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The Guardian - UK
The Guardian - UK
Politics
Andrew Sparrow

Cabinet secretary delivers veiled rebuke to Tory Brexiters who question official forecasts - Politics live

Sir Jeremy Heywood, cabinet secretary.
Sir Jeremy Heywood, cabinet secretary. Photograph: Steve Back/REX Shutterstock

Afternoon summary

  • Sir Jeremy Heywood, cabinet secretary and head of the civil service, has used a tweet to deliver a veiled rebuke to Tory Brexiters who have questioned the value of official forecasts. (See 4.10am.)
  • Andrea Leadsom, the leader of the Commons, has vowed to press ahead with plans to introduce “baby leave” for MPs. She was speaking at the end of a debate which saw MPs vote without opposition in favour of a motion saying that MPs should have “baby leave” and that while they were away they should be able to cast their vote in the Commons by proxy. The vote will not by itself change Commons rules, but the procedure committee will now investigate the issue with a view to coming up with new rules that could be formally adopted. The committee has already published a memorandum (pdf), produced by the clerk of the Commons, looking at how a system for proxy voting could operate. Leadsom expressed some reservations about proxy voting, and she suggested that an alternative might be to formalise a system allow MPs absent on “baby leave” to be paired. She said:

One such example [of a way forward] is that all political parties represented in the House could agree a memorandum of understanding, agreeing to the same terms, which would allow their MPs to take parental leave and to formalise pairing arrangements across all parties.

But Leadsom also said that, when the procedure committee did come up with a solution, she would “drive that forward with my total commitment”.

  • The Conservative Jacob Rees-Mogg has sought to defend his suggestion that Treasury civil servants are rigging their Brexit analysis. He raised the allegation in the Commons this morning, suggesting that Charles Grant, director of the Centre for European Research, had said that “officials in the Treasury had deliberately developed a model to show that all options other than staying in the customs union were bad, and that officials intended to use this to influence policy.” Grant has denied saying this, and others who were at the event where the remark was supposed to have been made have backed Grant’s account. In response Rees-Mogg tweeted this this afternoon.

The tweet links to an article on the Guido Fawkes blog which uses a Guardian article to defend Rees-Mogg’s position. The article includes this passage:

Charles Grant, director of the Centre for European Reform, last week revealed the existence of an unpublished Treasury analysis showing that the costs of leaving without a customs union deal far outweigh any benefits from future overseas trade deals.

“The coalition of forces pushing for a softer Brexit is considerable,” Grant said. “The Treasury, long an advocate of retaining close economic ties to the EU, is newly emboldened.

But there is a difference between saying Treasury officials are pushing for a soft Brexit (which is true, in so far as they have a policy position) and saying that they are fixing the economic models to make their case (which is definitely unproven, and highly likely to be false.)

  • European students who travel to Scotland to study can still benefit from free tuition after the UK’s formal Brexit date. As the Press Association reports, the Scottish Government has announced that students from other European Union (EU) countries who start their course in the academic year 2019-20 will not be charged tuition fees. Shirley-Anne Somerville, the higher education minister, said the move sent a “strong message” that EU citizens were “welcome” in Scotland. Britain is scheduled to exit the EU in March 2019, two years after Theresa May sent the article 50 letter. Somerville said that students starting their degree that autumn would still get free access to university.

That’s all from me for today.

Thanks for the comments.

Updated

We’ve now got a third witness saying that Charles Grant’s account of what he said at the Prospect lunch at the Conservative party conference is accurate and, by implication, that the Brexit minister Steve Baker has remembered it wrongly. (See 4.33pm.) These are from the pro-Labour lawyer Jolyon Maugham.

Theresa May’s hopes of restricting the residency rights of EU nationals arriving during the post-Brexit transition have been dashed by European politicians and diplomats.

The prime minister’s call to limit EU free movement laws has been dismissed, with the EU insisting the terms of transition are not open for debate.

“On the EU side, we will not be able to move on this. Free movement is sacrosanct,” said one EU diplomat when asked about long-term residency rights. “If we start to allow exceptions, there will be more and the whole thing blows up.”

On Monday European ministers agreed the EU’s terms for the post-Brexit transition, to be agreed by the EU’s chief negotiator Michel Barnier. The document is described by the commission as “negotiating directives” for Barnier, but insiders see nothing to negotiate on transition.

“In our view it is obvious what is going to happen. All the current regulations will apply to Britain, except representation [in the EU institutions]. Britain will remain a member of the single market and the customs union and the four freedoms will continue to apply,” a second diplomat told the Guardian.

Roberto Gualtieri, a centre-left MEP, who sits on the European parliament’s Brexit steering group, said the EU was united. He said:

Citizens are part of the transition, so that status quo includes citizens and it is extended for this moment. This is now, not just the position of the parliament, this is the position of the whole union and of the directives adopted unanimously by the council. It is a red line. It is there.

He was speaking at a hearing on citizens’ rights at the European parliament and it is unsurprising that MEPs are taking a tough line.

But the UK has no support from EU member states either.

Barnier’s position has been that EU law in its entirety should apply to the UK during the transition. The specifics on citizens were strengthened by Poland, Romania and Hungary during this month’s discussion on transition. Several EU sources said this approach had widespread support.

“I don’t think this is something that is up for grabs,” an EU diplomat said.

He added that it would be an administrative burden to have three different arrangements for protecting citizens’ rights - ie pre-Brexit, transition, new relationship. “As with the economy, this creates an administrative burden that no one wants, it is better just to have one change instead,” he said.

No 10 stands by Steve Baker over his Treasury civil servants comments

As my colleague Anushka Asthana reports, Number 10 says it has no reason to doubt Steve Baker’s account of what he was told about the Treasury by the Centre for European Reform’s Charles Grant. (See 12.25pm.)

Here is the statement from Grant himself saying he had been misquoted. And the two witnesses who have backed up his story are quoted here, at 2.31pm.

Cabinet secretary delivers veiled rebuke to Tory Brexiters who question official forecasts

Sir Jeremy Heywood, the cabinet secretary and head of the civil service, has used Twitter to hit back at the Tories who have been criticising civil servants for being too negative about Brexit. Being a civil servant, obviously he is speaking in code, but in Heywood terms (his tweets are normally among the most boring ever recorded in the history of Twitter) this is very strong stuff. Effectively he is delivering a rebuke to Tory Brexiters.

Heywood’s comment seems to be aimed in particular at Steve Baker, the Brexit minister who told MPs on Tuesday that civil service forecasts were “always wrong”. Baker also floated the possibility this morning that Treasury civil servants are rigging their Brexit assessments, but Heywood posted this tweet around the time Baker was making his comments this morning and so he probably did not know about Baker’s latest civil service broadside when he pressed the button.

But the Heywood comment has a wider application. The cabinet’s main Brexit sub-committee will soon have to make a decision about whether to aim for a Brexit that keeps the UK close to the EU regulatory model or allows it to diverge significantly, and a key issue for ministers is how much they believe internal civil service forecasts, like the one seen by BuzzFeed, saying the economy will suffer the more the UK disengages from Europe. Ministers pushing for a soft Brexit take these warnings seriously, while Brexiters are sceptical.

Heywood is saying that analysts do “great work”, that policy should be based on “evidence” and taking decisions on this basis is better for the public. In other circumstances these statements would not be remarkable, but to Brexiters they will be provocative.

International trade secretary Liam Fox’s suggestion that we now live in a “post-geography trading world” is challenged by a training manual used to teach government officials basic economics.

A module laid on by the Foreign and Commonwealth Office teaches government officials that the traditional view that “big economies which are close together will trade more” still holds firm.

That is the so-called “gravity model” of trading, which says that the two most important factors when it comes to volume of trade are geography - how nearby a country is - and size.

That notion is being increasingly challenged by Brexit-supporting ministers like Fox, with David Davis, the Brexit secretary, arguing internally that reduced shipping costs and more emphasis on the service economy are making gravity less important.

However, whoever drew up the “introduction to economics” module being taught in government clearly disagrees. According to wording seen by the Guardian, it suggests that language and culture do have an influence, but claims that size and distance still dominate when it comes to the volume of trade.

This is, of course, a critical issue because of Brexit. As one trade expert at the Centre for European Reform, Samuel Lowe, points out, the issue Brexit ministers have with the gravity model is that it ultimately suggests the EU is far more important than new trading relationships further afield.

And the issue is clearly being hotly debated within government departments. One memo sent out by a senior civil servant at the Department for International Trade asked colleagues for views on “whether gravity matters/will matter as much future”, saying the issue was now important for “obvious reasons”.

MPs vote in favour of introducing baby leave for MPs

MPs have passed the backbench motion on baby leave. This is what the motion, tabled by Harriet Harman and Maria Miller, says:

That this House believes that it would be to the benefit of the functioning of parliamentary democracy that honourable members who have had a baby or adopted a child should for a period of time be entitled, but not required, to discharge their responsibilities to vote in this House by proxy.

No one opposed the motion and it was passed by acclamation.

Backbench motions are not binding, and often governments ignore them. But Andrea Leadsom, who was winding up for the government as leader of the Commons, said that the government was in favour of the idea. She even included a quote from Theresa May to stress the prime minister’s personal support. However, Leadsom also said she did have some reservations about introducing the concept of proxy voting into the Commons, where MPs always have to vote in person.

The fact that the motion has been passed does not change Commons rules. Instead what will now happen is that the Commons procedure committee will investigate, with a view to coming up with some firm proposals that could be formally adopted by MPs.

Updated

Two witnesses have now come forward to back up Charles Grant’s version of what he said about Treasury civil servants at the event attended by the Brexit minister Steve Baker. (See 12.36pm and 1.31pm.)

These are from Duncan Weldon, head of research at the Resolution Group.

And this is from the Conservative MP Antoinette Sandbach.

Lunchtime summary

  • Steve Baker, a Brexit minister, has been criticised by the union representing top civil servants for floating the possibility that Treasury officials are rigging their Brexit impact analysis assessments. (See 1.16pm.)
  • The Scottish government has said that it will publish in full the Brexit impact report leaked to BuzzFeed this week when it gets it from the UK government. The Brexit department has said it will sent it to devolved administrations as well as to the Commons Brexit committee, following the Commons vote on Wednesday saying it must be shown to the committee and to MPs. In the Commons Robin Walker, the Brexit minister, said he hoped the committee would not publish the document. Hilary Benn, the committee chairman, said in his reply that his committee would handle the material in a “professional way”, as it did when it received confidential Brexit reports before Christmas. (It published most of those documents, but held back some material.) But, in an open letter to David Davis, the Brexit secretary, Michael Russell, the Scottish Brexit minister, said his government would publish the whole thing. He said:

As you are aware the Scottish Government considers that the public have a right to know the impact on jobs and living standards of the UK Government’s decision to pursue the UK’s exit from the EU and therefore that this analysis should be made publicly available. Further, this is not our analysis and we do not see it as our responsibility to make arrangements on confidential handling. I want to be clear that if you send the analysis to us we will make it public.

  • George Osborne, the former chancellor, has said Tory MPs have the power to insist on a soft Brexit if they want. (See 9.12pm.)
  • Harriet Harman, the former deputy Labour leader, has led calls for MPs to be able to nominate someone to vote in the Commons for them when they take maternity leave. Opening a Commons debate on a motion proposing this, she said:

In this House we set the rules for parents outside the House having babies or adopting a child and we do that because we think that it’s important for the child and it’s important for the parents and we do it because we don’t want new parents to have to ask for favours but to be clear where they stand, but there is no such system for members of this House.

The proposal would cover MPs taking any form of “baby leave”, including those who adopt. They would be able to nominate a proxy to vote on their behalf. The debate is still going on, but the motion is expected to be passed within the next hour. Defending the plan, Harman said:

I am sure many women in this House who take time off to be with their baby in the first few weeks want to practise that act of democracy in representing their constituents whilst being a new mother and not denied that by the presentation that they just haven’t voted.

Why should that constituency lose the right for the vote in their name to be cast because their MP is having a baby? When you are in a birthing pool you cannot be voting, but your constituency has a right to be heard.

Updated

Davidson accuses Sturgeon of turning Scotland into 'high tax economy'

Taxation was the lead topic at this lunchtime’s first minister’s questions, with Nicola Sturgeon attacked from both left and right following the agreement of her government’s budget yesterday.

Scottish Conservatives leader Ruth Davidson took her to task for turning Scotland into a “high tax economy” and making the country a less attractive place to invest and work in. Sturgeon responded that “what [she] is really worried about is that we are progressively asking those that earn the most to pay a little bit more to help protect public services.”

Unfortunately for Scottish Labour leader Richard Leonard, his question was also on tax, but from the opposite direction, and so his demand to know why Sturgeon was “refusing to ask the richest people in Scotland to pay their fair share” fell rather flat since the first minister had minutes ago argued just that.

Sturgeon also took the opportunity to needle Davidson about polling in the Daily Record this morning which put the SNP up two points from last year’s general election to 39%, while the Scottish Tories have dropped almost 5 points to 24%, with Scottish Labour staying solid at 27%.

On a less knock-about note, Labour MSP Anas Sarwar told the chamber that he had been inundated with stories of everyday racism after he spoke out earlier in the week about racist abuse he had experienced during last autumn’s leadership campaign.

Sturgeon committed to working with the cross-party group on tackling Islamophobia, which Sarwar launched on Tuesday, adding that “Scotland should never presume itself immune from racism”.

Nicola Sturgeon making her way to the chamber in the Scottish parliament before first minister’s questions.
Nicola Sturgeon making her way to the chamber in the Scottish parliament before first minister’s questions. Photograph: Andrew MacColl/REX/Shutterstock

Updated

The Centre for European Reform has now issued its statement about what its director, Charles Grant, was alleged to have said about Treasury officials. It echoes what Grant himself said earlier about how he had not claimed that officials were rigging the forecasts and how the Tory MP Jacob Rees-Mogg had misrepresented what he had said. (See 12.36pm.)

Brexit minister Steve Baker condemned by union for questioning civil servants' impartiality

Steve Baker, the Brexit minister, has been strongly criticised by the FDA, the union representing senior civil servants, for floating the possibility that Treasury civil servants have been rigging their Brexit impact assessments. The allegation was put to Baker in the Commons earlier and, although he did not say it was true, he did not dismiss it either. (See 12.25pm.) In response, the FDA general secretary Dave Penman told the Guardian.

It’s clear that Steve Baker does not understand the responsibilities that come with being a minister of state. It is simply not good enough to stand at the despatch box and peddle the myths being articulated by backbenchers, simply because you share their ideology.

If Mr Baker believes these serious accusations have merit he is obliged to either take action against those concerned or clear their name publicly.

Civil Servants understand their obligations to act impartially, but it would appear that once again Mr Baker doesn’t. It is increasingly obvious that certain ministers are untouchable and act with impunity, undermining the very government they serve and the civil servants who support it.

This is the second time in a week Baker has been denounced by the FDA. On Tuesday he infuriated the union by saying civil service forecasts were “always wrong”.

Corbyn says care workers are 'grossly underpaid'

Jeremy Corbyn has said care workers are “grossly underpaid” and pledged £8bn of extra funding for social care if elected. As the Press Association reports, he made the comments during a visit to Milton Keynes University Hospital, where he toured the A&E and cancer wards and spoke to patients. He said:

Care workers particularly are grossly underpaid, do a very important and responsible job and should be better recognised as part of our wider health service.

Corbyn called the present social care budget “insufficient” and promised to increase funding by £8bn over the course of a parliament if elected.

Jeremy Corbyn visiting Milton Keynes University Hospital.
Jeremy Corbyn visiting Milton Keynes University Hospital. Photograph: Joe Giddens/PA

Theresa May, her husband Philip, the Chinese president Xi Jinping and his wife Peng Liyuan drinking tea during a tea ceremony at the Diaoyutai State Guest House in Beijing.
Theresa May, her husband Philip, the Chinese president Xi Jinping and his wife Peng Liyuan drinking tea during a tea ceremony at the Diaoyutai State Guest House in Beijing. Photograph: DAN KITWOOD / POOL/EPA

Charles Grant has just told me that he does recall having a conversation with the Brexit minister Steve Baker about Treasury Brexit modelling, but that he did not say the Treasury was fixing the results. (See 12.25pm and 12.33pm.) Grant said:

I recall staying to Steve Baker at a Prospect lunch at the Conservative conference that I was aware of research the Treasury had done. This apparently showed that the economic benefits of the UK forging FTA’s (free trade agreements) with third countries outside the EU were significantly less than the economic costs of the leaving the customs union. (I may have said customs union and single market).

I did not say or imply that the Treasury had deliberately developed a model to show that all non custom union options were bad, with the intention to influence policy.

Updated

Charles Grant, director of the Centre for European Reform, has just posted a message on Twitter saying his words were misrepresented by Jacob Rees-Mogg in the Commons earlier. (See 12.25pm.)

Brexit questions in the Commons - Summary

Here are the main points from Brexit questions in the Commons earlier.

In the joint report which we concluded and got agreement on in December, the European Union agreed that the transition date, the end date for ongoing permanent residents’ rights - not possibilities, rights - will be March 2019.

And his junior minister Robin Walker said:

The citizens’ rights agreement reached in December, and set out in the joint report, does give certainty about the rights of EU citizens already here going forward. But this agreement does not cover those who are arriving after we leave the EU.

Davis is right about the joint report (pdf). It says in paragraph 6 that the withdrawal agreement will “provide reciprocal protection for Union and UK citizens, to enable the effective exercise of rights derived from Union law and based on past life choices, where those citizens have exercised free movement rights by the specified date” and in paragraph 8 that the “specified date” was when the UK left the EU. But, when the joint report was published, the European commission also published its own document (pdf) setting out its own interpretation of what was agreed and it said, in the event of there being a transition, EU nationals arriving during the transition should get protected rights too. It said:

This ‘specified date’ should be the date of the United Kingdom’s withdrawal from the Union, without prejudice to discussions, in the second phase of the negotiations, on a possible transitional period and on appropriate adaptations flowing from it as regards the “specified date”. In the Commission’s view, in case of any transitional period implying the continued application of the Union’s acquis on the fundamental freedoms, it is clear that citizens would need to be fully entitled to their rights to free movement as before the United Kingdom’s withdrawal, and that, therefore, the provisions of the Withdrawal Agreement on the content of citizens’ rights and on governance as regards those rights can only become applicable at the end of such transitional period. In other words, in such case, the ‘specified date’ should, in the Commission’s view, be defined not as the date of the United Kingdom’s withdrawal, but as that of the end of the transitional period.

  • Steve Baker, a Brexit minister, refused to dismiss a claim that civil servants were rigging their Brexit analyses to show that the UK should stay in the customs union. The claim was made by the Tory Brexiter Jacob Rees-Mogg. He asked Baker if he had heard the claim from Charles Grant, director of the Centre for European Reform, that “officials in the Treasury have deliberately developed a model to show that all options other than staying in the customs union were bad and that officials intended to use this to influence policy”. Rees-Mogg went on:

If this is correct, does he share my view that it goes against the spirit of the Northcote-Trevelyan reforms that underpin our independent civil service?

Baker replied: “I am sorry to say that my honourable friend’s account is essentially correct.” But then he made it clear that he was saying it was correct that Grant had made this claim, not that he was saying the claim was necessary true. But Baker did not dismiss the claim either. He told MPs:

At the time I considered it implausible because my direct experience is that civil servants are extraordinarily careful to uphold the impartiality of the civil service. I think we must proceed with great caution in this matter but I heard [Grant] raise this issue. I think we need to be very careful not to take this forward in an inappropriate way. But he has reminded me of something which I heard. I think it would be quite extraordinary if it turned out that such a thing had happened.

The Centre for European Reform is due to put out a response soon.

(It may well be that Rees-Mogg has misunderstood Grant, and that Grant was simply saying Treasury officials thought their models would show that staying in the customs unions was the best option, not that they had been rigged to produce this outcome.)

  • Davis said government officials started work on their Brexit impact analysis last year and that he said so in evidence to the Brexit committee in December. Asked by Labour’s Sir Keir Starmer when he first found out about the work, Davis said:

Actually, I told the select committee that this work was under way last December.

  • Davis said officials were trying to produce a model for what would happen to the economy after Brexit that was more accurate than previous models. He said:

We are trying to do something which is incredibly difficult. Every forecast that has been made about the period post-referendum has been wrong. What has been going on has been an attempt to find a way of getting a better outcome.

  • He said that the UK’s share of EU assets had been taken into account when the “Brexit bill” (my term, not his) had been calculated. The UK has agreed to pay the EU up to £39bn when it leaves. Asked what would happen to the UK’s share of EU assets, Davis replied:

This was a proponent of the negotiation which brought the public claim down from 100bn to 35bn. Part of that was offset by our assets.

Davis did not specify whether he was talking in euros (at one point it was reported that the EU was demanding up to €100bn) or in pounds (the government has said it will end up paying between £35bn and £39bn.

(I’ve corrected the earlier post on this, because it wrongly quoted Davis as saying “half” of the reduction was caused by the UK’s share of EU assets being taken into account, not “part”. I misheard. See 10.29am.)

  • Davis said he would be meeting Michel Barnier, the EU’s chief Brexit negotiator, “shortly”.

Updated

China Plus, an English website for China Radio International, has more on the surprise revelation that Theresa May is known as “Auntie May” in China (see 10.57am) - although, given that China Radio International is state-run, it might be of more interest as propaganda than as a proper insight into May’s standing with Chinese youth.

Campaigners for the rights of EU citizens in the UK have predicted “utter chaos” in Britain after Theresa May vowed to stop freedom of movement for all Europeans coming to the country next March, my colleague Lisa O’Carroll reports.

Theresa May meets Chinese president Xi Jinping

Theresa May shaking hands with the Chinese President Xi Jinping ahead of their bilateral meeting at the Diaoyutai State Guest House in Beijing.
Theresa May shaking hands with the Chinese President Xi Jinping ahead of their bilateral meeting at the Diaoyutai State Guest House in Beijing. Photograph: CHRIS RATCLIFFE / POOL/EPA

Theresa May has met President Xi Jinping in Beijing in the diplomatic high point of her three-day trip to China, the Press Association reports. Seated opposite President Xi in the opulent Diaoyutai State Guesthouse, May said Britain and China were enjoying a “golden era” in their relationship, and added that she wanted to “take further forward the global strategic partnership that we have established”. She told the Chinese president that the trade side of her visit had been “very successful”.

The links between us go beyond trade. I’m very pleased with the people-to-people links we have been able to build on in education and in culture too.

Also, as you say, we are both significant players on the world stage of outward looking countries.

And as we both sit together as permanent members of the Security Council of the United Nations, there are global challenges which we both face, as do others in the world.

As you say, there are areas in which we can work together.

As the Press Association reports, shortly before her encounter with Xi, the PM learned that she had been granted the affectionate nickname “Auntie May” by some Chinese. An interviewer on TV network CCTV told her: “That’s really a kind of a call for Chinese - you’re one of the members of the family.”

PA also says May took time out from her round of official meetings to tour the Forbidden City - former home of China’s emperors - with husband Philip. And May enjoyed a cultural programme laid on by their hosts, including a trip to the Great Wall.

Theresa May and Philip May pose for a photograph as they tour the Forbidden City in Beijing.
Theresa May and Philip May pose for a photograph as they tour the Forbidden City in Beijing. Photograph: CHRIS RATCLIFFE / POOL/EPA

Jacob Rees-Mogg, the Tory Brexiter, told MPs that Charles Grant, director of the Centre for European Reform, said he had been told Treasury civil servants were determined to produce modelling showing that the UK would be worse off under all Brexit scenarios if it left the EU. He said that that was against the spirit of civil service neutrality.

Steve Baker said it was true that Grant had made that claim. It was an “extraordinary allegation”, he said. But he said he did not know if the civil servants had really said what they were alleged to have said.

Brexit questions is now over. I will post a summary soon.

Hilary Benn, the Labour chair of the Commons Brexit committee, says he expects the government’s Brexit impact report, leaked this week, to be handed over to his committee shortly in the light of yesterday’s vote. He says yesterday the Brexit minister Robin Walker said the document did not reflect government policy. So why have officials being modelling the effects of all Brexit outcomes except government policy?

Steve Baker says the report was unfinished. The government is not responsible for it being leaked.

Priti Patel, the former international development secretary, asks what the UK is doing to ensure it gets back its share of EU assets.

Davis says this was an important part of the negotiation on the “Brexit bill” (my term, not his.) He says the the UK got the figure down from 100bn to 35bn, and that part of this was a result of the UK’s share of EU assets being taken into account.

UPDATE: I’ve corrected the final sentence. Originally it said “half of this was a result of the UK’s share of EU assets being taken into account” but I misheard and Davis said “part”, not half. I have also taken out the £ sign, because Davis did not make it clear whether he was referring to pounds or euros, and I’ve changed 40bn to 35bn, which is the figure Davis used.

Updated

Sir Keir Starmer, the shadow Brexit secretary, asks when Davis first knew economic modelling work on Brexit was being done in Whitehall.

Davis says he told the Brexit committee in December that the government would be doing this assessment, and that some of this work had started already.

Starmer asks when Davis was first talked through this modelling by officials in his department.

Davis says Starmer is trying to pretend that his colleagues have been critical of civil servants. (That’s a reference to what Steve Baker said on Tuesday.) But this is a work in progress. The government is trying to do something that, when people have tried in the past, they have got wrong. Every forecast about Brexit has been proved wrong, he says.

So what has been going on has been an attempt to find a way of getting a better outcome. He says he spoke to his own department, and the cross-departmental group working on this, on January about this matter.

Labour’s Heidi Alexander says there is a huge gap between what the UK and what the EU think will happen to financial services after Brexit. How will the government protect jobs in this sector.

Davis says the EU has not decided is negotiating guidelines on this. The EU will agree guidelines at the summit starting on 22 March. He says he is talking to EU colleague on this issue, and is going to Luxembourg later for meetings on this topic.

Sir Desmond Swayne, a Conservative, asks David Davis in the Commons if the transition period could be shorter. Yes, says Davis, if he accepted the proposal of the EU, which is for the transition to last 21 months, not two years.

Theresa May accused of reneging on deal on rights of EU nationals

The Today programme also featured an interview this morning with Mairead McGuinness, vice president of the European parliament. Responding to what Theresa May said overnight about EU citizens coming to the UK during the transition not having the same rights as those who came before, McGuinness said this amounted to going back on the agreement reached in December. She told the programme:

There is total illogicality, because the European Union will insist that the rights of UK citizens in that transition period will remain exactly as they are today in terms of their access to new members states and the rights that come with it.

The agreement around citizens rights which we discussed in great detail up to December in the withdrawal agreement apply at the end of the transition period, not at the start. I think what Theresa May is doing is trying to keep the Conservative party Brexiteers online, because at an EU level it is difficult to understand fully what the United Kingdom wants.

The idea of a transition is to get us both to a place where we have a new relationship, but in the interim while the UK would leave the institutions it remains within all of the acquis, and that was quite clear at least from the EU side.

Those people who are going to the UK are there to work. That argument about figures goes to show that there is little respect for the dignity of people, whether they are UK citizens or European, in terms of work. I do insist that the transition period has to be as it is.

The Labour peer Andrew Adonis has described May’s comments as “shameful”.

And Nicky Morgan, the Conservative former education secretary who now chairs the Commons Treasury committee, has accused the government on inconsistency.

In the Commons David Davis tells MPs that talks on Brexit with the EU have been continuing since Christmas. Officials have been discussing technical issues, he says, and he will “shortly” be meeting Michel Barnier, the EU’s chief Brexit negotiator.

Since George Osborne’s Today interview (see 9.12am) came up at Brexit questions, this is what the former chancellor said about the dangers of leaving the customs union.

We now face a series of choices about the kind of Brexit we want and we have a much clearer idea of the consequences. We should look clearly at the costs and benefits of, for example, leaving the customs union and doing less trade with Europe versus what we might gain from doing a trade deal with America. At the moment the sums don’t stack up for that kind of decision ...

These are the choices we face and if we are saying we want out of all of our economic arrangements with our European neighbours then we are embarking on a risky economic course according to the figures that the Government themselves have produced ...

If you want to put a better argument to the country than the one Jeremy Corbyn is putting, which is in my view a risky economic proposition, then you have got to put a sound economic plan forward. You can’t put, yourself, to the country a risky economic proposition.

Osborne was also asked if he agreed with David Cameron’s assessement that the vote for Brexit was “a mistake, not a disaster”. Osborne was Cameron’s closest ally when they were in government together, but on this issue Osborne sounded as if his assessment of Brexit was more negative than his friend’s. Asked if he agreed with Cameron, he replied:

Well, I certainly agree with him that it’s a mistake.

Asked about Brexit not being a disaster, Osborne just said he hoped Britain could be a great country.

In the Commons Labour’s Kate Green asks if the comments from Theresa May overnight about EU nationals coming to the UK during the transition having less rights than EU nationals here now could have a chilling effect. They could stop EU nationals coming to the UK, she suggests.

Robin Walker, the Brexit minister, says the agreement reached in December at the end of phase one of the talks covered the rights of EU nationals in the UK now. But it did not cover the rights of EU nationals coming during the transition.

In the Commons the Labour MP Barry Sheerman has just asked the Brexit minister Steve Baker if he heard George Osborne on the Today programme this morning and what he thought of Osborne’s warning that British manufacturing would be doomed outside the customs union. Baker said that he missed the interview, but that he did once hear Osborne on the Today programme during the EU referendum, just before he went on the programme himself to argue the opposite case.

David Davis takes Brexit questions in Commons

In Brexit questions in the Commons Suella Fernandes, a junior Brexit minister, has just told MPs that it is government policy to leave the customs union.

But the Daily Telegraph today claims Liam Fox, the international trade secretary, failed to rule out the UK staying in customs union in an interview he gave in China, where he is accompanying Theresa May on her trade trip. The story is premised on this quote.

[Fox] said British exports to China were up 25 per cent, compared to global trade growth of 3.7 per cent, and was asked by Sky News whether, if Britain is able to strike deals with China while it is in the customs union, “could you live with us staying in a customs union beyond the implementation period?”

He replied: “Self evidently we can do it in a customs union because we can do it now while we are still in the EU.”

David Davis, the Brexit secretary, has just started taking Brexit questions in the Commons.

Here are some of the Brexit stories in today’s other papers that might come up. You can find all the Guardian’s Brexit stories here.

The measures, outlined in a presentation to EU27 member states last week, show the bloc wants unprecedented safeguards after the UK leaves to preserve a “level playing field” and counter the “clear risks” of Britain slashing taxes or relaxing regulation.

Brussels describes the UK economy as too big and too close to treat like a normal trade partner and wants to define new ways to enforce restrictions on taxation, state aid, environmental standards and employment rights

The negotiators said any deal on future relations had to “cater to the specificities” of the UK-EU relations — implying the “depth and breadth” of relations justifies tighter controls than those expected of the US, Japan or Canada.

Senior figures who support Brexit are already blaming the prime minister for commissioning new analyses showing that the economy would suffer whatever the means of departure.

Tension over Britain’s destination outside the bloc is said to be at a critical level with a showdown in cabinet due over two days next week. Brexiteers want Mrs May to push for the maximum freedom from EU rules and to show that she will accept no deal unless Brussels agrees.

News that Mrs May has delayed the first piece of legislation designed to prepare Britain for a such a scenario — by making sure British lorries can still travel on EU roads — will further inflame those Tories backing Leave.

Downing Street halted publication of the Road Haulage Bill last month after analysis found that there would be just 1,200 permits to share between 75,000 British lorries. It is also being delayed because cabinet ministers and senior officials believe that planning for no deal may upset Brussels while transition talks are under way.

Although it has not yet been discussed formally by diplomats formulating the EU27’s negotiating position, the idea will offer hope to British negotiators desperate for a sign that national officials are willing to be more pragmatic about the Brexit talks than the European Commission and the EU’s chief negotiator Michel Barnier. The U.K. has accused Barnier of being dogmatically attached to an inflexible vision of the European project.

Barnier has flatly ruled out any prospect of financial services access under the Canada-style trade agreement the U.K. is seeking, saying before Christmas, “There is not a single trade agreement that is open to financial services. It doesn’t exist.”

Updated

George Osborne tells Tory MPs they have power to insist on soft Brexit

It’s been a while since George Osborne, the Conservative former chancellor, has had the 8.10 slot on the Today programme but he was there this morning and, true to form, he did his best to stir things up. He was there ostensibly to talk about the Northern Powerhouse Partnership (which he champions, alongside being editor of the London Evening Standard) and a report it has published today highlighting the need for higher educational standards in the north of England, but it did not take long before the conversation turned to the Conservative party and Brexit.

Osborne is on record as saying after the general election that Theresa May was a “dead woman walking”, and joking about wanting her “chopped up in bags in my freezer”, so no one was expecting him to be supportive. In the interview he did not retract his view that at some point she needs to be replaced as party leader. But he did not escalate his personal criticisms of her, he resisted invitations to call for a coup now, and he said wished her well on her trade mission to China (improving relations with Beijing being a cause he promoted when he was in government.)

But Osborne did use his interview to encourage Tory MPs to rebel over Brexit. Earlier this week his paper said the UK should join the European free trade association (Efta) after Brexit - a soft Brexit option currently not favoured by the government. He told Today that May did not have a majority and that, if Tories wanted to insist on the UK staying in the customs union, or joining Efta, then they had the chance to change Brexit policy. He said:

Well, one of my observations, as someone who was an MP for many years, is that the government does not have a majority. I know that’s a really obvious statement of fact but the first rule of politics is that you’ve got to learn to count. And when you have increasing number of Conservative MPs saying, ‘I’m not happy leaving the customs union’ or ‘I think we should consider Efta membership’, that is going to pose a challenge to the government, of course. But it’s also going to empower parliament.

And the last time I checked, one of the principal arguments for the Brexiters was that they wanted more parliamentary sovereignty.

I will post more from the interview later.

Here is the agenda for the day.

9am: Theresa May meets the Chinese president Xi Jinping in Beijing. Then she flies to Shanghai.

9.30am: David Davis, the Brexit secretary, takes questions in the Commons.

9.30am: Jeremy Corbyn visits a hospital in Milton Keynes.

Around 11.30am: MPs begin a debate on a backbench motion saying MPs taking maternity leave should be able to vote in the Commons by proxy. Later there will be a debate on a backbench motion calling for a consultation on how to abolish car parking charges at NHS hospitals.

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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