Brexit afternoon summary
- Theresa May has taken back control of crucial negotiations with Brussels from her new Brexit secretary just hours after the government published its latest white paper on withdrawing from the European Union. Giving evidence to the Commons Brexit committee, Dominic Raab, the new Brexit secretary, said it was a “caricature” to suggest that this meant his department had been sidelined.
- Raab suggested the government was willing to compromise on the Chequers plans set out in a recent white paper. (That is not the same as the white paper published today.) Addressing the committee, he said:
This is a far advanced, well thought-out, principled and pragmatic document and we expect to negotiate on the basis of it. Obviously, we will consider what Monsieur [Michel] Barnier and the EU27 come up with but this is an ambitious approach which takes into account some of the concerns the EU has expressed to us.
This is from Politico Europe’s Tom McTague.
Raab has just confirmed the obvious: The government is prepared to make further concessions to reach a final deal.
— Tom McTague (@TomMcTague) July 24, 2018
“Of course we will consider what Monsieur Barnier and the European Commission come up with."
He did — though — warn there were limits to how much the UK could accept
- Raab confirmed that the UK wanted to ensure that the promise to pay £39bn to the EU in the withdrawal agreement would be conditional on the EU going ahead with the trade deal expected to be agreed in outline form at the same time.
- He said that he agreed with Michel Barnier, the EU’s chief Brexit negotiator, about wanting to “de-dramatise” the Irish border issue. (See 4.05pm.)
- Raab refused to rule out Northern Ireland having a different regulatory regime from the rest of the UK. This is from Bloomberg’s Ian Wishart.
Raab doesn't rule out a regulatory border in the Irish seahttps://t.co/oXaUQc66Lm pic.twitter.com/XKT9ZUl7Yr
— Ian Wishart (@IanWishart) July 24, 2018
- Raab hinted that EU nationals could get a preferential immigration status after Brexit. (See 3.31pm.)
- He said the government would ensure that, in the event of a no deal Brexit, there were adequate food supplies. Asked about reports the government was planning to stockpile food, Raab said:
We will look at this issue in the round and make sure that there’s adequate food supplies. It would be wrong to describe it as the government doing the stockpiling.
- Olly Robbins, the prime minister’s chief Brexit adviser, told the same committee that Theresa May had not cleared her Chequers plan with other EU leaders in advance. Asked about this, he said:
Over months now, ministers, the prime minister and the official team supporting them have been sounding European partners out on all the issues the white paper takes on.
But even if we were to try to say ‘Does this package work for you?’ I doubt we would get a straight answer.
So what we have been trying to do is work out what is in the best interests of the UK and advise ministers on putting that position forward.
- Raab was accused of alarming EU nationals when he told MPs in a statement to the Commons that, in the event of a no deal Brexit, there would be “no wholesale removal of rights” from EU nationals living in the UK. The Green MP Caroline Lucas said Raab had “sent alarm bells clanging in the homes of around three million EU citizens living in this country”. Subsequently, in evidence to the committee, Raab said that he intended to say there would be no wholesale removal of EU nationals and that their rights would be respected. (See 3.07pm.)
- The House of Lords has voted down, by 130 votes to nine, a proposal from the anti-Brexit peer Lord Adonis for it to sit over the summer dealing with Brexit. He posted this on Twitter before the vote.
About to move my House of Lords motion to cut short the recess so that Parliament does its job in this national crisis rather than going on a 10 week holiday
— Andrew Adonis (@Andrew_Adonis) July 24, 2018
That’s all from me for today.
Thanks for the comments.
Updated
DUP suspends Ian Paisley
The DUP MP Ian Paisley has been suspended by the Democratic Unionist party, the Press Association reports. The North Antrim MP will also be excluded from the House of Commons for 30 sitting days from September 4 following a major breach of parliamentary rules. Electoral authorities in Northern Ireland are to begin drawing up measures which could see him face a by-election if enough constituents demand it. He has vowed to fight for his seat if he faces the electorate over his failure to declare two luxury family holidays paid for by the Sri Lankan government.
As the Press Association reports, in March 2014, the MP lobbied against a proposed United Nations resolution to investigate alleged human rights abuses during a civil war on the Indian Ocean island without citing his financial benefits.
If 10% of his constituents sign a petition, an election will be called.
A DUP statement said it took the matter very seriously. It said:
The party officers have decided to suspend Mr Ian Paisley MP from membership of the party pending further investigation into his conduct.
Hilary Benn wraps up the Brexit committee hearing, saying he expects the committee to take evidence again from Dominic Raab and Olly Robbins after the October EU summit.
This is from Politico Europe’s Annabelle Dickson.
This is going well. DExEU and Cabinet Office press offices both claiming it is the responsibility of the other to respond to a question about negotiations lodged this afternoon.
— Annabelle Dickson (@NewsAnnabelle) July 24, 2018
Here is George Osborne, the former chancellor, on the news that Theresa May has taken charge of the Brexit negotiations.
News? Who was in charge before? https://t.co/oMTldtX5uG
— George Osborne (@George_Osborne) July 24, 2018
Q: The final paper was very different from the one being drafted by DExEU.
Robbins says there was not “some sudden twist in the road”, when one white paper was replaced with another.
Jacob Rees-Mogg, the Conservative Brexiter, goes next.
Q: [To Robbins] Congratulations. You must be very pleased with the PM’s statement. Where does your authority come from?
Robbins says he works for the goverment.
Q: Do you accept that advisers advise, and ministers decide.
Yes, says Robbins.
Q: Did David Davis receive all the advice you gave?
Robbins says in the past there were two teams of civil servants, working closely together, one advising the PM and one advising Davis. They worked more closely than other teams in Westminster. But now there will just be one stream of advice, he says.
Q: When did you start working on the Chequers plan?
Robbins says the civil service has been working for some time on how to deliver the plan set out in the Mansion House speech. So, from the day it was delivered, civil servants have been thinking hard about how to implement it.
Q: Papers were presented to the cabinet just before Chequers. When did you start to write those?
Robbins says he does not want to discuss that.
Q: I’m not asking what was in them. I’m asking about the timeline. It is important for knowing cabinet government is working.
Robbins says these papers have their origins in other papers. He says he had been working on them for some time.
Q: When did you start?
Robbins says the PM asked for first drafts about a fortnight before.
Rees-Mogg concludes by saying that he does not blame Robbins for any of this. Robbins works for the PM, he says - implying he finds May at fault.
UPDATE: This is from MLex’s Matthew Holehouse.
Rees-Mogg, after long questioning, gravely says Robbins/DExEU situation is "worrying".
— Matthew Holehouse (@mattholehouse) July 24, 2018
Chairman Benn, chirpily: "Well those of us who HAVE been Cabinet ministers would say that sounds fairly normal!"
Updated
Q: Places like Greece have dreadful unemployment. The EU has not helped. I’m worried we are accepting their rules.
Raab says he agrees with Mackinlay about the flaws with the EU.
Craig Mackinlay, a Conservative Brexiter, goes next.
Q: There was a plan that the public were happy with. But it was ripped up. When?
Robbins says he does not accept that characterisation. He says he was proud to work with David Davis and happy to work with him. The origins of the Chequers plan are well established.
Q: My mother had a good saying: “To yourself be true.” I have asked a lot of people about the Chequers deal, and they don’t like it. This “common rulebook” is not a common rulebook. It is their rulebook. If am making a pen for sale in the UK, why should I have to comply with an EU standard. It could make it harder to sell my pen in the US, where standards are slightly different.
Raab says, if the UK had full regulatory autonomy, that would be “an additional string to our bow” in trade talks.
But he says the common rulebook approach will avoid delays at the border, and addresses the Irish border issue.
Asked about his involvement in Vote Leave, Raab says he was proud to be involved in it. But he says he was not involved in how it allocated money. And he did not have dealings with BeLeave.
He suggests that Kinnock is raising this because he wants to reverse the referendum result.
Kinnock says this is bigger than the referendum. He says this is about the integrity of our democracy.
Q: It is hard to believe the campaign committee that you were on did not know about the BeLeave donation, the biggest you made.
Raab says Kinnock misunderstands the role of that committee.
And he says, if Kinnock is concerned about the “soul of our democracy”, he should not be backing a second referendum.
Kinnock says he agrees. He says he has never advocated a second referendum.
Labour’s Stephen Kinnock goes next.
Q: You are on the record as saying you do no support the Human Rights Act, that it is too difficult to hire and fire in this country, and that you do not support the working time directive. And you once complained about “obnoxious” feminist bigotry.
Raab says Kinnock is quoting from a book he wrote in the past. He says he point he was making about human rights was to query whether they deserved a higher status than other rights.
On the working time directive, he says the government has been clear it will maintain workers’ rights. He fully accepts that.
And he says, if you are serious about rights, why should you need to delegate that responsibility to an outside body.
And, on feminism, he say he fully supports equal rights. But he thinks you should call out double standards where you see them.
Q: Can you reassure people that the Chequers plan will give the UK control of its trade policy?
Raab says the UK will have the full ability to reduce tariffs. That will be a major incentive, he says.
Richard Graham, a Conservative, goes next.
Q: What will happen to your department after the UK has left the EU?
Raab says the important thing is to ensure that Whitehall has the right configuration now. He is not interested in what happens to the “deckchairs” later. He says if he put himself out of a job, he would see that as a success.
Hilary Benn goes next.
Q: How would a “good faith” clause work, if the EU said it was offering the UK a good trade deal, but the UK said it was not?
Raab says there would have to be sufficient clarity about what was agreed in October, with the details being agreed later.
Labour’s Pat McFadden goes next.
Q: In the Sunday Telegraph you said the UK would only pay its exit bill if the EU offered a trade deal. But at the moment the draft withdrawal agreement does not include a conditionality clause, does it?
Raab accepts that is not in the withdrawal agreement now. It needs to be added, he says.
He says this can be done in different ways.
One option would be to insert a clause in the withdrawal agreement.
But there must be clear obligation on the EU to move expeditiously and get the trade deal agree.
Q: But the December agreement said the financial settlement was without prejudice, and hence not dependent on a final trade deal.
Raab says the government has also always made it clear that nothing is agreed until everything is agreed.
Robbins says this is not a new feature. It is something the UK has discussed with the commission on many occasions already.
Here is the BBC’s Laura Kuenssberg on the committee’s two witnesses.
Robbins and Raab sounds a bit like a law firm that would be reassuringly expensive if you were that way inclined - but you wouldn’t necessarily be sure what they were talking about when you went to see them
— Laura Kuenssberg (@bbclaurak) July 24, 2018
Jonathan Djanogly, a Conservative goes next.
Q: The payments that we make to the EU won’t be conditional on a trade deal, will they? People are concerned we will be giving away all that money without knowing we will get a trade deal.
Raab says he has been clear that there will have to be an agreement that the EU will proceed to a trade deal. He says the deal will have to make it clear that both sides have to comply with their obligations.
Q: So you are suggesting conditionality?
Yes, says Raab. But he claims he is not going beyond what David Davis or Theresa May have said before.
Hilary Benn goes next.
Q: Why do you think just about every forecast says a no deal Brexit will be very bad for the economy?
Raab says forecasts about what would happen if the UK voted to leave did not materialise.
He accepts there would be uncertainty in the short term. But in the long term, the UK could thrive.
He says he will not “wallow in pessimism”.
He says we should now “cower in the corner, afraid of our own shadow”.
Benn says Raab should read the evidence given to the committee this morning about a no deal Brexit.
Labour’s Seema Malhotra goes next
She suggests that the technical notices coming about what needs to happen in the event of a no deal are coming too late. Raab does not accept that. He says a lot of work has already been done. Now is the time to go public. But notices will be issued in time, he says.
Q: Do you still think the UK will thrive if it leaves the EU with no deal?
Yes, says Raab. He says he thinks this country’s best days still lie ahead.
But he wants a deal, he says.
He is not saying no deal would not present problems. But in the medium to long term, he is confident in this country, he says.
Raab says it is a caricature to say that the PM’s statement (see 3.17pm) means the DExEU has been “downgraded”.
(In other words, he won’t like our headline.)
Raab tells MPs the government has no plans to draw a border down the “Red Sea”. He corrects himself, and says he meant the Irish sea. The DUP’s Sammy Wilson tells him he can draw as many borders as he wants down the Red Sea.
Raab also says he has agreed with Michel Barnier, the EU’s chief Brexit negotiator, that they will try to apply a “de-dramatisation” approach to the Irish border issue. “De-dramatise” is a phrase coined by Barnier in this context.
- Raab says he agrees on the need to “de-dramatise” the Irish border issue.
The Labour party has issued this statement about the Downing Street announcement about DExEU. (See 3.17pm.) It is from Jenny Chapman, the shadow Brexit minister.
Dominic Raab has been sidelined by the prime minister before he has even had the chance to get his feet under the table.
Raab says the government is looking at various mechanisms that could be used to ensure that the UK’s payments to the EU are conditional on it implementing the trade deal that will be agreed in outline alongside the withdrawal agreement.
Labour’s Stephen Timms is asking the questions now.
He asks about the difference between what the white paper said about the UK not expecting the EU to collect tariffs on its behalf, and ERG amendment passed saying that the UK will only collect EU tariffs if the EU reciprocates.
(More on that here.)
Raab says the white paper does envisage the UK and the EU settling up when they collect tariffs. He again insist the ERG amendment passed last week is compatible with the white paper, but he says he will write to the committee explaining this in detail.
Raab says the amendments passed to the customs bill next week are not inconsistent with the plans in the white paper.
Q: When will people know if there is not going to be a deal?
Raab says he is “confident” a no deal can be avoided.
He says he cannot give a precise moment where it would be possible to know that a deal was impossible.
UPDATE: Politico Europe’s Tom McTague says Raab is wrong about this. There is a precise date, he points out.
It's amazing really.
— Tom McTague (@TomMcTague) July 24, 2018
Raab is asked by MP on the Brexit Select Committee when it will be clear that there is no deal. Raab, the Brexit Sec, says he can't say.
But he can. It's the law.
Under the EU (Withdrawal) Act, the govt has to inform MPs by Jan 21.https://t.co/wT4RYPZTzO
Updated
Q: When will we see the UK’s permanent proposal for a relationship with Ireland?
Raab says the white paper proposal shows what the UK wants. Other than that, he does not want to say more because he wants to protect the integrity of the negotiation.
The SNP’s Peter Grant goes next.
Q: Did you seek an assurances from the EU that the white paper would be acceptable to them before it was agreed at Chequers?
Not in those terms, says Robbins.
He says a lot of time was spent sounding out EU colleagues. But they were not asked explicitly, ‘Is this what you would accept?’
Q: Is this a take or leave it offer?
Raab says it is not the opening pitch. We are well into the negotiation. But it is a negotiation, he says.
It is a far advanced offer, if I can put it like that.
Raab hints EU nationals could get preferential immigration status after Brexit
Q: You have talked a lot about pragmatism. Are you able to give a sense of where you might compromise. Would you give EU nationals priority in immigration rules?
Raab says he always talks about being principled and pragmatic. He says he does not want to reveal his negotiating stance.
He says in talks “there is a sensible conversation to be had” about preferential status for foreign nationals.
- Raab hints EU nationals could get a preferential immigration status after Brexit.
Stephen Crabb, a Conservative, goes next.
Q: Is the white paper an opening bid, or a final offer?
Raab says the government sees this as a pragmatic approach. He says he would not says it “meets [the EU] halfway”, but it is about showing the UK has acknowledged their concerns. He says, if the other side are pragmatic, it can be the basis for a deal.
Q: What is the difference between papers and texts?
Robbins says ministers had papers at Chequers. They were not for public consumption. Once agreement had been reached, they had to be converted into a text.
Peter Bone, another Tory Brexiter, is asking questions now.
He asks Robbins to confirm that there were two Brexit white papers - one being drafted by David Davis, and another being drafted secretly by Robbins.
Robbins says he does not accept this. He says what happened was routine for this sort of operation.
He says he prepared papers ahead of the Chequers meeting where the white paper was finalised.
Asked about the PM’s announcement, Raab says Theresa May has always been in overall charge of the negotiations. He says he deputises for her. These changes are about ensuring there is a unified chain of command, he says.
John Whittingdale, the Conservative Brexiter, suggests this means Raab and Robbins should swap places. He says Robbins is effectively the Brexit secretary, in charge of the negotiations.
May says Cabinet Office, not DExEU, now in charge of Brexit negotiations
Theresa May has published this written ministerial statement this afternoon. It is under the bland heading, “machinery of government change”, but it clearly shows that DExEU, the Department for Exiting the EU, is being downgraded. She says the Cabinet Office, and by implication Number 10, is now in charge of the Brexit negotiations, not the Brexit department (DExEU).
It says (bold text inserted by me):
I am making this statement to bring to the attention of the House a machinery of government change.
It is essential that in navigating the UK’s exit from the European Union, the government is organised in the most effective way. To that end I am making some changes to the division of functions between the Department for Exiting the European Union (DExEU) and the Cabinet Office.
DExEU will continue to lead on all of the government’s preparations for Brexit: domestic preparations in both a deal and a no deal scenario, all of the necessary legislation, and preparations for the negotiations to implement the detail of the future framework. To support this, DExEU will recruit some new staff, and a number of Cabinet Office officials coordinating work on preparedness will move to DExEU while maintaining close ties with both departments.
I will lead the negotiations with the European Union, with the secretary of state for Exiting the European Union deputising on my behalf. Both of us will be supported by the Cabinet Office Europe unit and with this in mind the Europe unit will have overall responsibility for the preparation and conduct of the negotiations, drawing upon support from DExEU and other departments as required. A number of staff will transfer from DExEU to the Cabinet Office to deliver that.
There will be no net reduction in staff numbers at DExEU given the recruitment exercise described above.
Updated
Raab insists rights of EU nationals living in UK would be protected in event of no deal Brexit
Benn refers Raab to what he said in the Commons earlier about there being no “wholesale removal” of the rights of EU nationals in the event of a no deal. (See 2.12pm.)
Raab says he said, or thought he said, that there would be “no wholesale removal of EU nationals” or removal of their rights.
Q: That does not give full reassurance?
Raab says the part of the withdrawal agreement covering EU nationals has been agreed.
He says the PM’s view has always been that the UK will not give unilateral reassurance until EU countries have made commitments affecting Britons living on the continent.
But he says, if the UK were to leave without a deal, the Home Office would act swiftly to guarantee the rights of EU nationals living in the UK.
- Raab insists rights of EU nationals living in UK would be protected in the event of a no deal Brexit.
Q: What about insurance? Broadcasting? Tech sector?
Raab says he is certain the economic impact was considered. But, as for whether research was done on a sector by sector basis, he would have to check.
Hilary Benn, the committee chair, says the committee got a “pretty downbeat” assessment of the Chequers plan from the witnesses who gave evidence to the committee this morning (from the City, insurance and broadcasting).
Q: Did you do an economic analysis of the economic impact of not having a common rulebook with the EU on banking and finance?
Raab says the government has done a lot of analysis, but he is not sure if that particular study has been done.
Dominic Raab and Olly Robbins give evidence to Commons Brexit committee
Dominic Raab, the Brexit secretary, and Olly Robbins, Theresa May’s chief Brexit adviser, have just started giving evidence to the Commons Brexit committee.
It should be a revealing session. It is Raab’s first appearance at the committee since he was appointed to replace David Davis.
The Raab statement is over.
But he will shortly start giving evidence to the Commons Brexit committee.
Labour’s Adrian Bailey says Raab’s response to Hilary Benn was not reassuring. (See 2.12pm.) He asks for an firmer commitment that EU nationals will have their rights protected if there is a no deal Brexit.
Raab says he thinks the white paper is clear on this.
Stephen Timms, the Labour MP, says the UK’s payment to the EU will be obligatory from the autumn. But the deal on a future relationship will not be binding, he says.
Raab says the white paper covers how the payments will be made.
Mike Wood, a Conservative, asks for an assurance that if MPs vote to keep parts of the European Communities Act, that won’t be extended beyond the transition period.
Raab says the transition period will be time limited.
Sammy Wilson, the DUP MP, says he welcomes the assurances that the EU will not be getting “a penny of our money” unless it offers the UK a good trade deal.
(That is not quite what Raab said, but Raab does not put him right.)
Raab says the principle of conditionality is written into the white paper.
That is a standard feature in international deals, he says.
Labour’s Stephen Kinnock asks if the government will publish an impact assessment before MPs vote on the withdrawal agreement.
Raab says the government will ensure the appropriate analysis is carried out.
Tom Brake, the Lib Dem Brexit spokesman, asks if the government will publish a white paper on what will happen in the event of a no deal.
Raab says the government wants to be ready for all eventualities.
Labour’s Pat McFadden asks if Raab has discussed the amendment to the customs bill passed last week saying that there has to be reciprocal collection of tariffs with Michel Barnier, the EU’s chief Brexit negotiator.
Raab says he won’t discuss what happens in the negotiating room. But he says nothing was passed that obstructs the government’s plans.
David Jones, the Brexiter Tory and former Brexit minister, says he welcomes Raab’s “robust” language on linking the payment to the EU to getting a good trade deal. He asks if this conditionality will be included in the bill.
Raab says nothing is agreed until everything is agreed. He says he wants to “establish that linkage in the withdrawal agreement directly”.
Raab says 'no wholesale removal' of EU citizens rights in case of no deal
Hilary Benn, Labour chair of the Brexit committee, asks if EU nationals living in the UK will be allowed to stay if there is no withdrawal agreement.
Raab says in those circumstances there will be “no wholesale removal of rights of EU nationals in this country”.
Updated
Steve Baker, the former Brexit minister, asks Raab if the government will ask MPs to agree to the transition plans, including reinstating parts of the European Communities Act to cover the transition, in the same vote where MPs will agree the future trade relationship.
Raab says it will be “part of the same process”.
Raab is now responding to Starmer.
He says the UK will be prepared regardless if there is no deal. But this is not the legislation for that, he says.
On conditionality, Raab says when you sign up to a treaty, both sides have to sign up to both sides. If one side fails to honour its obligations, it is open to the other side to take proportional action to make sure the other side does what it has to.
He says it is not clear that Labour is committed to honouring the EU referendum result.
He accuses Labour of taking the “opportunistic low ground”.
Starmer says there was no mention of Northern Ireland in Raab’s statement. He says that is a gaping hole.
He says Raab is now threatening to withdrawal payments from the EU. But Philip Hammond, the chancellor, said that was not a credible position. The UK was a country that pays its debts, Hammond said.
Starmer asks which position is the goverment’s - Raab’s or Hammond’s?
Starmer says, if there is no deal, there will be nothing to implement.
So what is the legislative plan in those circumstances, on issues like citizens’ rights?
Sir Keir Starmer, the shadow Brexit secretary, says the WAIB shows why the “gimmick” of including an exit date in the EU Withdrawal Act was a mistake.
The EU Withdrawal Act repealed the European Communities Act. But now, only days after the EU Withdrawal Act was passed, it is now being amended.
He says Raab said that only parts of the ECA would be saved. But in fact most of it will be saved, he says.
He says he cannot remember any bill needed as much amendment as the EU Withdrawal Act before the relevant bits have even come into force.
Just a few weeks ago many Brexiteers cheered section 6(1) of the Withdrawal Act extinguishing the role of the European court on the fixed day of the 29th March 2019 - and not so fast.
As we pointed out at the time, paragraph 80 of this white paper preserves the full role of the European court until December 2020 and again the Withdrawal Act will need major surgery.
I can’t remember legislation which has needed such great revision and amendment before the relevant parts have even come into force.
Updated
Raab confirms that the withdrawal agreement and implementation bill (known as WAIB in Whitehall) will reinstate parts of the European Communities Act (the legislation that took the UK into the EEC, repealed in the EU Withdrawal Act) so that EU law continues to apply during the transition.
And he says the UK’s financial settlement will be conditional on an agreement on trade.
Brexit Sec @DominicRaab confirms payment of £39bn divorce bill conditional on getting a deal. He warns: "If one side fails to honour its side of the overall bargain there will be consequences for the deal as a whole, and that includes the financial settlement'.
— Pippa Crerar (@PippaCrerar) July 24, 2018
Updated
Raab says the government is publishing the white paper today to allow MPs plenty of time to scrutinise the plans.
He says it is also intended to show Brussels that the UK is a reliable negotiating partner.
Dominic Raab's statement on Brexit withdrawal agreement bill white paper
Dominic Raab, the Brexit secretary, is now making a Commons statement about the white paper being published today on the withdrawal agreement and implementation bill, the legislation that will have to be passed in the autumn to implement the withdrawal agreement.
Jeremy Corbyn's speech and Q&A - Summary
Here are the main points from Jeremy Corbyn’s speech and Q&A.
The full text of the speech is here.
- Corbyn said he wanted to “reprogramme” the economy so that it is more focused on manufacturing and less focused on services.
Our new economic approach is necessary because for the last forty years a kind of magical thinking has dominated the way Britain is run.
We’ve been told that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports while we focus on the City of London and the financial sector.
While many economics professionals, politicians and City types insisted this was all a strength the banking crash confirmed it was in fact a profound weakness.
A lack of support for manufacturing is sucking the dynamism out of our economy, pay from the pockets of our workers and any hope of secure well-paid jobs from a generation of our young people.
That is why Labour is committed to turning things around.
It must be our job in government to reprogramme our economy so that it stops working for the few and begins working for the many.
That is why we will build things here again that for too long have been built abroad because we have failed to invest.
That prompted this comment from Allie Renison, head of Europe and trade policy at the Institute of Directors (although Corbyn was making a general point about government prioritising financial services over the last few decades, not at this point in the Brexit talks.)
What a nonsensical line in Corbyn's speech about Govt putting City ahead of manufacturing in Brexit negs. She's actually foregoing passporting and EU market access for fin servs while making the latter top priority for goods by prioritising reg. alignment with SM product rules
— Allie Renison (@AllieRenison) July 24, 2018
- Corbyn said Labour would promote British industry partly by favouring British firms in state procurement contracts.
Because Labour is committed to supporting our manufacturing industries and the skills of workers in this country we want to make sure the government uses more of its own money to buy here in Britain.
The state spends over £200bn per year in the private sector.
That spending power alone gives us levers to stimulate industry, to encourage business to act in people’s interests by encouraging genuine enterprise, fairness, cutting edge investment, high-quality service and doing right by communities.
But to ensure prosperity here we must be supporting our industries, making sure that where possible the government is backing our industries and not merely overseeing their decline.
Take the example of the three new Fleet Solid Support Ships for the Royal Fleet Auxillary.
Why is the government sending a £1bn contract and all the skilled jobs, tax revenues and work in the supply chain to build those three ships overseas when we have the shipyards to build them here?
Corbyn said Labour would adopt a three-pronged approach: using procurement to invest in British jobs and industry; investing in infrastructure; and investing in skills.
- He admitted that, in Brexit talks, a Labour government would ensure that any trade and customs deals with the EU allowed the sort of state aid he envisaged. He said he strongly believed in state-led intervention.
I do believe that state-led intervention will do a great deal to regenerate manufacturing industry. If you look at all the successful manufacturing economies around the world, all have grown on the basis - particularly Japan, for example - of a huge level of state support or state investment in those industries.
- He rejected suggestions that his policy amounted to “economic nationalism”. Asked about this in the Q&A, he said:
Are we promoting economic nationalism? No. What we’re promoting is an investment in manufacturing in this country and investment in industrial development in this country.
It’s not economic nationalism. It’s good sense to invest in the skills that we’ve already got her.
- He said the public sector pay increases announced today were not high enough and that, under the government plans, they would be funded by cuts. He said:
The reality is that, by lifting the pay cap, there is going to be an increase that is below the rate of inflation, and it is going to be about 0.8% below it. The unions are right that 5% is what is needed for it. We support that.
It is also important to understand that there is no increase in funding to the public sector for this, so by increasing pay levels, albeit by less than the rate of inflation, that can only be paid for by cuts within the public services. So, if it is local authorities or anybody else, they are going to have to pay for it by either removing their balances, which they shouldn’t be doing, or by cutting services further. So there has to be an increase in the amount of money paid into the public services in order to increase the pay.
The former Labour prime minister, Tony Blair, said this morning Britain needs a “new political coalition” to steer the country away from populism and offer policies which face up to the problems of the future. As the Press Association reports, Blair said the UK was “in a pretty bad place” because voters were being offered “two visions of the past” in a clash of left-wing and right-wing populisms. Speaking at the launch of the Resolution Foundation’s Living Standards Audit 2018 report (see 9.35am), he said that in a time of fear and pessimism in the wake of the financial crisis, too many politicians were trying to “ride the anger” of the public, rather than set out solutions to social problems and the challenges of technological change. He said:
We need to create a different policy agenda and construct out of that a new political coalition.
We need to become the change-makers but it has got to be change that corresponds to the modern world.
If it is not, we will end up with a fight between two kinds of populism, and out of that I fear the rightist populism will win and that will send us down a very dark path.
Scotland's Brexit bill could 'undermine credibility' of UK negotiation strategy, supreme court told
Brexit legislation passed by the Scottish devolved administration “cannot stand”, the UK’s highest court has heard. As the Press Association reports, the submission was made at the start of a challenge at the supreme court in London over the “competence” of the Scottish bill.
The EU exit legislation has been referred to the court by the attorney general and the advocate general for Scotland, the government’s senior law officers. The advocate general for Scotland, Lord Keen, told seven justices at the start of the two-day proceedings on Tuesday that their case was that “the Scottish bill as a whole cannot stand”. He told the panel, including supreme court president Lady Hale and deputy president Lord Reed, that the bill “impermissibly modifies” the UK Act on withdrawal from the EU. The UK bill was given royal assent on June 26 and became the European Union (Withdrawal) Act 2018.
As the Press Association reports, the law officers say in their written case before the justices that the Scottish bill was passed “without knowledge” of the outcome of negotiations between the UK government and the EU institutions and “pre-empts them”. They state:
The effect of what the Scottish Bill does is to make provision for the future relationship with the EU and EU law when that relationship is under negotiation.
They submit that this “could serve to undermine the credibility of the UK’s negotiation and implementation strategy in the eyes of the EU”.
Here is the written ministerial statement from Matt Hancock, the new health secretary, about the pay award for medical staff. It goes into considerable detail. “This is a pay rise that recognises the value and dedication of hardworking doctors and dentists, targeting pay as recommended by the DDRB [doctors and dentists remuneration body], and taking into account affordability and the prioritising of patient care,” Hancock says.
How teachers' pay award helps younger teachers most - Analysis
The news that many teachers in England are to receive a 3.5% pay rise - to be funded by extra cash coming from the Department for Education this year and next year - will be greeted with general approval but questions remain over who will benefit.
Today’s announcement by Damian Hinds gives a 3.5% pay rise to the unqualified pay range and main pay range, worth up to £1,366 a year for those teachers at the top of the main pay range. But the school teachers review body, which supplies independent advice to the DfE on pay, recommended a 3.5% across the board pay rise.
By restricting it to the main pay range and below, the benefits will be mainly felt by younger teachers. Meanwhile older, more experienced teachers and those in leadership roles on the upper pay scale will get a 1.5% to 2% pay rise - and it is a group that the government says it is most keen to retain in the profession, given the unusually youthful profile of teachers in England.
But the 3.5% headline figure allows Hinds to argue that “classroom teachers” will be the ones who benefit the most. In his statement Hinds makes this clear. He says:
As a result, classroom teachers will see the biggest benefit with starting salaries increasing between £803 and £1,004, and those at the top of the main pay range will be eligible for increases between £1,184 and £1,366.
Another question is where the additional funds of £500m over two years will come from, and how it will be allocated.
Hinds’ statement says:
We will be supporting schools in England to implement the award with an investment of £508m through a new teachers’ pay grant of £187m in 2018-19 and £321m in 2019-20 from the existing DfE budget. This will cover, in full, the difference between this award and the cost of the 1% award that schools would have anticipated under the previous public sector pay cap.
The grant will provide additional support to all maintained schools and academies, over and above the core funding that they receive through the national funding formula. We will publish further details on the distribution of this grant when the pay award is confirmed.
As for the source of the new money, the DfE says it will be from “unallocated resources,” rather than extra resources from the Treasury. That implies there are unlikely to be cuts to current programmes. But the DfE doesn’t have £500m down the back of the proverbial departmental sofa, even with a budget of tens of billions of pounds. So it will come from money that hasn’t been spent yet; the question is under what notional balance sheet entry it currently resides.
Q: What is your view on school funding?
Corbyn says schools are not being properly funded. It is “grim” for head teachers who have to consider that they can’t do. If schools are not funded properly, children are failed.
He says Labour would set up a national education service, and stop people having to pay fees for university or college.
He says he would not treat arts and culture as an add-on.
He says he is concerned there is an “over-competitive atmosphere within schools and between schools”. The pressure on pupils is enormous. He would like to see a much more inclusive approach to education. There will be more policy statements coming out in the autumn.
Education should be a time of “achievement and joy”, not stress, he says.
Q: Why have you not adopted the International Holocaust Remembrance Alliance definition of antisemitism in full?
Corbyn says Labour has accepted the IHRA definition. It has accepted most of the examples, he say, but it has added to them.
He says it should be right for people to debate the conduct of Israel, but not in an antisemitic way.
He says he is determined to live in a society where racism is behind us. He thinks multiculturalism is a strength, not a weakness.
And that’s it. Corbyn has finished.
I will post a summary soon.
Q: Don’t you have something in common with President Trump? In terms of manufacturing, don’t you both favour putting your country first?
Corbyn says no-one has ever said he has something in common with Donald Trump before.
(That’s not entirely true. See here, for example.)
He says the UK has gone from being a manufacturing economy to being a financial services economy. That is why the UK was so badly hit by the financial crash. He says he wants to change that.
He says it is about having confidence in often quite small and medium-sized enterpise.
It is not economic nationalism, he says. It is good sense to invest in firms that have potential.
Q: How would Labour invest in the armed forces?
Corbyn says he sees the armed forces as a resource that can be used to promote a more sustainable world.
It is important to address not just conflicts, but the causes of conflicts, he says.
Q: I’m not clear on your view on Brexit. You seem to be saying there could be benefits, but also that it could be a disaster.
Corbyn says there are many views in the Labour party on Brexit. There was a two thirds/one third division in favour of staying in amongst Labour supporters, he says.
He says you have to bring people together.
He says he is putting forward a plan for Brexit in the best interests of people.
Successful economies don’t charge people for their education, he says.
He says, if someone becomes a successful engineer, they will benefit. But he says he personally will benefit too, perhaps because they discover ways of making air cleaner.
Corbyn says government will use cuts to fund public sector pay increases
Jeremy Corbyn is now taking questions.
Q: What is your view on the public sector pay awards?
Corbyn says the pay increases will be less than inflation. He says he supports the trade unions in saying workers should get an award of about 5%.
He says the government has not allocated extra money for this. So these pay awards will have to be funded by cuts, or from reserves, he says.
He says Labour would fund its pay increases through growth and through higher taxes, he says.
- Corbyn says public sector pay increases will in practice be funded by cuts.
Q: Are you pushing for a harder Brexit than your supporters want so you are not bound by state aid rules?
Corbyn says state aid rules are somewhat flexible. He has criticised the UK government for interpreting EU state aid rules in an over-prescriptive way. He would try to negotiate with the EU for the UK to be allowed to operate a more generous state aid regime.
Q: Have your personally complained about what Margaret Hodge said to you? And do you agree with John Prescott about antisemitism not being a particular problem for Labour?
Corbyn says antisemitism is wrong. He says Labour is addressing it through its new code.
He says he thinks people should treat each other politely. He is not involved in disciplinary proceedings, and it would not be right for him to be involved in a case involving himself.
Updated
Here is an extract from the Jeremy Corbyn speech released overnight about keeping UK contracts in the UK. This is partly what my colleague Peter Walker was referring to in his tweets. (See 11.42pm.)
We have plenty of capacity to build train carriages in the UK and yet repeatedly over recent years these contracts have been farmed out abroad, costing our economy crucial investment, jobs for workers and tax revenues. If we want to reprogramme our economy so that it works for everybody, we must use powers we have to back good jobs and industry here.
Between 2014 and 2017, Network Rail awarded contracts worth tens of millions of pounds to companies outside of the UK, while the NHS awarded contracts worth over a billion. In the same period, the Ministry of Defence awarded contracts elsewhere worth over £1.5bn pounds, even though we are under no obligation, under either European or international law, to open up defence contracts to overseas bidders.
Labour is determined to see public contracts provide public benefit, using our money to nurture and grow our industries, our people and to expand our tax base. The next Labour government will bring contracts back in-house, ending the racket of outsourcing that has turned our public services into a cash cow for the few. And we will use the huge weight of the government’s purchasing power to support our workers and industries.
My colleague Peter Walker is listening to the Corbyn speech. He has posted these on Twitter.
This speech by Jeremy Corbyn on manufacturing is, at its core, a call for protectionism. It’s a left-leaning protectionism, but it’s still protectionism. Key element is keeping lots of public procurement contacts to UK companies.
— Peter Walker (@peterwalker99) July 24, 2018
The other point to note is that a lot of this - for all Corbyn’s protestations - probably couldn’t happen in the EU. As such he seems to be arguing for one benefit of Brexit (British public contracts for British firms)
— Peter Walker (@peterwalker99) July 24, 2018
There will be two urgent questions today.
Very busy day today in the House of Commons pic.twitter.com/NXIWbDaRVN
— Labour Whips (@labourwhips) July 24, 2018
This means Dominic Raab, the Brexit secretary, won’t get to start his statement until about 1.30pm. But he is due at the Brexit committee at 2pm. They might postpone, or they might start without him. I’ll try to clarify.
Jeremy Corbyn is giving his “Build it in Britain” speech now. There is a live feed here.
We previewed the speech overnight. I will post a summary when I’ve seen the full text, but Corbyn is due to do a Q&A afterwards, and I will cover that live.
1m public sector workers to get 'biggest pay rise in almost 10 years', but funded from existing budgets, Treasury says
The Treasury has now issued a press notice with details of all the pay awards being announced today.
Here is an extract.
Around one million public sector workers are set to benefit from the biggest pay rise in almost 10 years, the government announced today. The 1% cap ended last year in recognition that dedicated public sector workers deserve a pay rise.
A balanced approach to the economy means that today’s increases are affordable within government spending plans:
- members of the armed forces will receive a well-above inflation increase of 2.9% (2% consolidated, 0.9% non-consolidated), with today’s award worth £680 in pay to an average soldier, plus a one-off payment of £300
- the teachers’ award means the main pay range will increase by 3.5% (2% to upper pay range and 1.5% to leadership). Schools will determine how it is set
- all prison officers will get at least a 2.75% (2% consolidated, 0.75% non-consolidated) increase this year, with many getting higher awards
- a police award of 2% (all consolidated) will mean average pay for a Constable will now be more than £38,600 per year
- a pay increase of at least 2% for junior doctors, specialist doctors, GPs and dentists. Consultants will also get a pay rise of at least £1,150 (From October 2018: 2% for dentists and junior doctors consolidated / 1.5% consolidated for consultants with an additional 0.5% targeted at performance pay / 3% consolidated pay rise for specialty (SAS) doctors / backdated to April 2018: 2% for GPs consolidated, with an additional 1% potentially available from April 2019 subject to contract reform)
This follows the 6.5% pay rise over three years that was announced in March for more than a million nurses, midwives and other Agenda for Change staff, in return for modernisation of terms and conditions.
The Treasury press release also says towards the end (where often the most important bit is buried) that “today’s increases are funded from departmental budgets”.
That means, in many cases, cuts may have to be made to fund them.
Teachers to get 3.5% pay increase
Here is the schools announcement. It is mostly about school funding, but the written ministerial statement from the schools minister Nick Gibb includes this paragraph.
Today the secretary of state has also confirmed the 2018 teachers’ pay award. To ensure that this is fully affordable to schools, we will be providing a teachers’ pay grant of £187 million in 2018-19 and £321 million to all schools in England in 2019-20. This will cover, in full, the difference between this award and the cost of the 1% award that schools would have anticipated under the previous public sector pay cap. The grant will provide additional support to all maintained schools and academies, over and above the core funding that they receive through the national funding formula.
And these are from my colleague Richard Adams.
Damian Hinds statement on teachers' pay in England: +3.5% for main pay range, 2% for upper pay range and 1.5% for leadership
— Richard Adams (@RichardA) July 24, 2018
DfE: "In cash terms, teachers could receive a boost of between £1,184 and £1,366 to their salary, while salaries for new teachers will increase by between £802 and £1003."
— Richard Adams (@RichardA) July 24, 2018
The BBC’s Norman Smith has this on the pay award for teachers.
All main scale teachers to get 3.5% pay increase.
— norman smith (@BBCNormanS) July 24, 2018
Pay rise for teachers will not come out of school budgets. Will be funded centrally by @educationgovuk
— norman smith (@BBCNormanS) July 24, 2018
And this is from ITV’s Carl Dinnen.
Nick Gibb on teachers pay funding;
— Carl Dinnen (@carldinnen) July 24, 2018
"we will be providing a teachers’ pay grant of £187 million in 2018-19 and £321 million to all schools in England in 2019-20. This will cover, in full, the difference between this award and the cost of the 1% award"
I will post a link to the announcement when one is available.
Armed forces get 2% pay rise, plus top-up, as MoD accepts pay review proposal in 'spirit' but not in full
Gavin Williamson, the defence secretary, has announced a 2% pay increase for the armed forces, with an extra one-off payment so that the government recognises “the spirit” of the recommendation from the armed forces pay review body.
Here is an extract from the written ministerial statement just out.
The armed forces’ pay review body (AFPRB) has made its recommendation for the 2018-19 pay award of 2.9%. We are accepting the spirit of this recommendation with a 2% increase to pay (implemented in September salaries, backdated to 1 April 2018) and, in addition, a 0.9% non-consolidated one-off payment (implemented later in the year, also back dated to 1 April 2018).
Today’s pay award will deliver an annual increase to starting salaries of £520 for an officer and £370 for a newly trained solider, sailor or airman or woman. This is in addition to the non-contributory pension and access to incremental pay progression.
The AFPRB has also made recommendations on rises and changes to other targeted forms of remuneration, and on increases to food and accommodation charges, which have been accepted. Where applicable, these rate changes will also be backdated to 1 April 2018.
Having the 0.9% as a one-off payment means that, in the short term, service personnel are getting the equivalent of the 2.9% recommendation. But it won’t be added to be baseline, and so it is not something that service personnel will benefit from over the long term.
Currently inflation on the CPI rate is running at 2.4%, or at 2.3% on the CPIH rate (taking into account housing costs.)
Updated
We’ve got two oral statements in the Commons today.
Two oral statements today:
— Labour Whips (@labourwhips) July 24, 2018
1) Legislating for the withdrawal agreement between the UK and the EU – Rabb
2) Immigration detention – Shaw Review – Javid
The Government know that their public sector pay deal is so weak that they refuse to come and make an oral statement on it
In a written ministerial statement, the Ministry of Defence has announced that it is extending the educational support fund - a fund that allows schools to provide extra pastoral care to the children of service personnel affected by having a parent absent on tour, or by frequent family moves - for two years, at a cost of £5m.
Parliament has an e-petition process under which any petition attracting more than 100,000 signatures can normally expect to be debated in parliament. Under the Lisbon treaty the EU has something similar (one of the byproducts of Brexit is that some of us are learning much more about the EU than we ever knew before) and if an online petition attracts 1m signatures over a year, from at least seven member states, the European commission has to consider the proposal seriously.
Campaigners are using the process to try to persuade the EU to let Britons keep EU citizenship after Brexit. The campaign has just been registered and is due to open for signatures soon. There are details here.
The business department has “announced” (but not yet actually published, as far as I can see) its national security and investment white paper this morning in a statement. As we reported in an overnight story, the white paper will contain plans to allow ministers to to block foreign takeovers across all sectors of the British economy on national security grounds.
Updated
Frances Crook, chief executive of the Howard League for Penal Reform, says she intends to take legal action against Sajid Javid, the home secretary, over his decision to accept the death penalty as an option for two former British jihadists facing trial in the US.
I am starting the process of @TheHowardLeague taking legal action against Sajid Javid on the death penalty. Please watch this space.
— Frances Crook (@francescrook) July 24, 2018
On the Today programme this morning David Gauke, the justice secretary, said that prison officers would be among the public sector workers receiving a pay rise. He told the programme:
There will be additional pay for prison officers. In terms of the funding for that, we need to make sure we can deliver within a reasonable way and we will be setting out more in due course.
Income growth minimal, and going backwards for millions of poorer families, says thinktank
On what will be a busy day in the Commons, the last sitting day before the summer recess, the government is due to announce pay rises for some public sector workers, with increases going beyond the 1% cap that has been in place for some years. The announcement comes as the Resolution Foundation, a thinktank specialising in the concerns of those on low and middle incomes, publishes its Living Standards Audit 2018 (pdf), which says real income growth is minimal, with a third of families (that’s many millions) getting poorer.
Here is the Resolution Foundation’s summary. And here is the key extract from the report.
Inflation continued to rise in 2017-18, with the arrival of the full effect of the post-referendum devaluation meaning CPIH [consumer price inflation including housing costs] inflation peaked at 2.8 per cent in late 2017. As a result, average real wages fell – hindered by low nominal pay growth that has not topped 3 per cent since January 2009 and by low productivity growth. And, while the purchasing power of many people’s wages was hit hard by high inflation, this was all the more true of working-age benefits like tax credits and child benefit which are frozen in cash terms until April 2020.
Bringing these factors together, our nowcast suggests that typical incomes increased by just 0.9 per cent (after housing costs) in 2017-18. This is weak, representing less than half the average annual growth rate recorded between 1994 and 2007, and separate statistics from the ONS and Bank of England also point to poor growth.
Yet this figure for the median appears to be as good as it gets across the income distribution. The combination of a benefit freeze and above-target inflation means real household incomes fell for much of the bottom half of the income distribution in our estimate. Such a hit to living standards is clearly worrying, particularly coming so soon after the last recession. And incomes in the top half are estimated to have grown by only around 0.4 per cent.
In the near-term then, we appear to have a picture of generalised stagnation for many, with lower income households actually going backwards.
This chart explains the situation quite well. The blue line shows whether, on average, people had a pay rise. The brown lines show whether it actually amounted to one in real terms. When the brown lines dip below the 0% line, people are feeling poorer.
There are more details here in Philip Inman’s overnight story.
Here is the agenda for the day.
10am: Penny Mordaunt, the international development secretary, speaks at the Global Disability Summit in London.
10.30am: The supreme court starts hearing a challenge from the UK government about the legality of Brexit legislation passed by the Scottish parliament.
11am: Jeremy Corbyn gives a speech in Birmingham. As my colleague Pippa Crerar reports, Corbyn will accuse the government of selling out manufacturers by failing to introduce an industrial plan that could have helped them make more of the weak pound since the Brexit referendum.
11.30am: Matt Hancock, the new health secretary, takes questions in the Commons.
11.30am: Theresa May meets the Emir of Qatar in Downing Street.
12.30pm: Dominic Raab, the Brexit secretary, is expected to make a statement in the Commons about the white paper on the withdrawal agreement and implementation bill being published today.
After 1.30pm: MPs vote on a motion to suspend the DUP MP Ian Paisley from the Commons for 30 sitting days.
2pm: Raab and Olly Robbins, the prime minister’s chief Brexit adviser, give evidence to the Commons Brexit committee.
It is the last day before the summer recess and, as is customary, we’re getting a large number of written ministerial statements (21), some of which will probably contain news the government is keen to “bury” on a busy day. Some will also cover pay rises for public sector workers.
As usual, I will also 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 the end of the day.
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’s 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.
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