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The Guardian - UK
The Guardian - UK
Politics
Andrew Sparrow

Brexit: Hammond says UK would reject any trade deal not including financial services - Politics live

Philip Hammond leaves the stage after delivering a keynote speech on Brexit at HSBC HQ in Canary Wharf, London.
Philip Hammond leaves the stage after delivering a keynote speech on Brexit at HSBC HQ in Canary Wharf, London. Photograph: Stefan Rousseau/AFP/Getty Images

Afternoon summary

  • Philip Hammond, the chancellor, has signalled that the UK would reject any UK-EU trade deal that did not include financial services. (See 5.30pm.)
  • Guy Verhofstadt, the European parliament’s lead Brexit spokesman, has said there should be an “association agreement” between the UK and the EU after Brexit. Speaking at a news conference to mark the publication of a resolution on UK-EU trade, which MEPs are expected to vote for next week, he said:

In order to break the deadlock we now face, I believe it is important that the UK Government now seriously considers engaging with the European Parliament’s proposal for an association agreement, as catered for by Article 217 of the EU Treaty. I am convinced this will allow both the EU and the UK to unlock a lasting deep and special partnership for the future.

We look forward to receiving some further clarifications from the British government regarding citizen’s rights, as a number of outstanding issues remain unresolved. We do not accept the United Kingdom’s negotiating position that maintains discriminations between EU citizens arriving before and after the start of the transition period.

The parliament’s resolution broadly reflects the position set out in the EU’s guidelines published earlier in the day. Antonio Tajani, president of the European parliament, said:

As far as the European Parliament is concerned, the principles governing our future relations are clear: single market integrity must be preserved, a third country cannot be treated more favourably than an EU member state and a level playing field is essential.

Saudi Arabia ministers arrive at Downing Street with Mohammad bin Salman today.
Saudi Arabia ministers arrive at Downing Street with Mohammad bin Salman today. Photograph: A Davidson/SHM/REX/Shutterstock
  • A review of controversial legal aid cuts could be delayed, Justice Secretary David Gauke has told MPs. As the Press Association reports, The review of the Legal Aid, Sentencing and Punishment of Offenders (Laspo) Act was promised by Gauke’s predecessor David Lidington and had been due to conclude by the summer. But Gauke said that timetable was “ambitious” and insisted it was “more important to get this right” than to meet the deadline. Although he did not give an estimate of when the work would now be completed, he told MPs on the Commons justice committee that he did not want it “slipping into next year”. When the review was launched in October 2017, MPs were told the work would be concluded by Parliament’s summer recess at the end of July. Gauke said today:

I think it is more important to get this right rather than to fit a particular time frame. I think it is likely that it will take us longer to do that than the summer timetable.

That’s all from me for today.

Thanks for the comments.

Greg Hands, the international trade minister, was giving evidence to the Commons international trade committee this morning. His evidence got rather overlooked by everything else, but here are a couple of tweets about what he said.

From the FT’s Jim Pickard

From the Institute of Directors’ Allie Renison

Hammond says UK would reject any trade deal not including financial services

Philip Hammond has put Britain on a collision course with Brussels after he warned the government could reject any Brexit trade deal not including financial services.

Speaking at the headquarters of HSBC at Canary Wharf in the heart of the financial district on Wednesday, the chancellor said a trade deal “will only happen” if it balanced the interests of both the UK and the EU.

“It’s hard to see any deal that did not include financial services can look like a fair and balanced deal,” he said.

His speech moves talks with Europe to yet another impasse, after the EU council president Donald Tusk warned earlier on Wednesday the UK would not be allowed to “cherry pick” what it liked in trade talks with Brussels. Tusk suggested a Canada-style free trade deal was the only one on the cards, which would be likely not to include comprehensive coverage of services.

The speech also puts the chancellor in direct opposition to his French counterpart, Bruno Le Maire, who intervened on Tuesday evening to rule out financial services being part of a trade deal.

“We don’t believe that financial services can be part of an FTA,” Le Maire said in a speech in London.

Hammond’s speech will be seen as a rebuke to the EU’s negotiating position, while he also warned that any attempts by European countries to steal financial services business from London would backfire. He said:

Those who think that the major winners for any fragmentation of London’s markets would be Paris or Frankfurt, Dublin or Luxembourg should take note.

The real beneficiaries are more likely to be New York, Singapore, and Hong Kong, cutting Europe’s market share.

And leaving Europe as a whole, less competitive and more reliant on distant financial centres, operating under very different rules.

Verhofstadt says the EU has to be reformed to make it work.

And that’s it. The press conference is over.

Here is the full statement from the parliament on the resolution on a UK-EU trade deal to be debated next week. And here is the text of the resolution (pdf).

Q: You propose cooperation in corporate taxation. The EU does not have cooperation on this, so why are you proposing tougher conditions for the UK on this?

Verhofstadt suggests what the MEPs are proposing is in line with current practice. He suggests the EU does not want to have a country on its borders providing unfair competition on tax.

Verhofstadt's Q&A

Q: Where does the European parliament have a different position to the European commission’s or the European council’s?

Verhofstadt says it is not a matter of having a different position; he says the point is that the parliament’s plan is more precise.

Verhofstadt says MEPs are also pushing for a final deal on citizens’ rights.

And he says the UK Home Office has been invited to Brussels to discuss this.

MEPs propose an “association agreement” between EU and the UK

Guy Verhofstadt is speaking now. He says the parliament’s resolution runs to 65 paragraphs. It will be debated on Tuesday next week, and put to a vote on Wednesday.

He says the parliament’s guidelines are intended to establish a bridge between the UK’s red lines and the EU’s red lines.

He says the parliament is proposing an association agreement. Without that, you could up with a relationship like the EU’s with Switzerland, which is governed by 100-plus agreements. With the UK, the parliament wants the opposite, one overarching agreement, he says.

  • MEPs propose an “association agreement” between the EU and the UK.
Guy Verhofstadt
Guy Verhofstadt Photograph: Europarl

Antonio Tajani is speaking now.

He says MEPs will not allow sector-by-sector participation in the single market.

Theresa May’s red lines leave little room for any alternative, he says.

He says there will have to be a free trade agreement. It could go a bit further than other ones, but the Canadian and Japanese deals will be the mothers of what gets offered to the EU.

This is from AFP’s Danny Kemp.

  • Tajani says UK-EU trade deal could go “deeper” than Canada’s.

He says the European parliament is still waiting for a plan that would avoid a hard border in Ireland.

He says he does not want to discuss the transition period. But MEPs will not accept anything that discriminates against EU nationals arriving in the UK during the transition.

Tajani says he has to leave now because he is going to Spain.

Antonia Tajani
Antonia Tajani Photograph: Europarl

Updated

European parliament president's press conference on Brexit

Antonio Tajani, the president of the European parliament, and Guy Verhofstadt, the parliament’s lead Brexit spokesman, are about to hold a press conference on Brexit. They will present the resolution that will be put to a vote in the parliament next week setting out the parliament’s demands for a UK-EU trade deal.

The European parliament is not negotiating Brexit and, although it will have to approve the final deal, in practice it is expected to rubber-stamp what the European commission and the European council have agreed.

But that doesn’t make it powerless. In Legislation at Westminster, an important new academic study looking at exactly what influence parliamentarians and other players exercise when legislation is getting passed, Meg Russell and Daniel Gover write at length about the power of “anticipated reactions” - in other words, how the executive is constrained in what it tries to get through parliament by what it knows MPs and peers will and will not expect. The same principle applies in Brussels, where the parliament’s “anticipated reaction” power is significant.

There is a live feed here.

Updated

Here is Theresa May with the Crown Prince of Saudi Arabia, Mohammad bin Salman, outside Number 10.

Theresa May greets the Crown Prince of Saudi Arabia Mohammad bin Salman outside 10 Downing Street.
Theresa May greets the Crown Prince of Saudi Arabia Mohammad bin Salman outside 10 Downing Street. Photograph: Simon Dawson/Reuters

And here are protesters in Whitehall demonstrating against his visit.

Protest against Saudi Arabian Crown Prince Mohammed bin Salman’s visit to London.
Protest against Saudi Arabian Crown Prince Mohammed bin Salman’s visit to London. Photograph: Alexandre Rotenberg/REX/Shutterstock

The EU regularly accuses the UK of wanting to cherry pick, but there is an element of cherry picking in the guidelines published earlier. While proposing a relatively standard free trade agreement, it is also demanding strong guarantees to ensure a level playing field. (See 11.55am for the relevant quotes.)

These tweets from the Sun’s Nick Gutteridge help to shed some light on this.

Ukip says May should reject EU fisheries demand

Ukip’s fishing spokesman, the MEP Mike Hookem, has also condemned the EU fishing proposal. (See 4pm.) In a statement he said:

How will leaving the CFP [common fisheries policy] make any positive difference for the British fishing industry if all the rules are still set by Brussels, along with the UK’s share of what can be caught in our own waters.

It’s a disgraceful situation and nothing more than a grab to secure EU dominance of UK fishing for many years to come.

The European council’s latest demand acts as confirmation that unless Theresa ‘the Appeaser’ can show some steel, and stand up to the EU bullyboys, then we don’t have any hope of reclaiming our seas and keeping what remains of our ravaged fishing industry.

However, I’m in no doubt that Mrs May will roll-over and allow the EU to continue its dominance of the UK’s fishing industry even after we leave the bloc.

Given these ridiculous demands, my message to Theresa May is to show some British spirit and tell the EU where to go.

Mike Hookem
Mike Hookem Photograph: Darren Staples/Reuters

Scottish fishermen angered by EU demand to continued accesses to British fisheries

Scottish fishermen have rejected the EU’s demands for the UK to accept “existing reciprocal access to fishing waters and resources” after Brexit, insisting that was applying the common fisheries policy by the backdoor.

Bertie Armstrong, chief executive of the Scottish Fishermen’s Federation, implied that the proposal would also betray trawlermen who voted leave to cut EU quotas in British waters. He said:

There cannot be ‘fairer shares’ for our fishing communities if we maintain existing reciprocal access.

This latest gambit must be rejected. When we leave the EU we leave the common fisheries policy and assume our rightful place at the table as a coastal state. Each year we will then decide who catches what, where and when. The days of the EU taking 60% of our fish are coming to an end.

Armstrong’s stance was backed by David Duguid, the Scottish Tory MP for Banff and Buchan, a fishing heartland in north east Scotland won by the Tories last year in their rout of the pro-EU Scottish National party in the region. He said:

The UK government must strongly defend our fishermen and coastal communities across the country who voted to take back control of our waters. I will continue to make the case, as I did in the chamber today, for a fair share for our fishermen. [We] must be in control of who comes into our waters, and how much they fish.

Even so, fisheries leaders accept privately the EU will bargain hard over access to British waters, which are the largest and richest in the EU currently. The industry expects compromises but is planning to fight vigorously against significant concessions.

The key reference to fishing in the draft EU guidelines published today (pdf) is in paragraph 7 i), which says “existing reciprocal access to fishing waters and resources should be maintained.”

Fshermen at work off the east coast of Scotland
Fshermen at work off the east coast of Scotland Photograph: David Cheskin/PA

Here is some UK reaction to the EU draft guidelines for the trade talks published by Donald Tusk earlier.

From Labour MP Chuka Umunna on behalf of Open Britain, which is campaigning for a soft Brexit.

The council’s guidelines are clear that it is not too late for the government to change course, but with just a year to go in the negotiations, time is running out. Given the emerging reality about the enormous costs and sheer complexity of Brexit, everyone is entitled to keep an open mind about whether it really is the right path for the country.

From Green party co-leader Caroline Lucas on behalf of Best for Britain, which is opposed to Brexit and campaigning for a second referendum

Donald Tusk is right - the prime minister is desperate to show that Brexit can be a success, despite all of the evidence suggesting it can’t be.

From the Lib Dem Brexit spokesman Tom Brake

The prime minister needs to drop the illusion that we can keep the benefits of the EU without being a member.

From the interim Ukip leader Gerard Batten

The EU wants to have its cake and to eat it. Their published guidelines today should be unacceptable to the British Government and to the 17.4m people who voted Leave.

It is clearly not in the national interest to accept a free trade deal which does not involve financial services.

It is incredible beyond belief that the EU has the gall to ask for free access to British fishing waters once we have left the EU. They want our money and our fisheries - this is completely unacceptable.

Hammond claims EU would not get what it wants from basic free trade deal it is proposing

Here are two of the lines from Philip Hammond’s Q&A.

  • Hammond, the chancellor, claimed a basic free trade agreement of the kind proposed by the EU would not deliver what both sides wanted.

The aspiration that the EU itself is setting out for our future relationship, it couldn’t be contained within a straightforward FTA [free trade agreement]. The EU itself has noted that because of the proximity of the UK and the European Union, because of complexity and scale of existing trade flows, in many respects a simple free trade agreement would leave many questions unresolved that would have to be resolved.

Because the relationship between the UK and European Union countries will never be the same as the relationship between Canada and European Union countries, because of the different nature of the trade. A very large proportion of our trade with the EU is ro-ro [roll-on, roll-off] trade across the Channel, whereas almost all of the trade between Canada and the EU will be containerised, sea freight or air freight. It’s a different type of trade.

  • He downplayed the significance of the tough stance adopted by the EU today, saying that was just what you would expect from any “very skilled negotiator”. He said:

The EU is a very skilled negotiator. They’ve done this many times [before] - not precisely this, but they’ve negotiated agreements with many countries. They are very skilled, very disciplined in the way they carry out their negotiation. And it does not surprise me remotely that what they’ve set out this morning is a very tough position. That’s what any competent, skilled, experienced negotiator would do.

I expect that we will have a deep and constructive engagement with them and I hope that what I’ve set out here this afternoon will contribute to the discussion that we will be having.

Philip Hammond delivering his speech at HSBC HQ in London.
Philip Hammond delivering his speech at HSBC HQ in London. Photograph: ANDY RAIN / POOL/EPA

BBC News and Sky gave up on the Q&A after the first three questions (and I don’t have a live feed), but Twitter still serves up copy. These are from the Sun’s Harry Cole.

Q: The EU’s guidelines rule out the kind of mutual recognition regime that the prime minister proposed and that you are proposing for financial services. So why don’t you just accept that?

Hammond says a straightforward free trade agreement would not achieve what the EU and the UK want.

He says the UK’s trade with the EU is different from Canada’s.

The UK and the EU are trying to do something that has not been tried before.

Using an off-the-shelf agreement designed for a country like Canada is not credible, he says.

Q: What can you say to City firms thinking of moving out of London?

Hammond says the implementation period is key. The government expects to get that confirmed at the EU summit later this month.

That will move forward the “cliff edge”, he says.

Hammond's Q&A

Philip Hammond has finished his speech. He is now taking questions.

Q: Don’t Tusk’s comments this morning show the huge gulf between the UK and the EU? And he also said May wanted to show that Brexit would be a success at any price, which was not the EU’s intention.

Hammond says the EU is a very skilled negotiator.

It does not surprise me remotely that what they have set out this morning is a very tough position.

That is what any skilled negotiator would do, he says.

  • Hammond says EU’s tough stance not surprising because they are skilled negotiators.

Pressure on Mark McDonald, the former Scottish government cabinet minister who resigned from the SNP yesterday after three women accused him of unwanted and inappropriate behaviour, to quit Holyrood is growing this afternoon.

The SNP’s Kirsty Blackman, whose Westminster seat overlaps with his Holyrood constituency, has said that she believes constituents want the opportunity to vote again on having McDonald, who has insisted that he will continue to serve as an independent MSP, as their representative.

Blackman, a well-respected and increasingly influential figure in the SNP’s Westminster group, told the BBC:

The people I have spoken to said they want the chance to vote again. They want the chance to decide whether or not they want an SNP MSP representing them or they want an independent MSP representing them.

Yesterday SNP leader and First Minister Nicola Sturgeon also urged McDonald to quit, saying: “If his behaviour is such that he himself considers he cannot continue as an SNP MSP, then it would be appropriate to give his constituents the opportunity to elect a new MSP.”

Philip Hammond, the chancellor, is delivering his Brexit speech now.

Here is our preview story.

As my colleague Richard Partington reports, Hammond implied that the UK would reject a trade deal that does not include financial services.

UPDATE: Here is the full Hammond quote.

A trade deal will only happen if it is fair and balances the interests of both sides. Given the shape of the British economy and our trade balance with the EU27, it is hard to see how any deal which didn’t include services could look like a fair and balanced settlement.

I’m clear not only that it is possible to include financial services in a trade deal, but it is very much in our mutual interests to do so.

Updated

Gordon Brown calls for police investigation into new 'blagging' revelations

Gordon Brown, the former prime minister, has said he is calling for a police investigation into alleged “blagging” at the Sunday Times. In a statement issued in response to the revelations from John Ford, who told Byline Investigations how he was paid by the Sunday Times to obtain personal information unlawfully, Brown said:

According to the new evidence from John Ford - which corresponds with other information I have - there were at least 25, and up to 40, violations of the criminal law by the Murdoch group including impersonation, reverse engineering my phone and blagging, for no reason other than to discredit someone they wanted to undermine for their own reasons.

This new evidence shows that even when under oath, what was then News International misled the Leveson Inquiry.

I am now calling for police to investigate this criminal wrongdoing.

My colleagues Dan Sabbagh and Ewen MacAskill have published a long interview with Ford which is well worth reading. Here it is.

As Dan and Ewen report, the Sunday Times denies wrongdoing. It said in a statement: “The paper strongly rejects the accusation that it has in the past retained or commissioned any individual to act illegally.”

Under current law obtaining private information by subterfuge is illegal, but there is an exemption for public interest journalism.

Gordon Brown.
Gordon Brown. Photograph: Pako Mera / Barcroft Images

Here is some comment on the EU guidelines and the Tusk press conference from journalists and commentators. (Where there’s a thread, I have just posed the first tweet, but if you click on it, the full thread should appear.)

From Charles Grant, director of the Centre for European Reform

From ITV’s Robert Peston

From Steve Peers, an EU law professor (thread)

From Sam Lowe, a trade expert at the Centre for European Reform (thread)

From the Telegraph’s Peter Foster

Updated

Tusk's press conference - Summary

Here are the main points from Donald Tusk’s press conference.

His words are clear but, on their own, they do not do full justice to the message he conveyed. His tone was very striking; it was lugubrious, almost funereal. Remember Theresa May’s “Brexit means Brexit, and we’re going to make a success of it”? Tusk’s take could not have been more different.

Here are the main points.

  • Tusk made it clear that the EU was just offering a Canada-style deal. He said that May had made it clear that the UK was opposed to staying in the single market and the customs union and to remaining under the jurisdiction of the European court of justice. He went on:

Therefore it should come as no surprise that the only remaining possible model is a free trade agreement. I hope that it will be ambitious and advanced and that we will do our best, as we did with other partners, such as Canada recently. But, anyway, it will only be a trade agreement.

He said that the deal should involve zero-tariffs on goods, and that it should address services. He also said the EU would want access to fishing waters and resources to be maintained.

  • He restated the EU’s determination not to allow the UK to cherry pick. The deal would have to pass two tests, he said. The first was about maintaining a balance of rights and obligations.

For example, the EU cannot agree to grant the UK the rights of Norway with the obligations of Canada.

And the second test was about protecting the integrity of the single market, he said.

No member state is free to pick only those sectors of the single market it likes, nor to accept the role of the ECJ only when it suits their interests.

By the same token, a pick-and-mix approach for a non-member state is out of the question.

We are not going to sacrifice these principles. It is simply not in our interests.

  • He implied May was being unrealistic about what she could achieve from Brexit. In the Q&A he insisted that the EU would not allow full single market access on a sector-by-sector basis, as May has broadly proposed. He said:

One thing must be absolutely clear, and I’m not sure that we are on the same position here; there is no possibility to have some sort of exclusive single market for some part of our economies. And I hope that during our negotiations and debate among 27 EU leaders that we will make this position more clear for our partners in London.

He also said he understood why, from a political point of view, May’s objective was to show that Brexit could be a success and that it was the right choice for the UK . He went on: “But, sorry, it is not our objective.”

  • He said UK-EU trade would become “more complicated” after Brexit. He said:

This positive approach doesn’t change the simple fact that because of Brexit we will be drifting apart. In fact, this will be the first FTA [free trade agreement] in history that loosens economic ties instead of strengthening them.

Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated ... for all us. This is the essence of Brexit.

  • He said it was important to be realistic about what could be achieved. He said:

To sum up, we will enter the negotiations of the future relations with the UK with an open, positive and constructive mind, but also with realism.

  • He insisted that the EU and the UK could remain “friends” after Brexit. He said:

My proposal shows that we don’t want to build a wall between the EU and Britain. On the contrary, the UK will be our closest neighbour and we want to remain friends and partners also after Brexit, partners that are as close as possible, just like we have said from the very first day after the referendum.

  • He said that reaching an agreement to allow British airlines to continue flying in Europe next year should be a priority. He said:

I am determined to avoid that particularly absurd consequence of Brexit, that is the disruption of flights between the UK and the EU. To do so, we must start discussions on this issue as soon as possible.

Donald Tusk speaking at his press conference.
Donald Tusk speaking at his press conference. Photograph: Emmanuel Dunand/AFP/Getty Images

Updated

Now PMQs is over too.

I will post a summary of the main lines from the Tusk press conference in a moment.

In the meantime, here is my colleague Daniel Boffey’s story about the draft EU guidelines for the trade talks.

And this is how it starts.

The EU is offering a free-trade deal that will be economically damaging to the UK and has ruled out a series of demands made by Theresa May, a document on the bloc’s vision of the future relationship reveals.

The prime minister’s red lines limit what Brussels can offer the UK, the paper says, and in return for even a limited free-trade agreement the British government will have to sign up to a commitment not to become a low-tax, low-regulation state undercutting the EU model.

The guidelines further warn that Brussels will not push on with negotiations on trade until May signs up to a legal text that translates all the commitments made by the UK government in the first phase of negotiations, including on avoiding a hard border on the island of Ireland.

May has refused to accept the EU’s draft withdrawal agreement as it suggests Northern Ireland may need to effectively stay in the customs union and single market.

The EU’s opening position on the trade talks says: “Negotiations can only progress as long as all commitments undertaken so far are respected in full, and calls for intensified efforts on the remaining withdrawal issues. The European council reiterates that nothing is agreed until everything is agreed.”

This is from my colleague Jennifer Rankin.

The press conference is now over. But in the Commons, PMQs is still going on.

Asked about Saudi Arabia again, May says the UK has had a long-standing and historic relationship with the country. The UK will help the Crown Prince deliver on his vision for 2030.

Whoever runs Donald Tusk’s Twitter account has just posted these.

Tusk says, with regard to what Trump said on trade, he is sure the UK and the EU are still “one team”.

Bettel says it is still not clear what the UK wants.

And it is wrong to give the impression that the UK will be a big winner. There won’t be a winner, he says.

He says there are rules. No cherry picking is a reality, he says.

Tusk rules out UK have single market access for certain parts of economy

Tusk is now responding to questions.

Tusk says he went to London to consult with May, to hear her arguments before he finalised his guidlines.

One thing must be absolutely clear ... There is no possibility to have some exclusive form of single market for some parts of our economies.

  • Tusk rules out UK have single market access for certain parts of the economy.

Updated

Tusk finishes by talking about President Trump’s plans for a trade war.

Trump says a trade war is good and easy to win. But trade wars are bad and easy to lose, Tusk says.

He says EU leaders will have a special debate on this.

Tusk says offering UK a “pick-and-mix” approach is “out of the question”

Turning to trade, Tusk says May confirmed last week that the UK will leave the single market, the customs union and the remit of the ECJ.

That leave a trade agreement as the only option, he says.

He says he hopes it will be advanced, like the Canada one.

He says it should address services as well as goods. And it should cover fishing.

But this does not change the fact that “we will be drifting apart”.

He says it will be the first trade agrement in history that will “loosen ties”.

It will not make trade frictionless, he says.

He says he will go into it with an open mind. But he has to be realistic, he says.

He says two tests will apply. The EU will not offer the UK the benefits of Norway with the rights of Canada, he says.

A pick-and-mix approach for a non-member state is out of the question.

  • Tusk says offering UK a “pick-and-mix” approach is “out of the question”.

Updated

Tusk says, secondly, the UK will be invited to participate in EU programmes in education and culture.

Thirdly, he is determined to avoid the disruption of flights between the UK and the EU. To do that, they must start talks as soon as possible.

Donald Tusk is speaking now.

He says he is happy to be back in Luxembourg. He is discussing the agenda for the March European council.

Two hours ago he sent out his guidelines. He hopes they will be adopted at the march European council.

He says the EU does not want to build a wall. It wants to remain partners with the UK, as close as possible.

He proposes cooperation in the following areas.

First, they should cooperate on security, defence and foreign affairs. This is about the security of our citizens, he says.

Bettel says financial services are a key issue for Luxembourg.

He says he wants to end his statement expressing solidarity with Ireland.

He says he deeply regrets what the UK is doing. And he praises Tusk for maintaining EU unity. He says they are going, not for a hard or soft Brexit, but for an intelligent Brexit.

The UK were in, and wanted a lot of opt-outs. Now they are out, but they want a lot of opt-ins, he says.

Donald Tusk's press conference

Donald Tusk, the president of the European council, is starting his press conference now, alongside the PM of Luxembourg, Xavier Bettel.

You can watch it here.

Bettel starts. He says Brexit will be a “damage limitation exercise”.

He says the EU is also concerned to ensure a level playing field. He goes on:

Unfortunately, there will be no winners after Brexit. Both sides will be losing.

PMQs - Snap verdict

PMQs - Snap verdict: A patchy PMQs, with creditable performances by both Corbyn and May, but no stand-out winner.

Corbyn says he is glad the government showed so much urgency it took four months for the task force to meet. Many people in this country are embarrassed by the level of homelessness. He reads a letter out from a volunteer who says this is a disgrace. Have cuts of 45% in homelessness services had an impact?

May says, if Corbyn thinks the only way to solve a problem is by having a meeting, he is wrong. The key thing is to get out there and do something about it. Also, you have to deal with the underlying issue, she says. The government is trying to put entrenched rough sleepers into accommodation. This is not about figures, it is about people, she says. And it is about building enough homes. That is why her housing plans should be welcomed.

Corbyn says what May said would not be of consolation to the rough sleepers he mets. He says the LGA says councils are struggling to quote. We are the fifth richest country in the world. Homelessnes is a source of shame. Just how will the prime minister tackle this crisis?

May says she wants to deal with it by building more homes, and by ensuring tenants get a better deal. There are more council homes being built under this government than under Labour. So, if Corbyn wants to look at this, he should look at the record of the last Labour government. She says someone said the last Labour’s government record on housing was one of despair. Who said that? It was Corbyn. He was right to say Labour’s record on this was no good.

Corbyn quotes the Tory former international development secretary Andrew Mitchell saying the government should not be afraid to condemn the Saudis.

Why did rough sleeping fall under Labour but has doubled under the Tories?

May says the Saudis are learning from mistakes made in Yemen.

She says Corbyn is at odds with Emily Thornberry, who says she backed legitimate armed sales on Radio 4 this morning.

On rough sleeping, she says no one wants to see that. The government is piloting an initiative on this. It wants to prevent people sleeping rough.

Corbyn says Philip Hammond announced a task force in the budget. The task force has not yet met, and no money has been spent. Isn’t it a little unambitious to tackle it by 2027.

May says she wants to eliminate it by 2027. The task force has met, she says. It met today. But this is not the only group looking at rough sleeping, she says. She says statutory homelessness (which is not the same as rough sleeping) is less than half its peak in 2003. This is a complex problem. It is about changing lives, he says.

Jeremy Corbyn thanks May for what she said about Salisbury. We await updates, he says.

He says tomorrow is international women’s day. It is a time to reflect on how far we have come, and how far we have to go. Later May will meet Crown Prince Mohammad bin Salman of Saudia Arabia. There has been a sharp increase in people being jailed. Will May urge him to halt the shocking abuse of human rights in Saudia Arabia.

May thanks Corbyn for reminding him about IWD. That is what is called “mansplaining”, she says.

She says the link with Saudia Arabia is historic and important and has saved the lives of literally hundreds of people in this country. She says Emily Thornberry herself said this morning the link with Saudi Arabia was important. She will raise human rights, she says.

Corbyn says the government is still suppressing a report about the Saudis funding extremism in this country. When will that come out? And there is a disaster in Yemen. Some 600,000 children have cholera because of the Saudi blockade. British arms sales have increased. It cannot be right that the government is colluding in what are war crimes. Will May demand an immediate ceasefire in Yemen?

May says the government is committed to stamping out extremism in all its form. The review gave a best picture of how extremist activities are funded. They get most of their support from domestic, not overseas sources. Privy counsellors have been allowed to read the report, although some parts were not published.

On Yemen, May says we are all concerned about this, particularly the effect on women and children. The government has increased the amount is spend on Yemen. In December she raised the need to open a port to allow supplies. The Saudis did just that. It shows what engagement can achieve. And the Saudis intervened at the request of the legitimate government, she says.

Updated

Simon Hoare, a Conservative, asks about housing.

May says she announced earlier this week that planning laws are being reviewed “to restore the dream of home ownership”.

Theresa May starts by updating MPs on the government’s response to the Salisbury incident.

The police investigation is ongoing, she says. She says yesterday she chaired a meeting of the national security council, where they were updated by police. This morning Amber Rudd chaired a Cobra meeting.

This is from my colleague Jennifer Rankin.

PMQs

PMQs is about to start.

I will be covering the opening and the May/Corbyn exchanges, but will switch to Donald Tusk when he starts speaking.

Amber Rudd, the home secretary, has been speaking after today’s Cobra meeting about the Salisbury suspected poisoning. She said the police now know more about the substance that seems to have poisoned the former Russian spy Sergei Skripal. More information will be published this afternoon, she said.

Key extracts from leaked draft of EU guidelines on future trade relationship

Here are key extracts from the leaked draft of the EU guidelines on a future trade relationship. (See 11.40am.)

Overall objectives

The European Council restates the Union’s determination to have as close as possible a partnership with the UK in the future. Such a partnership should cover trade and economic cooperation as well as other areas, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy

At the same time, the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the customs union and the single market will inevitably lead to frictions. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU single market as well as of the UK market. This unfortunately will have negative economic consequences.

The proposed free trade deal

As regards the core of the economic relationship, the European Council confirms its readiness to initiate work towards a free trade agreement (FTA), to be finalised and concluded once the UK is no longer a member state. Such an agreement cannot offer the same benefits as membership and cannot amount to participation in the single market or parts thereof. This agreement would address:

1) trade in goods, with the aim of covering all sectors, which should be subject to zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In this context, existing reciprocal access to fishing waters and resources should be maintained.

ii) appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union.

iii) disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary standards (SPS) as well as a framework for voluntary regulatory cooperation.

iv) trade in services, with the aim of allowing market access to provide services under host state rules, including as regards right of establishment for providers, to an extent consistent with the fact that the UK will become a third country and the union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework. The FTA should include ambitious provisions on movement of natural persons as well as a framework for the recognition of professional qualifications

v) other areas of interest to the Union, for example access to public procurement markets, investments and protection of intellectual property rights, including geographical indications.

Level playing field conditions

Given the UK’s geographic proximity and economic interdependence with the EU27, the future relationship will only deliver in a mutually satisfactory way if it includes robust guarantees which ensure a level playing field. The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of current levels of protection with respect to competition and state aid, tax, social, environment and regulatory measures and practices. This will require a combination of substantive rules aligned with EU and international standards, adequate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement mechanisms in the agreement as well as Union autonomous remedies, that are all commensurate with the depth and breadth of the EU-UK economic connectedness.

And here is the Politico Europe story about the leaked draft of the EU document setting out its Brexit guidelines for the trade talks. This is how it starts.

There’s only one dish on the EU’s post-Brexit, future relationship menu: a free trade agreement with zero tariffs, covering all goods — and perhaps services “to an extent.”

And here is a link to the six-page draft (pdf), published by Politico.

More on the EU’s draft guidelines for the Brexit trade deal.

This is from Politico Europe’s David Herzenhorn.

And these are from MLEx’s Matthew Holehouse.

UK.gmbh is a reference to a German form of corporate ownership.

David Davis, the Brexit secretary, is in Malta today. In an article for the Times of Malta, he says the UK wants a free trade deal with zero tariffs on services. He writes:

Both the UK and Malta have services at the heart of our economies – so a bespoke free trade deal that includes zero tariffs on services is in our mutual interest. Total bilateral trade between Malta and the UK in 2016 was valued at more than €2bn.

In a statement issued by Open Britain, which is campaigning for a soft Brexit, the Labour MP Stephen Doughty said this suggests Davis has a weak grasp of the issues at stake. Doughty said:

[Davis] says he wants a trade deal that imposes zero tariffs on services. But there are no tariffs on services. You don’t pay a tariff on legal advice at frontiers or have to get a stamp from a customs official on an email.

The issue with services is about non-tariff barriers and if David Davis doesn’t get that he’s in the wrong job.

Back to Labour for a moment, and Jon Lansman, the Momentum founder and candidate for Labour’s general secretary, has distanced himself from the anti-union comments from his ally Christine Shawcroft. (See 11.03am.)

EU Brexit guidelines propose Canada-style deal, with 'limited access' for banks, leak suggests

According to Bloomberg, the EU guidelines for the future UK-EU trade relationship propose a Canada-style trade deal, with “limited access to the EU’s single market for British financial firms”.

And this is from Bloomberg’s Nikos Chrysoloras.

Updated

Turning away from Brexit for a moment, a mighty row is brewing in the Labour party. As PoliticsHome reveals, Christine Shawcroft, the leftwinger and Momentum director who sits on Labour’s national executive committee and who in January was elected chair of the disputes panel, has suggested the party should break its links with the unions.

On a Facebook post seen by PoliticsHome she said:

Unfortunately, reviewing the disciplinary process is going to come too late for some of our comrades. This is why I am supporting Jon Lansman, or a woman in that tradition, for general secretary.

Nothing would induce me to support a candidate from a major trade union, they stick it to the rank and file members time after time after time. It’s also time to support disaffiliation of the unions from the Labour party. The party belongs to us, the members.

She also wrote:

I was supporting Jon Lansman for general secretary before today’s NEC sub committee meetings, but after today I’m even more determined.

Only someone from his tradition will support the rights of rank and file members in the CLPs (constituency Labour parties). The major trade unions are actively opposed to us, a very cursory examination of trigger ballots in mayoral “selections” will tell you that. Look at their track records before you rush to support someone.

Len McCluskey, the Unite general secretary, has already condemned Shawcroft’s comments on Twitter.

Greg Hands, the international trade minister, is currently giving evidence to the Commons international trade committee.

Earlier he issued this statement responding to the committee’s report accusing the government of complacency over trade deals during the transition. (See 9.23am.) Hands said:

The report recognises the priority that the government has given to ensuring continuity of our trade arrangements as we leave the EU, including in providing certainty to businesses, consumers and investors. We have always been clear that this work would take into account the terms and timing of any implementation period currently being negotiated with the EU.

This is a technical exercise, not an opportunity to renegotiate terms. We have already held discussions with more than 70 countries, unlike the committee, and none have displayed any interest in disrupting trade flows, or in erecting barriers to trade that do not currently exist.

European parliament to demand 'binding convergence mechanism' if UK wants comprehensive trade deal, leak suggests

Politico Europe has got hold of a copy of the draft resolution on the future UK-EU trade deal drawn up by the European parliament. It is due to be formally published today, and MEPs will debate it (and almost certainly pass it, by a large majority) next week.

As Maïa de La Baume reports, many of the clauses “read as a direct rebuttal of the vision of Brexit that UK prime minister Theresa May set out in her Mansion House speech last week.” In her story De La Baume says:

A “deep and comprehensive” trade deal of the kind the UK says it wants with the EU would require Britain to accept a “binding convergence mechanism” with EU laws, according to a draft resolution from the European Parliament obtained by Politico ....

The European parliament text states that:

— “A third country [cannot] have the same benefits as a member state of the European Union, or an EFTA/EEA member.”

— A “deep and comprehensive” trade deal must entail “a binding interpretation role” for the European court of justice and “does not allow cherry-picking of sectors of the internal market.”

— One priority is that a “level playing field is ensured and EU standards are safeguarded and a race to the bottom avoided,” and that maintaining a level playing field means abiding by the EU’s competition and state aid rules.

— “Limitations in the cross-border provisions of financial services are a customary feature of [free trade agreements].”

— “Taxation matters should be integrated in any further agreement between UK and the EU to ensure a maximum level of cooperation between the EU and the UK and its dependent territories in the field of corporate taxation.”

You can read the full 13-page draft here (pdf).

A life-size statue of a child left today outside the Houses of Parliament as part of a demonstration by the charity Save The Children against the visit to the UK by Saudi Arabia’s Crown Prince Mohammed bin Salman.
A life-size statue of a child left today outside the Houses of Parliament as part of a demonstration by the charity Save The Children against the visit to the UK by Saudi Arabia’s Crown Prince Mohammed bin Salman. Photograph: Daniel Leal-Olivas/AFP/Getty Images

Ruth Davidson, the Scottish Conservative leader, has claimed that the Scottish government “actively wants a row” with Westminster over where devolved powers should be held post-Brexit. In an article for the Scotsman, she accused the SNP of “constitutional gamesmanship” and claimed their decision to push emergency legislation on EU withdrawal through Holyrood was a “massive political power play from this SNP government”. She said:

The only conclusion I can reach from the last week is that the SNP now actively wants a row.

As things stand, the Scottish government has no influence over these EU powers and never has, because they are held in Brussels. The SNP has never previously complained about this and Nicola Sturgeon’s position, apparently, is that they should stay there.

But because the UK government now proposes to be able to keep consistency for a temporary period before a joint UK-wide framework is agreed, all hell kicks off ...

It’s the SNP, not Westminster, who are failing to respect the devolution settlement in fast-tracking unconstitutional legislation through Holyrood with minimum scrutiny.

Ruth Davidson.
Ruth Davidson. Photograph: ITV Border

Look out for a range of MPs from all parties wearing 50:50 Parliament pins during today’s PMQs in honour of international women’s day, which falls tomorrow.

50:50 Parliament campaigns for equal representation of men and women in parliament - which is the current pace of progress continues will take more than 50 years.

There are now 208 women in the Commons, up from 191 in 2015. Overall 32% of MPs are women but it’s not an even spread - 45% of Labour MPs are women, but only 21% of Conservatives.

Why does it matter? There is pretty strong evidence that political representation results in better policies for women.

Which is why 50:50 parliament will be pushing its #AskHerToStand campaign this week - they note that women are 50% less likely to stand for political office and need to be asked 3 times.

“50:50 want women to have equal seats and equal say,” says Frances Scott, director of 50:50 Parliament. “If you know a woman who would make a good MP sign her up via 50:50’s #AskHerToStand and 50:50 will help her along the path to parliament.”

Female MPs and peers in central lobby at the Houses of Parliament last month posing for a photograph to mark the centenary of the Representation of the People Act, 1918.
Female MPs and peers in central lobby at the Houses of Parliament last month posing for a photograph to mark the centenary of the Representation of the People Act, 1918. Photograph: Handout/UK Parliament via Getty Images

MPs warn trade with 70 countries could 'fall off cliff edge' if Brexit transition plans not clarified soon

Last week Theresa May ended months of waiting when she gave a speech giving details of what Britain wants after Brexit from a UK-EU trade deal. Today we will get what will arguably be an even more important statement when the EU (the more powerful of the two players in the negotiation) sets out its preliminary demands. Donald Tusk, the president of the European council, is due to start a press conference halfway through PMQs.

For good measure, the European parliament president, is also holding a briefing later setting out some of the parliament’s demands.

British ministers seem reasonably confident that, whatever happens in the long term, at least a transition period, lasting around two years and during which nothing much will change, is close to being agreed. But overnight the Commons international trade committee has published a strong report warning against complacency.

Currently, as an EU member, the UK benefits from around 40 EU trade deals facilitating trade with around 70 countries. Liam Fox’s Department for International Trade has said that rolling these over, so that they continue to apply to the UK during the transition, should be relatively easy. But the committee isn’t convinced. Here is how it summarises its report.

Trade with 70 nations risks falling off a cliff edge if the government does not act quickly to roll over EU trade deals, the international trade committee has found.

A report by the committee calls on the Department for International Trade to produce “a legally watertight and practically viable strategy” to achieve “transitional adoption” of trade agreements the UK is currently party to through its membership of the European Union.

The government still needs to work out a number of important details before continuity can be achieved – and businesses, consumers, investors need certainty on what will happen to the trade deals as a matter of urgency.

Here is a key quote from the conclusions to the report.

There is a disturbing lack of precision and clarity about the legal mechanism whereby the government envisages EU trade agreements with some 70 countries being rolled over. DIT must show, Number 10 and the Cabinet Office must support, and DExEU must allow, that DIT has a legally watertight and practically viable strategy for achieving “transitional adoption” at the point when it will need to take effect, so that UK trade with around 70 countries does not face a “cliff edge”, even if no withdrawal or transition arrangements with the EU should have been agreed or ratified.

And this is from the committee chair, the SNP MP Angus Brendan MacNeil, who is worried about the government being “naive”.

The government is ... correct to have identified maintaining our rights under these agreements as a priority. However, as the committee has found over the course of our inquiry, a number of thorny issues and significant risks remain unaddressed. The government must not be naïve enough to assume that a verbal agreement to maintain the status quo constitutes a watertight guarantee – contingency plans are required.

Here is the agenda for the day.

10am: David Gauke, the justice secretary, gives evidence to the Commons justice committee.

10.30am: Rob Wainwright, executive directive of Europol, gives evidence to the Lords EU home affairs sub committee about Brexit.

10.45am: Amber Rudd, the home secretary, chairs a Cobra meeting to discuss the apparent poisoning of a former Russian spy in Salisbury.

12pm: Theresa May faces Jeremy Corbyn at PMQs.

12.15pm: Donald Tusk, the president of the European council, holds a press conference in Luxembourg as he publishes the EU’s draft guidelines for the Brexit talks on a UK-EU trade deal.

2.15pm: Philip Hammond, the chancellor, gives a speech on Brexit. As Larry Elliott reports, he will insist that Britain can overcome EU opposition and include financial services in a post-Brexit free trade deal.

2.30pm: The Department for Food, Environment and Rural Affairs, and then the Deparment for International Trade, give evidence to the Commons public accounts committee about Brexit.

4.30pm: Guy Verhofstadt, the European parliament’s lead Brexit spokesman, and Antonio Tajani, president of the European parliament, hold a press conference to lay out their demands for a future UK-EU trade relationship.

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.

Here is the Politico Europe round-up of this morning’s political news from Jack Blanchard. And here is the PoliticsHome list of today’ top 10 must reads.

If you want to follow me or contact me on Twitter, I’m on @AndrewSparrow.

I try to monitor the comments BTL but normally I find it impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer direct questions, although sometimes I miss them or don’t have time.

If you want to attract my attention quickly, it is probably better to use Twitter.

Updated

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