result in the UK crashing out without any agreement as to a future relationship, and presumably both sides heading for the international court of justice in the hope of settling any disputes about money.
Updated
'Come off it, sunshine' - Johnson's response to Major's 'moaning' Brexit speech
In his speech Boris Johnson did not directly mention the speech from Sir John Major yesterday accusing the government of being overly-optimistic about Brexit. But his opening remarks were clearly aimed at the former prime minister. Johnson said:
It is absolutely fantastic to be here in front of an audience of people who [are] dynamic, energetic, can-do and actually get out there and sell things. Because sometimes I get a bit impatient when I hear people droning and moaning about the state of state of the world. And I hear them warn that the sky is about to fall on our heads ... And I feel like saying, ‘Come off it, sunshine.’
Every generation hears its prognostications of gloom. And look at us today. We are living longer than ever before. We are healthier than ever before ...
It is worth recalling that Major and Johnson have form. As a Telegraph journalist, in Brussels and later in London, Johnson to a large extent made his name as a commentator attacking Major’s government from a Eurosceptic perspective. In retaliation Major tried (unsuccessfully) to stop Johnson being included on the Conservative party’s candidates list, the first step towards becoming an MP.
Updated
Johnson accepts getting trade deal with EU could take longer than two years
This is what Boris Johnson said about how getting a trade deal with the EU could take more than two years. All the key figures in Brussels, and almost all trade policy experts, say that this is the case, although Theresa May and her ministers are saying they want to conclude a trade deal within two years and that this timetable is realistic.
Responding to someone who said that getting a deal might take longer than two years, Johnson said:
Time is [an issue.] You’re right. It depends how our friends and partners choose to handle it. They can play it long, they have electoral considerations, as everybody knows. I think there’s every reason why we [should] go this full tilt and get it done within two years. But let’s see how it goes.
Q: George Osborne said Brexit would be the biggest act of protectionism in the UK. Shouldn’t you be honest and tell businesses that some will prosper from Brexit and some won’t?
Johnson says he does not think Osborne said that.
But if he did, he would be wrong.
(The questioner did misrepresent Osborne. See 11.51am for the full quote.)
Q: John Major says the tone of trade deals is sour and that we need to show more charm. Do you agree? And do you accept it is not defeatist to raise concerns?
Johnson says he wants to be positive about this.
He says when he first became foreign secretary, people in other countries were in shock. They had not expected Brexit.
But now that mood has vanished. They want a good deal, he says.
He says there always will be a role for the UK in Europe.
He says Britain is still going to be there, contributing to Europe economically, in security terms and in aid terms.
People are starting to get that, he says.
He says people are staring to understand that you can have a strong EU and a strong UK.
Johnson says Liam Fox and his team cannot “ink in” trade deals with other countries now. But they can agree them in pencil.
Johnson's Q&A
Johnson is now taking questions - two from business, and two from the press.
Q: The EU will want the UK to keep its law in line with EU law if the UK is to have single market access? Can we get a free trade deal in two years? And what happens if that is not achieved?
Johnson says we have an unrivalled opportunity. We are already “flush” with the EU in terms of standards. So we should be able to do a fantastic deal.
He says the questioner is right to say timing is an issue. He says EU countries could “play it long”. But he thinks there is every reason to believe is can be done in two years.
- Johnson acknowledges that agreeing a trade deal with the EU could take longer than two years.
But he says there is a of goodwill. That goodwill is growing, he says.
Johnson says Britain is at its best when it is at its most global.
It has been overwhelming as foreign secretary to find that the country has friends around the world, he says.
He says of course the UK remains committed to its EU markets.
But it wants to be a global force too, he says.
Johnson says we are getting “the export ball back over the net”.
He says we have a trade surplus with South Korea.
He repeats a line he has used many times before about how we export boomerangs to Australia etc ... “and, I’m pleased to say, Nigel Farage to America.”.
The Foreign Secretary says that Britain is the most global of all the developed economies #BCCConf pic.twitter.com/DjrFIWjrFe
— BCC (@britishchambers) February 28, 2017
Johnson says Britain is the most global of the major economies.
He says 6m Britons - one in 10 of the population - live and work abroad. He is not sure why, but that is the case. He lists various jobs they do, adding that perhaps “the odd pirate and scoundrel” are among them too.
That means Britain has a strong global presence, he says.
That global quality of the UK is a fantastic benefit, he says.
He says when he visited a school in Pakistan, he asked the pupils who their favourite author was. And they said JK Rowling.
That is good for publishing in the UK. And it means more lunches for publishers in Soho, he says.
Johnson says a global Britain approach is right for Britain.
As other countries become more prosperous, they will buy more of our goods, he says.
He says it is right to spend 0.7% of national wealth on aid.
He says witnessing aid spending on education for girls in Pakistan has been one of the most moving things he has seen as foreign secretary.
Johnson says the UK wants to get a fantastic free trade deal.
And you know the arguments why that can be achieved, he says. EU nations are net exporters of goods to the UK, he says. He repeats his assertion about how the Italians will want to keep trading with the UK so they can sell us their prosecco .
Johnson says for the last 44 years the UK has contracted out its trade policy to the European commission. It is an excellent body, he says. But only 3% of the staff are British.
How can those bodies understand the needs of UK business and commerce with so few Britons employed?
Johnson says in 1990 37% of humanity lived in absolute poverty. Today that figure is less than 10%, even though the population has grown by 1.8bn.
He says Britain is preparing to be the lead campaigner for free trade.
And the UK can be a great free trading nation outside the EU, he says.
He says the government will use Brexit to create a regulatory environment of the kind the BCC has been crying out for for decades.
Johnson says if we close our markets, and put up barriers, we raise costs for those who can least afford it.
We stiffle innovation, he says.
He says when goods and services no longer cross borders, troops and tanks do so instead.
Johnson says trade is declining as a proportion of global GDP.
We are seeing a series of events where populations are supposed to be rebelling. People feel they are not getting a fair “suck of the sauce bottle”, as they say in Australia.
Johnsons says, in response, some politicians want to pull up the drawbridge.
But that would be the wrong approach.
He says the company that brings pineapples to the UK is the biggest employer in Ghana.
Johnson says people are living longer than ever before. And life is better before.
He asks the audience to remember when pineapples were rare, and came in gloopy syrup in tins.
Today there is a force that brings pineapples to London every night. The pineapples come from Ghana. He has been on this flight himself, sitting on top of chilled fruit.
What is the benign force that allow this? It is globalisation, he says.
Today globalisation is acquiring negative connotations.
But he wants to show that it is a force for good.
Boris Johnson's speech to the BCC
Boris Johnson is speaking now at the BCC conference.
He says it is great to be speaking to people who are dynamic.
Because sometimes he gets impatient listening to people moaning about the state of the world, or saying the sky is going to fall on our heads.
In other Ukip- related news, Arron Banks, the Farage ally and erstwhile Ukip donor, has suggested that he might stand against the Ukip MP Douglas Carswell at the general election, the BBC reports.
Could Banks be disciplined for this? Last week Paul Nuttall, the Ukip leader, said he could not take action against Banks because is is no longer a party member.
According to the party, Bank thought he was a member but had forgotten to renew his subscription. The party says he is free to rejoin if he wants.
Here is my colleague Peter Walker’s story on the latest Ukip shenanigans.
My colleague Peter Walker was at the Farage/Paterson press conference on fish. Nigel Farage was apparently keeping a low profile.
Owen Paterson delivers address on fisheries without Farage on panel table. Farage has vanished. Paterson doesn't look v happy.
— Peter Walker (@peterwalker99) February 28, 2017
"Any questions?"
— Peter Walker (@peterwalker99) February 28, 2017
"Where's Nigel Farage?"
A slightly empty-looking podium. pic.twitter.com/rA14MCyLRk
But Farage did eventually take questions.
Nigel Farage says Douglas Carswell needs to finally be expelled but that he's not involved and it's not up to him. pic.twitter.com/te9RcjVvSe
— Ellie Price (@EllieJPrice) February 28, 2017
Farage says he thinks Carswell should go, but also that he's not the leader and it's nothing to do with him. A mixed message.
— Peter Walker (@peterwalker99) February 28, 2017
Farage calls Carswell "a Tory party posh boy" who was scared of taking about immigration during the Brexit campaign. Rats in a sack
— Peter Walker (@peterwalker99) February 28, 2017
In her Times column today (paywall) Rachel Sylvester says the Conservatives are considering some form of levy on estates to help fund social care. Andy Burnham floated this idea when he was health secretary before the 2010 general election, but the Tories labelled it a “death tax” and their slogan was so effective that it killed all interest in the idea from policy makers for more than half a decade.
According to Sylvester, some Conservatives now think this was a mistake. Here is an extract from her column.
Now I am told that the Conservatives are considering returning to this explosive territory by examining how the assets of older people can be claimed by the state after their death to help pay for social care. After months of wrangling, Theresa May and Philip Hammond have agreed that something needs to be done to deal with a crisis in provision for the elderly that is causing chaos in the NHS as well as anxiety for families. The chancellor will announce in the budget next week that there will be extra money to relieve pressure on councils who are struggling to cope with rising demand. What is more interesting, however, is that the government is considering longer term reform that goes far beyond what both the Treasury and Downing Street see as the “sticking plaster” solution of a short-term injection of cash.
The debate around the cabinet table has moved away from the need to raise resources and on to the balance between the taxation of wealth and work. One cabinet minister told me: “There is an issue about inheritance. Should someone be able to pass their house on to their children without paying the cost of care or can you get access to some of that money?” The chancellor is among those who are convinced that those who can afford to make a contribution should pay ...
Ministers are also discussing the idea of introducing a compulsory social care levy on estates over a certain value. Many senior Tories admit, privately, that it was a mistake to denounce Labour’s scheme as a “death tax”. They are now paying the price for playing politics with such a serious issue. The levy would in effect be a retrospective insurance premium. Although there would be a cost to families, nobody would have to manage catastrophic care costs on their own and everyone could keep most of their inheritance.
Andy Burnham has tweeted this about the revelation.
Well, I can honestly say I've now seen it all in politics. Times reports Tories are dusting down my social care plan. pic.twitter.com/Ae4b2XNql8
— Andy Burnham (@andyburnhammp) February 28, 2017
And the Lib Dems have accused the Conservatives of hypocrisy. This is from the Lib Dem health spokesman Norman Lamb.
This is sheer hypocrisy from Philip Hammond. He used to call Labour’s ‘death tax’ plans shocking but now seems prepared to implement them.
The Conservatives chose to cut inheritance tax for the wealthiest and opted for a hard Brexit that will blow a £100bn hole in the budget.
Now our health and care services face paying the price and the chancellor is desperate for answers.
The Liberal Democrats will make the case for bold, long-term solutions to the crisis facing the NHS and care, and an end to cheap political point-scoring that has failed people for too long.
Osborne says leaving EU without trade deal would be 'biggest act of protectionism' in UK history
John McDonnell’s speech was well received by the BCC audience but it was a relatively routine restatement of some of Labour’s current economic thinking. In story terms, what George Osborne, the Conservative former chancellor, had to say in the panel discussion was probably more significant.
Here are the key points.
- Osborne said that leaving the EU without a trade deal would amount to the biggest single act of protectionism” in UK history. And he mocked the idea championed by some pro-leave campaigners that new trade deals with other countries could compensate for not having good, tariff-free access to the EU.
Let’s make sure that we go on doing trade with our biggest export market. Otherwise withdrawing from the single market will be the biggest single act of protectionism in the history of the United Kingdom. And no amount of trade deals with New Zealand are going to replace that we do at the moment with our big European neighbours.
- He said the government should continue to allow skilled workers and students from abroad easy access to the UK.
Now we need to have the debate about immigration, where I think it’s important we have access to skilled immigration from around the world, and that we’re a magnet for talent. I think it’s important for our universities to continue to attract students from around the world - indeed the government boasts that one in seven world leaders were educated in Britain at some point. Great, let’s make sure that continues to be the case.
- He said that the government had failed to spell out key aspects of its policy on industry and immigration. He said that this was understandable, given the difficulty of the problems the government faces, but his comments cast doubt on the value of the industrial strategy white paper published by the government recently.
You can produce any numbers of white papers on your industrial strategy, but unless you have answered the question ‘are you going to allow, in a way that is not currently allowed, the government to step in and provide support for an industry that has failed, which is not allowed because of state aid rules’ - if you can’t answer that question you haven’t really gone into the meat of an industrial strategy.
You can have a business policy, but unless you tell the business audience the kinds of people you are going to be able to recruit and the kinds of people you are not going to be able to recruit, there is a big missing part to it.
I’m not surprised all these questions haven’t been answered because they are very big questions and I’m not blaming the government because these are big issues which the British government has not had to think about for a long time.
- He said he believed that the government could get “positive answers” on issues like trade and immigration in its Brexit settlement. But he urged business groups like the BCC to lobby the government to press for their desired outcome.
McDonnell has now finished. He says that he would like to have taken questions, but that he has to get back to the Commons for Treasury questions.
McDonnell demands 'genuine support' for businesses on business rates in budget
McDonnell turns to business rates. Here is the extract from his speech on this released in advance.
The revaluation of business rates due on 1 April has quite rightly caused uproar.
Whilst few would disagree that a revaluation is long overdue, it has been handled atrociously.
It was delayed not for the best economic reasons, but for the best interests of the Tories ahead of a general election. It cannot be allowed to continue this way.
And it also cannot be right that whilst the average small shop will be hit by an extra £3,663 in their business rates over the next five years, some large retailers and online retailers will see a substantial fall.
The revaluation doesn’t reflect how our economy has changed since the last one.
And nor does it take account of the particular cost pressures smaller businesses are now under.
Labour have responded to fears about the impact of looming business rate hikes for some businesses by calling on the government to set up an emergency transitional relief fund and take a series of measures to ease the business rate burden for business.
Yesterday, we hosted an urgent meeting with leading business organisations, including representatives from the Chamber of Commerce, to discuss a radical shakeup of business rates in the longer term.
We believe that government action now is vital to reduce the impact on smaller businesses, and move towards making the local business taxation system fairer and closer to the real economy.
We’ve called for a £150m a year for three years transitional relief fund to be established, available to local authorities to distribute to businesses facing a “cliff edge” in their rates bills.
We want the shift from RPI to CPI uprating in rates to be brought forward three years.
We think, like yourselves, that this would soften the immediate blow to businesses.
But looking ahead, we think it is essential that plant and machinery are removed from the business rates system. It cannot be right that companies seeking to do the right thing, and investing for the future, are then penalised for doing so.
This is the exact opposite of how the tax system is supposed to function, and clearly out of line with best practice elsewhere.
For a country facing the productivity slump that Britain is now experiencing, additional taxation on investment like this cannot be justified.
Alongside more regular revaluations, removing periodic and unmanageable hikes, Labour is calling for a fundamental overhaul of the business rates system.
I am calling on the chancellor today to provide real and genuine support for those business struggling next week.
McDonnell says government should address the regional disparities in investment.
Labour would put in place legal rules relating to regional capital spending per head.
It would commit the investment needed to build a Crossrail for the north, he says.
It would set up a national investment bank, backed up by regional investment banks.
McDonnell says it is unacceptable to put EU nationals living in the UK in the position where they do not know their rights will be assured.
He says, even as a bargaining position, this is not convincing.
The government should resolve this now, he says, and guarantee that EU nationals can stay.
On Brexit, McDonnell says Labour accepts the decision to leave.
But it is important to get a good deal, he says.
He says the government is wrong to say no deal is better than a bad deal. No deal is a bad deal, he says.
McDonnell says there needs to be a change in direction. Too often governments have focused on short-term gains. That has led to investment being neglected.
He says research spending by the government has fallen by £1bn in real terms.
There has been a belief that governments cannot help business. As a result, productivity lags far behind other country. It takes a British worker five days to achieve what a German worker can do in four days, he says.
To turn this around will require government to take a lead.
McDonnell says we are meeting at a time of upheaval.
The vote to leave the EU has created fundamental challenges for us all, he says.
He says he agrees with George Osborne. Businesses are a critical part of that national conversation.
It is important that business’s voice is heard in the Brexit talks, he says.
John McDonnell's speech
John McDonnell, the shadow chancellor, is giving his speech now.
He starts by thanking the BCC for its advice.
He says he has to be back in the Commons for Treasury questions at 11.30.
George Osborne is addressing those questions now.
He starts by talking about devolution. The whole idea of having a mayor for Greater Manchester or the West Midlands is to give these areas a presence on the world stage.
On immigration, he says the country has answered the question. It wants to leave the EU. And we are leaving, he says.
But there are a whole set of other questions people were not asked, like what immigration policy you want and what trade policy.
People must decide if they want to carry on having high-skilled immgiration. And carrying on with farming subsidies. And will they follow free market trade policies, or let government intervene to protect industries.
He says a lot of the debate is “fighting the last war”.
Now we must focus on different issues. He says he wants to continue with skilled immigration, and having foreign students coming to the UK.
He says no amount of trade deals with New Zealand will replace trade with the EU.
There are answers to these questions, he says.
He says he has a message for the BCC. You can produce any number of white papers on industrial strategy. But will a new industrial strategy allow state aid to failing industries.
And he says government needs to be able to tell business if they will be able to recruit from abroad.
Government has not had to think about these questions before. But it does now, he says.
He urges business to make its voice heard. These decisions will be fundamental to the country’s future, he says.
Andy Burnham also criticised the current government for being less committed to the north than David Cameron’s government.
Burnham adds: "I did praise George at the beginning but I suspect the current administration isn’t as committed to the northern powerhouse."
— Jon Stone (@joncstone) February 28, 2017
Here are some tweets from earlier in this panel discussion.
Andy Burnham pays tribute to George Osborne for focus on North while Chancellor at #BCCConf pic.twitter.com/ouwyNlbf0d
— Steven Swinford (@Steven_Swinford) February 28, 2017
Surprise praise for @George_Osborne from @aburnhammp for " talking about the north more than ever before" #bccconf
— norman smith (@BBCNormanS) February 28, 2017
At the BCC conference George Osborne, the chancellor, is taking part in a panel discussion.
We’ve just had a round of questions, including two aimed at Osborne.
Does he think the government’s target of getting net migration below 100,000 is realistic?
And what did he think of Sir John Major’s speech?
Osborne will reply shortly.
I’ve come to the QE2 centre at Westminster for the BBC conference to cover the speeches from John McDonnell and Boris Johnson coming later this morning.
While I’ve been setting up, my colleague Peter Walker has been at the Nigel Farage press conference.
Ukip say Ukip chairman Paul Oakden has asked Douglas Carswell for a meeting this afternoon, and it's taking place.
— Peter Walker (@peterwalker99) February 28, 2017
No info on what it's about, though presumably it's going to be: please be nicer to Nigel. And get him a knighthood.
— Peter Walker (@peterwalker99) February 28, 2017
Nigel Farage, the former Ukip leader, is holding a press conference in Westminster at 10.30am. It is supposed to be about fish, and he is appearing with Owen Paterson, the Conservative former environment secretary.
But, given that Farage has written an article in today’s Telegraph saying that Douglas Carswell, Ukip’s only MP, should be thrown out of the party, the questions are unlikely to focus on haddock quotas.
The Telegraph has also got a good story today about emails exchanged between Carswell and Lord Pearson, a Ukip peer who was lobbying for Farage to get a knighthood last night. Pearson asked Carswell to intervene with Gavin Williamson, the Conservative chief whip, but the emails suggest Carswell did not push Farage’s case particularly hard. Here’s an extract from the story.
Lord Pearson asked Mr Carswell in the middle of December to approach Mr Williamson believing this offered “a sporting chance of getting around this committee”.
On December 30th Lord Pearson emailed Mr Carswell saying: “Dear Douglas, Could you let me know how your talk with Gavin Williamson went before Christmas? By phone if you prefer? Good wishes. Malcolm.”
Mr Carswell replied the next morning on December 31 – the day the New Year’s honours were announced – saying: “As promised, I did speak to the government Chief Whip.
“Perhaps we might try angling to get Nigel an OBE next time round? For services to headline writers? An MBE, maybe?”
Farage told the Telegraph the email exchange showed Carswell was “consumed with jealousy and a desire to hurt me”. But Carswell told the paper: “You cannot regard that email as anything other than being supportive that Ukip gets its fair share of peerages and honours.”
Boris Johnson will hit out at those projecting “doom and gloom on Brexit” in his speech to the BBC conference, sources have told the Guardian.
They said the foreign secretary would use the event to strike a positive tone about the future.
The intervention will be seen as the government’s response to both John Major and Tony Blair, who each railed against the potential negative impact of a hard Brexit.
Johnson will claim that countries are lining up to negotiate trade deals with Britain, telling ministers they are keen to strike.
Here is the full list of 33 Labour peers who voted with the Lib Dems on the single market amendment last night. (See 9.03pm.)
Lady Bakewell
Lord Berkeley
Lady Blackstone
Lord Bragg
Lord Cashman
Lady Corston
Lady Crawley
Lord Davies of Stamford
Lord Drayson
Lord Faulkner of Worcester
Lord Foster of Bishop Auckland
Lord Foulkes of Cumnock
Lord Giddens
Lord Hain
Viscount Hanworth
Lady Howells of St Davids
Lady Hughes of Stretford
Lord Judd
Lady Kennedy of The Shaws
Lord Knight of Weymouth
Lord Lea of Crondall
Lord Liddle
Lady Lister of Burtersett
Lord Livermore,
Lord Mandelson
Lord Monks
Lord Morgan
Lord Pendry
Lord Puttnam
Lady Quin
Lord Triesman
Lord Whitty
Lord Winston
One Conservative peer, Lady Wheatcroft, also voted for the amendment.
The full division list, with a breakdown by party, is here.
In a speech today on intergenerational fairness Debbie Abrahams, the shadow work and pensions secretary, will challenge the chancellor, Philip Hammond, to commit to keeping the “triple lock” on pensions beyond 2020, as Labour has done. The “triple lock” guarantees that pensions will rise every year in line with earnings, prices or by 2.5%, whichever is highest.
She will say:
It was shocking to hear the chancellor suggest that he would expose older people to the flawed austerity agenda - further proof that the Tories are abandoning older people.
The last Labour government were responsible for a historic reduction in pensioner poverty levels. A record that we remain hugely proud of.
The chancellor must use this Budget to provide clarity on the issue of the triple lock, and follow Labour’s lead by committing to the policy beyond 2020.
But it is odd that she is making this point in what is being billed as a speech on intergenerational fairness. Most experts think the “triple lock” militates against intergenerational fairness. The Commons work and pensions committee published a report on intergenerational fairness in November last year and it said the “triple lock” should be abandoned after 2020. It argued:
The triple lock should not continue beyond 2020. By then, the value of the new state pension relative to average earnings will be close to the historic high for the headline state pension rate. If maintained, the arbitrary boost the triple lock gives to the state pension relative to both earnings and prices will become ever harder to justify both in fiscal terms and from the perspective of intergenerational fairness. We urge political consensus before the next general election on a new earnings link for the state pension.
Sturgeon says 'Project Fear' would not work in second Scottish independence referendum campaign
Theresa May is due to trigger article 50 next month and, when she does, that could mark the moment when Nicola Sturgeon, the Scottish first minister, decides whether or not to go ahead with her proposal to hold a second independence referendum.
In an article in the Times today (paywall), she argues that if there is a second referendum, it will be because of May’s “sheer intransigence”.
In good faith, the Scottish government published a compromise position, entitled Scotland’s Place in Europe. We accepted, reluctantly, that we would leave the EU, but argued for the UK to stay in the single market or, if that was not possible, for the UK to seek as part of its negotiation an outcome that would allow Scotland to do so — and to agree to a rebalancing of power across the UK to take account of the post Brexit landscape and enable any different decisions that Scotland might want to take.
Instead of meeting us halfway, however, the UK government’s approach has been “its way or no way”.
It ruled out UK single market membership with no consultation with the devolved administrations. It has talked about special deals for the car industry and others, but refused to countenance any form of differential approach for Scotland ...
If an independence referendum does arise, it will not be down to bad faith on the part of the Scottish government, but to sheer intransigence on the part of the UK government
Interestingly, Sturgeon also argues that, if there were to be a second referendum, this time unionists would not be able to run a “Project Fear” campaign.
One last point. If there is to be a referendum, those of us advocating independence will face tough questions. We will have a duty to make our case.
But so, too, will those who oppose independence. Brexit, with all the uncertainties it entails, will make it impossible to present the UK this time as a “safe haven”. And with so many of the promises made by the No side in 2014 already broken, it will be more difficult to get traction for a Project Fear approach.
Indeed, ridiculous threats of a hard border and an end to trade with the rest of the UK will ring even more hollow when those making them are at pains to assure Ireland of the opposite.
The government has won its first vote on the article 50 bill in the House of Lords. There was a division quite late last night on an amendment tabled by the Labour peer, Peter Hain, saying the prime minister should commit to keeping Britain in the single market before she triggers article 50. Lib Dem peers backed the Hain amendment, but it was opposed by the Conservatives and Labour and was defeated by 299 votes to 136.
In the debate Lady Hayter of Kentish Town, the shadow Brexit minister, explained why Labour was not supporting Hain’s move. She said accepting the amendment would mean acting “as if the referendum hadn’t happened” and effectively “asking the prime minister to eat her own words”. She went on:
With regard to free movement, we cannot simply airbrush this from the referendum decision. For if we turn round to those who voted out, and we say ‘yes we are out, but actually we are still having everything exactly as it was, we are still having free movement unchanged’, I think that might emit some surprise.
But after the vote the Lib Dems criticised Labour for supporting the government on this. Lord Newby, the Lib Dem leader in the Lords, said:
By far the best option for our economy is to stay in the single market. Unfortunately Theresa May’s Ggvernment is hell bent on dragging us towards a hard Brexit.
Whatever deal May comes back with is quite simply not going to be as good as remaining in the single market. That is why we voted to ask her to think again on this vital issue.
It is extremely disappointing that Labour chose not support this amendment despite the costs of a hard Brexit on working people’s jobs and prosperity.
Peers do not debate the bill again until tomorrow, but we are likely to hear plenty more on Brexit today. Here is the agenda for the day.
Here is the agenda for the day.
9.45am: The British Chambers of Commerce conference opens. At 10.20am there is a panel discussion featuring George Osborne, the former chancellor, Andy Burnham, the Labour candidate for mayor of the Greater Manchester, and Andy Street, the Conservative candidate for mayor of the West Midlands; at 11am John McDonnell, the shadow chancellor speaks; at 11.55am Greg Clark, the business secretary, speaks; and at 12.40pm Boris Johnson, the foreign secretary, speaks.
11.30am: Philip Hammond, the chancellor, takes questions in the Commons.
1pm: Sir Keir Starmer, the shadow Brexit secretary, speaks at a press gallery lunch.
2.15pm: Sir Julian King, the European commissioner for security, gives evidence to the Commons home affairs committee.
As usual, I will be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to post a summary at lunchtime and another in the afternoon.
You can read all today’s Guardian politics stories here.
If you want to follow me or contact me on Twitter, I’m on @AndrewSparrow.
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