Afternoon summary
- The CBI and the TUC have issued a joint statement urging the government to unilaterally guarantee that EU nationals will be able to stay in the UK after Brexit. They say the uncertainty facing the 4m EU nationals in the UK and Britons living on the continent has become “intolerable” and that these people need reassurance now in case the Brexit talks end without a deal. (See 2.11pm.)
That’s all from me for today.
Thanks for the comments.
Updated
A slight tremor at the department for education as the long-serving education minister in the Lords, John Nash, steps down, to be replaced by the newly-enobled businessman Theodore Agnew.
Although the role is officially that of parliamentary under-secretary of state, Nash’s job was that of minister for academies, after being appointed by Michael Gove back in 2013. It’s a like-for-like swap: Nash was a Conservative party donor who founded a chain of academy schools; likewise Agnew is a Tory party donor who founded a chain of academies and free schools - in Agnew’s case the Inspiration Trust in Norfolk.
Agnew takes over a tricky brief, with multi-academy trust governance under strain amid a growing suspicion that the DfE has failed to build a system that can scale up. As more schools have become self-governing academies, the number of DfE staff devoted to fire-fighting has multiplied.
The teaching unions are among the more suspicious, with the National Education Union (the merged NUT-ATL) saying that Agnew “will be dogged by the same issues as his predecessor over the future of this directionless policy. Every week brings news of a new financial scandal or collapse of a previously celebrated academy chain.”
The Lib Dems’ education shadow Layla Moran says that Agnew “must make guarantees that his own personal involvement in the free school movement will not stop him from being impartial when looking at the evidence of the many problems with the delivery of this programme.”
As Daniel Boffey, Jennifer Rankin and Lisa O’Carroll report, the European parliament has drawn up a resolution, to be voted on next Tuesday, saying there is clear evidence that EU nationals are being treated unfairly in the UK and that Britons in mainland Europe are also suffering. They report:
“Recent administrative incidents have demonstrated that discrimination against citizens of the EU27 in the United Kingdom and UK citizens in the EU27 is already taking place and is having an impact on the daily lives of the citizens concerned, limiting the effective exercise of their rights,” the document says.
The resolution also attacks the British government’s handling of the Brexit negotiations and claims that for May to live up to her pledge that there will be no physical infrastructure at the Irish border after Brexit, the province of Northern Ireland will have to stay in the customs union.
The European parliament will have the right to veto any agreement between the EU and the UK. Barnier meets its Brexit steering committee almost weekly.
Strong language is used in the nine-page resolution about Britain’s positions, including what it describes as a failure to provide concrete proposals on the financial settlement. The draft resolution says that “so far the absence of any clear proposals has seriously impeded the negotiations”.
You can read the resolution in full here (pdf).
Richard Leonard, the Scottish Labour leadership contender backed by Jeremy Corbyn supporters, has chastised members of his own team and those of his rival Anas Sarwar after a bruising spat between the two camps.
Leonard urged his supporters to “conduct the campaign in a spirit of comradeship” and “as the proponents of hope and change” after both sides exchanged abuse and counter-accusations against each other on Wednesday.
The dispute erupted after Alex Rowley, Scottish Labour’s interim leader, was recorded telling delegates at Labour conference in Brighton that he backed Leonard and that left-wingers in the Scottish party had long wanted to replace Kezia Dugdale, who stood down suddenly last month.
The dispute, which erupted while Corbyn was commending Scottish Labour for its unity in his conference speech, has vented long-standing tensions between the party’s centrists and its Corbynites over policy and their loyalty to the UK leader.
In a transcript published in full by the Sun, Rowley told two delegates: “Although I’m neutral in the leadership, I believed that Richard Leonard has everything that we need to win in 2021.”
Rowley’s neutrality as acting leader was questioned after he appeared to set up Sarwar up for ridicule by Nicola Sturgeon at first minister’s questions last week over Sarwar’s use of private schools for his kids and his family firm’s decision to pay its staff the minimum wage.
Rowley cited Labour’s catchphrase “the many not the few” in an exchange with Sturgeon on child poverty and taxing the rich. Rowley’s daughter Danielle Rowley, the newly-elected Labour MP for Midlothian, is Leonard’s campaign manager.
Jackie Baillie, one of Labour’s most senior MSP and a close ally of Sarwar’s, accused Rowley of hypocrisy over his remarks in Brighton since they proved the left was secretly plotting against Dugdale while publicly demanding loyalty to Corbyn. In retaliation, Leonard’s press officer Stephen Low, a Unison official, sent out a press release referring to Baillie’s remarks as “pish” – the Scots vernacular for piss.
The dispute has unnerved Leonard’s camp as it allows Sarwar’s allies to present Rowley’s remarks as evidence of leftwing disloyalty and factionalism to Scottish Labour’s 22,000 members and the 11,500 or so affiliates and registered members.
Until now, Sarwar had lost significant momentum in the attacks on his private schooling, his £20,000 a year income from shares in the family firm and the company’s lack of unionisation.
In a long statement, Leonard said:
There is no place in this campaign for making unfounded allegations about colleagues and fellow party members, for any abuse including online, or for that matter using language that lowers the tone.
I make clear to my supporters that we are conducting this campaign as the proponents of hope and change, and not the old way of doing things, and that starts with my campaign itself – where there is no place for the kind of language we saw yesterday [...]
I call on everyone in Scottish Labour to conduct this leadership election in a way that strengthens rather than weakens the unity and effectiveness of our party. Each candidate’s team must work towards this objective.
Lords committee publishes plan for giving parliament more say over EU withdrawal bill Henry VIII powers
A House of Lords committee has released a report saying the EU withdrawal bill gives ministers “unacceptably-wide” law making powers. The delegated powers and regulatory reform committee proposes a number of changes to the bill, including proposing that MPs and peers should be able to force a vote on significant secondary legislation being introduced under the bill.
The bill will give ministers so-called Henry VIII powers to amend primary legislation using secondary legislation on matters relating to Brexit. There are different methods of scrutinising secondary legislation in parliament. The most important measures go through the affirmative procedure, which means MPs and peers have to vote in favour for them to become law. But much secondary legislation goes through the negative procedure, which means it automatically becomes law unless either the Commons or Lords votes it down. Since it is up to the government to decide if a vote takes place, negative procedure secondary legislation almost never gets blocked.
The Lords committee says, if ministers want to use the negative procedure to pass secondary legislation under the bill, “a committee of each House, or a joint committee of both Houses, should be given 10 days to overturn the minister’s proposal and upgrade scrutiny to the affirmative procedure.”
Commenting on the proposal, Lord Blencathra, the Conservative former minister who chairs the committee, said:
The European Union (withdrawal) bill is one of the most important bills in the constitutional history of the UK, and it seeks to confer on ministers an extensive range of powers, unique in peace-time.
We have put forward what we think is a sensible proposal which will enable the government to use secondary legislation to implement the decision to withdraw from the EU whilst ensuring that it is parliament – not the government – which decides the level of scrutiny applied to that legislation.
MPs will get the chance to amend the bill during its committee stage later in the autumn, and it is likely that amendments creating a sifting mechanism of the sort proposed by the Lords committee will get enough support to pass.
CBI and TUC jointly urge government to unilaterally guarantee right of EU nationals
In an unusual move the CBI and the TUC have issued a joint statement about Brexit. It is about the rights of EU nationals living in the UK. With speculation continuing that the UK could end up leaving the EU with no deal, they are both demanding an assurances that the EU nationals will be allowed to stay regardless of what else is agreed, or not agreed, in Brussels.
In the statement Carolyn Fairbairn, the CBI director general, and Frances O’Grady, the TUC general secretary, say:
After 15 months of human poker, the uncertainty facing 4m European and UK citizens has become intolerable.
It is a blight on the values of our nations. Millions of workers and thousands of firms are today united in their call to leaders on both sides to find an urgent solution. A clear guarantee of the right to remain for citizens in both the UK and EU27 is needed within weeks.
EU citizens account for 10% of registered doctors and 4% of registered nurses across the UK. Millions more work in the public and private sectors delivering public services and making a vital contribution to our economy.
They need to hear that they will be allowed to remain in the UK, whatever the eventual outcome of negotiations. Not only is this important for our economy, it is the right thing to do.
Once agreed, this guarantee must be implemented independently of the rest of the negotiations to avoid the risk that ‘no deal’ in March 2019 leads to uncertainty and heartache for millions of people.
A unilateral guarantee that EU nationals will be allowed to stay in the UK, regardless of what happens in the Brexit talks, is a longstanding Labour party demand too.
Campaigners for EU citizens’ rights said there were some “really positive” agreements in the 4th round of talks.
In particular, it welcomes the EU agreement to Theresa May’s proposal that they could have their right to retain their rights written into the withdrawal agreement.
That will give the law “direct effect”, allowing EU citizens to challenge any future attempt to tinker with their rights in the British courts.
“The direct effect is really welcome. I think it is really positive because it will mean if there any attempt to change our rights by a future government, or the Home Office, we will be able to challenge in in the UK courts,” said Nicolas Hatton, the co-chair of the3million.
British in Europe, which represents 10 groups of British nationals living on the continent has also welcomed Davis’s declaration they they would have a lifetime “right to return” to the UK.
They had voiced concern that those who had settled abroad would be restricted in their ability to return to the UK in future to look after sick relatives for example.
The3million are still pushing for the UK courts to be able to refer disputes over their legacy rights to the ECJ in future, something Michel Barnier described as a continuing “stumbling block”.
Rona Fairhead appointed international trade minister
Downing Street has announced that two business figures are being given peerages and made unpaid government ministers.
Rona Fairhead, the former Financial Times chief executive and former chair of the BBC Trust, is being made a minister of state for international trade.
And Sir Theodore Agnew, a businessman and founder of a trust that runs academies, is being made a junior education minister.
Updated
David Davis's press conference with Michel Barnier - Summary and analysis
Here are the main points from the press conference with David Davis, the Brexit secretary, and Michel Barnier, the EU’s chief Brexit negotiator.
On the negotiations overall
- Barnier said it could take “months” before the EU agrees to move the Brexit talks to phase two, where the UK’s future trade relationship with the EU will be discussed. The EU wants the talks to move on as soon as possible. Originally it was hoped that the move to phase two might take place after a summit of EU leaders towards the end of next month but that now looks unlikely. (See 12.13pm.)
- Davis gave an overall assessment of this weeks talks that was notably more upbeat than Barnier’s. Davis said in his opening remarks.
I believe that thanks to the constructive and determined manner with which both sides have conducted these negotiations we are making decisive steps forward.
But Barnier said in his opening remarks:
We managed to create clarity on some points. On others, however, more work remains to be done. We are not there yet.
Rights of EU citizens
- Davis said the UK had agreed that the withdrawal agreement, giving rights to EU nationals, would have “direct effect” in UK law.
We must also acknowledge that a major question remains open between us – it relates to the enforcement of citizens rights after we leave the European Union.
The UK has been clear that, as a third country outside of the European Union, it would not be right for this role to be performed by the European court of justice.
But we have listened to the concerns that have been raised – and as a direct result of hearing those concerns the United Kingdom has committed to incorporating the final withdrawal agreement fully into UK law. Direct effect if you like.
We also recognise the need to ensure the consistent interpretation of EU law concepts.
We have not agreed the right mechanism for doing this yet but discussions this week have again been productive.
During the Q&A Davis said there would be nothing unusual about this.
We accept, and have done from the start, that there is a need for certainty for them [EU nationals]. That’s what we are aiming to produce, without allowing the European court of justice to make rulings within and on cases in the UK. And this is the compromise we are working towards.
It is not unusual. There are plenty of arrangements where we have treaties that confine what the United Kingdom [can] do - very specific, with very real aims. And that’s what we are doing here.
Barnier welcomed this, saying that agreeing “direct effect” was very important. He said:
It will give the assurance to our citizens that they will be able to invoke their rights, as defined by the withdrawal agreement, before UK courts. We agreed to guarantee - for the citizens concerned - that the UK will apply EU law concepts in a manner that is consistent with EU law after Brexit.
- But Barnier also renewed his call for the European court of justice to play a role in guaranteeing the rights of EU nationals after Brexit. He said:
We failed to agree that the European court of justice must play an indispensable role in ensuring this consistency. This is a stumbling block for the EU.
- Barnier said a “big gap” remained between the EU and the UK on the issue of family reunification (what happens if an EU national living in the UK after Brexit wants a relative to move there too) and that there were other issues to be resolved too. He said:
There are others [areas of disagreement]. 1) A big gap remains between our positions on family reunification. We want existing rights to continue for the citizens concerned. 2) The export of social security benefits also remains to be discussed. 3) Citizens need simplified administrative procedures. The UK stated its intention to put in place a streamlined system.
- Davis said the UK has decided that EU nationals with permanent residency documents will not have to go through a full application process all over again to be allowed to stay in the UK after Brexit. He said:
We have provided further reassurance on how European Union citizens will be able to apply for a new status, once we leave.
And we know that those already holding permanent residency documents should not have to go through the full process.
So we presented early thinking on detailed processes and plans on how we might ensure this does not happen.
- Davis said the UK had offered “guaranteed rights of return for settled EU citizens in the UK”. This means they can leave the UK for a period without losing the right to come back. In his opening statement he said:
The United Kingdom thinks that in some cases we must go beyond the strict requirements of current EU law in order to protect citizens. For example we have offered the European Union guaranteed rights of return for settled EU citizens in the UK, in return for onward movement rights, right for onward movement, for our UK nationals who currently live within the EU27.
Money
- Barnier implied that Theresa May’s offer in her Florence speech to make contributions to the EU after Brexit did not go far enough. In his opening remarks he said:
Prime Minister May said two things in Florence. First: that no member state should pay more; and no member state should receive less because of Brexit. Second, that the UK will honour commitments taken during its membership.
This week, the UK negotiating team made clear that applying the first principle would be limited to 2019-2020.
The UK explained also that it is not in a position yet to identify its commitments taken during membership.
For the EU, the only way to reach sufficient progress is that all commitments undertaken at 28 are honoured at 28.
During the Q&A he repeated the point about commitment made by the EU28 having to be honoured by the EU28.
Barnier’s opening comment implied that the UK was somehow watering down the commitment made in May’s speech, because he suggested that the EU had only just been told May’s ‘no state should have to pay more or receive less’ promise only applied up to 2020. But May actually made this clear in her speech. She said: “I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan [which lasts until 2020] as a result of our decision to leave.” (My italics.) Barnier is overstating what May actually promised.
- Barnier ruled out linking a deal over the UK’s payments to the EU with an understanding on the future trade relationship. The British government does not want to commit itself to paying a sum to the EU until it has an assurance about the free trade deal it will get. But Barnier said there was “no possible link” between the two. (See 11.42am.)
- Davis said that, although May has said the UK will honour its commitments to the EU, it was “not yet at the stage of specifying exactly what these commitments are”.
- He also said the final agreement on money would be “a political agreement”, implying that it will not simply by settled by lawyers and accountants. That may have been a signal that the UK will pay more than it thinks it legally owes.
Ireland
- Davis said both sides had this week started drafting joint principles on preserving the common travel area.
Euratom
- Davis said both sides were “close” to reaching agreement on “the vast majority” of issues set out in their positions papers on Euratom.
Updated
Here is some Twitter comment on the press conference.
From AFP’s Danny Kemp
Barnier definitely rained on the parade there. 'Weeks or months' to sufficient progress, and 'no possible link' betw bill and trade talks
— Danny Kemp (@dannyctkemp) September 28, 2017
From ZDF’s Stefan Leifert
Brexit in Zitaten. Barnier (Brüssel): "Haben keinen ausreichenden Fortschritt." Davis (London): "Haben erheblichen Fortschritt erzielt."
— Stefan Leifert (@StefanLeifert) September 28, 2017
Brexit in quotes. Barnier (Brussels): “have no sufficient progress.” Davis (London): “have made substantial progress.”
From BuzzFeed’s Alberto Nardelli
Clear from Barnier/Davis presser there have been important steps fwd, May speech helped (also in terms of tone), but pending issues are big
— Alberto Nardelli (@AlbertoNardelli) September 28, 2017
Barnier says EU could be 'months' away from moving talks to phase two - Full quote
Here is the key quote from Michel Barnier about how it could take “months” until the Brexit talks are ready to move on to phase two, the part dealing with the UK’s future relationship with the EU. Currently the talks are still in phase one, dealing with withdrawal issues: the rights of EU citizens, the financial settlement and Ireland.
Barnier said:
I think it’s positive that Theresa May’s speech made it possible to unblock the situation, to some extent, and give a new dynamic to the situation. But we are far from being at a stage - it will take weeks, or maybe even months - where we will be able to say ‘Yes, okay, there has been sufficient progress on the principles of this orderly withdrawal.’
And that’s it. The press conference is over.
I will post a summary soon.
Q: The UK says it can only agree the financial contribution when the UK’s future relationship with the EU is clarified. Do you accept that?
Barnier says May’s speech helped to clarify things.
It was very useful to hear her say that no EU country would lose out up to 2020 because of the UK’s withdrawal.
She also said commitments would be honoured. He says he hopes to get clarification on this point.
He says he sees no logical and coherent link between discussing the new partnership and discussing the financial obligation. There is no “possible link” between that and the separation issues.
- Barnier rules out linking a deal on UK’s financial obligations to a deal on the future relationship. The two issues are not connected, he says.
Q: What does your plan on EU nationals mean? Which financial commitments will the UK honour?
On EU nationals, Davis says the plan is to allow UK courts to take into consideration EU law. There are many precedents for this.
On finances, he says he is not doing the negotiation here.
Q: We are told the UK may make concrete proposals on 9 October. If the UK does, will you ask EU leaders to adjust your mandate so you can debate the transition?
Barnier says the EU wants commitments entered into by the EU28 to be honoured by the EU28. It is as simple as that.
And, as soon as sufficient progress has been made, he will recommend to EU leaders that they move on to phase two.
He says EU leaders were not surprised by the request for a transition.
He says his mandate is very specific about the circumstances which will have to apply for this to be discussed. It will be in the second stage, he says.
Updated
Barnier says it may take “months” before EU will allow Brexit talks to move on to phase two
Q: Is this a real negotiation?
Davis says of course this is a proper negotiation.
Later today the government will publish a chart on EU nationals’ right showing where there is agreement and where there is still disagreement. Most areas in the chart will be green (ie, indicating that agreement has been reached.)
Q: Can you define “sufficent progress”?
Barnier says the UK decided to leave the EU. That was their decision.
There are complicated consequences as a result, he says.
So you should not be surprised that these negotiating rounds, which are all useful, sometimes have stumbling blocks, or that this takes time.
EU taxpayers should not have to pay the cost of decisions taken by the UK.
And the integrity of the single market must be protected, he says.
He says May’s speech “made it possible to unblock the situation, to some extent”.
But it could be “weeks or even months” before the EU can say enough progress has been made he says.
- Barnier says it may take “months” before EU will allow Brexit talks to move on to phase two.
Barnier says he looks forward to the resolution from the European parliament on the pace of Brexit talks.
He says the talks will pick up again in October.
(He does not commit himself to saying whether he will say that sufficient progress has been made for the talks to move on to phase two when EU leaders meet at the end of October.)
On the financial settlement, Barnier says the talks on this have been “useful”.
May said no member state would have to pay more, or lose out, because of Brexit, he says.
But the UK is saying that will only apply for 2019 and 2020 - the end of this EU budget round, he says.
And May said the UK would honour its commitments.
But the UK has not identified what those commitments are, he says.
He says the EU’s view is that all commitments taken by the EU28 (ie, with the UK) must be paid for by the EU28.
Updated
He says, on citizens’ rights, the UK has agreed to give “direct effect” to the withdrawal agreement.
This is very important, he says. It means EU citizens will be able to go to the UK courts to enforce their role.
And the UK has agreed that European court of judgement rulings will be taken into account by UK courts.
But the EU is still pressing for EU nationals to be able to take cases directly to the ECJ. This is still a point of dispute, he says.
He says they created clarity on some points.
On others, more work needs to be done, “and we are not there yet”.
But they will keep working til they get a deal, he says.
Michel Barnier is speaking now.
He says Theresa May’s speech last week has created a new dynamic in the negotiations.
He says he said on Monday they needed a moment of clarity.
Both teams have worked well together, he says.
Davis says the EU withdrawal agreement will be adopted in EU law. He says it will have “direct effect”.
He says EU citizens who have permanent residency documents will not have to go through the whole process of re-applying again.
He says the UK has held “very constructive” talks on the financial settlement. The UK will honour its obligations, he says.
He says the UK and the EU are close to an agreement on Euratom.
He says he leaves Brussels optimistic.
David Davis's press conference with Michel Barnier
David Davis, the Brexit secretary, and Michel Barnier, the EU’s chief Brexit negotiator, are holding their press conference now.
Davis says they are making “decisive” progress.
Theresa May's speech - Summary and snap analysis
Here are the main points from Theresa May’s speech. It was bold on analysis, but very thin on prescription.
- May said free market economics were currently “not delivering for ordinary working people”.
And those of us who believe that the interests of the British people are best served through a successful open, free market economy need to be honest about where it is not currently working or delivering for ordinary working people today.
This was probably the most interesting claim in the speech. But after making this point, she followed it with a long passage defending existing government policy in areas like banking, industrial policy, financial services, labour market reform and education. She mentioned the Taylor review (without saying which of its recommendations she would accept), and said too many young people don’t have the right skills, but she did not mention housing or low wages, and overall she did not really explain how the system might be changed to address the problem she identified.
- She said that the free market economy was “the greatest agent of collective human progress ever created”. She explained:
When countries make the transition from closed, restricted, centrally-planned economies to open, free market policies, the same things happen.
Life expectancy increases, and infant mortality falls.
Absolute poverty shrinks, and disposable income grows.
Access to education is widened, and rates of illiteracy plummet.
Participation in cultural life is extended, and more people have the chance to contribute.
It is in open, free market economies that technological breakthroughs are made which transform, improve and save lives.
It is in open, free market economies that personal freedoms and liberties find their surest protection.
A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created.
It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.
- She explained what she saw as the foundations of a free market economy.
In essence, it is very simple.
It consists of an open market place, in which everyone is free to participate…
…regulated under the rule of law…
…with personal freedoms, equality and human rights democratically guaranteed …
…and an accountable government, progressively taxing the economic activity which the market generates…
…to fund high-quality public services which are freely available to all citizens, according to need.
That is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country.
- She said those arguing for free market economics to be abandoned were wrong.
Now, some argue that a free market economy is an end in itself, and that drawing attention to the downsides is somehow anti-business.
Others would use the imbalances which are now apparent as a justification for the total rejection of the free market economy, which has done so much to improve our lives.
Instead they advocate ideologically extreme policies which have long-ago been shown to fail, and which are failing people today in places like Venezuela.
My argument has always been that if you want to preserve and improve a system which has delivered unparalleled benefits, you have to take seriously its faults and do all you can to address them.
Not to do so would put everything we have achieved together as a country at risk.
It would lead to a wider loss of faith in free markets, and risk a return to the failed ideologies of the past. A return to protectionism in international trade, and to inflationary policies at home.
Far from somehow protecting the poorest and most vulnerable in our society, that outcome would surely hurt them the most.
Although May did not mention Labour or Jeremy Corbyn, she was clearly referring to them here. But her claims were very generalised, and ignored the point that Corbyn is not calling for the entire abandonment of market economics (although he would not defend it in the terms May does). He is attacking what he describes as its neoliberal incarnation - deregulation, privatisation, and cuts to government spending. May said little to address the case Corbyn has been making on these points.
Updated
Here is Ed Balls, the Labour former shadow chancellor, on Theresa May’s speech.
I'm surprised by today's Theresa May speech. I'm all for open markets. But championing 'The Free Market' feels bad economics & bad politics
— Ed Balls (@edballs) September 28, 2017
May suggests UK could stop placing orders with Boeing if it persists with case against Bombardier
In the Q&A Theresa May was asked about Bombardier. Confirming comments made by government colleagues yesterday, she signalled that the UK could stop placing orders with Boeing if it did not drop its trade dispute with Bombardier, the aerospace company employing 4,000 people in Northern Ireland. She said:
What I would say in relation to Boeing is of course we have a long-term partnership with Boeing, various aspects of government, and this is not the sort of behaviour we expect from a long-term partner. It undermines that partnership.
Updated
Q: There were aspects of your speech that could have been made by a German chancellor. Will you rely on your relationship with Angela Merkel to help with Brexit.
May says her relationship with Merkel is important.
But her relationship with the 26 other EU leaders is also important.
She says the UK is not leaving Europe. It is leaving the EU. It wants an end solution that will benefit the UK and the EU.
And that’s it.
I will post a summary soon.
Updated
May says it is possible that some aspects of the Brexit transition, or “implementation”, could take less than two years to implement.
May's Q&A
Q: Low interest rates and QE have had a bad impact on poor people. What can be done about that?
May says she was pointing that out in her speech.
The government looks at what can be done to mitigate the impact of QE. For example, it has taken steps to help savers.
Q: Can you assure exporters that we are not about to have a trade war with the US?
May says more than 4,000 people are employed by Bombardier in Northern Ireland.
The American judgment was a preliminary one. She says she will continue to press on the Americans the importance of Bombardier. The UK government has a long-term partnership with Boeing. This is not the sort of action one would expect from a partner, she says.
- May says Boeing’s legal case against Bombardier is not the action the UK would expect from a partner. (That sounds like a possible veiled threat to stop buying Boeing planes, but that may be reading too much into it.)
She says the UK is a champion of free trade.
We need to ensure people are not left behind, she says.
She says element of protectionism are creeping in around the world
May is now wrapping up. She wishes the Bank well in the future, and for the rest of its conference.
She is now taking questions.
May says giving up the government’s “balanced” approach to public spending would mean more borrowing and higher taxes.
May says leaving the EU will mean changes.
She wants the UK to have a close economic partnership, but with rights and obligations in a new balance.
The challenge will be not how to align UK regulation and EU regulation; it will be what to do when they start to diverge.
May says some people are questioning the market economy.
May says if you want to deliver a system that delivers for everyone, you have to acknowledge its faults.
Giving up on market economics, far from helping poorest and most vulnerable, would harm them most, she says.
May says the flexible labour market has contributed to the UK’s success.
Many people value flexible work.
But it cannot be one-sided, she says. That is why she commissioned the Matthew Taylor report.
May says the government’s industrial strategy is promoting growth across the whole of the UK.
A financial services sector, providing jobs across the whole of the UK, is vital for the country’s prosperity, she says.
May says those who believe in free market economics have to be honest about where it is not working.
For too long, too many communities have not seen the benefits of prosperity.
That waste of potential is bad for the economy as a whole, she says.
May says raising the living standards and protecting the jobs of ordinary people is the main aim of economic policy.
May says it is in open, free market economies that new developments occur that save lifes.
And it is in open, free market economies that freedoms are guaranteed.
Theresa May's speech
Theresa May is speaking now.
She says she was a newly elected MP when the Bank of England was made independent.
She says many sacrifices were made after the crash.
But the system is not working for everyone, she says.
Carney says UK’s future prosperity will depend mostly on what kind of Brexit occurs, not on what the Bank does
Here are the main points from Mark Carney’s speech.
- Carney, the governor of the Bank of England, says the UK’s future prosperity will depend mostly on what kind of Brexit occurs, not on what the Bank does.
While carefully circumscribed independence is highly effective in delivering price and financial stability, it cannot deliver lasting prosperity and it cannot solve broader societal challenges. This bears emphasising because in recent years a host of issues have been laid at the door of the Bank of England from housing affordability to poor productivity.
Calls for the Bank to solve these challenges ignore the Bank’s carefully defined objectives. And they confuse independence with omnipotence.
Monetary and financial stability are foundational. They are necessary for prosperity but they aren’t sufficient to deliver it.
The biggest determinants of the UK’s medium-term prosperity will be the country’s new relationship with the EU and the reforms it catalyses. Most of the necessary adjustments are real in nature and therefore not in the gift of central bankers.
In other words, he’s saying: Don’t blame us if it all goes wrong ...
- He says Bank of England independence has been a success.
The gains from independence have been enormous. In the two decades that followed independence, inflation averaged just under 2% compared with over 6% in the preceding two. It’s been one-fifth as volatile. Crucially, independence allowed monetary policy to respond boldly and effectively to the biggest financial crisis in a century. And it leaves the Bank well placed to address a range of possible developments around Brexit.
Updated
Carney says price stability is “the best contribution monetary policy can make to the public good”.
He explains:
High inflation hurts the least well off in society the most. It distorts price signals, inhibits investment, and ultimately damages the economy’s productive capacity. Equally, deflation imperils growth and employment, and, in the extreme, leads to financial ruin and economic collapse.
The happy medium is low, stable and predictable inflation. A little inflation greases the wheels of the economy, and it gives monetary policy space to deliver better outcomes for jobs and growth when shocks hit.
Mark Carney, governor of the Bank of England, is opening the event at the Bank.
There is a live feed here.
Ed Balls, who was Gordon Brown’s chief adviser when the Bank of England was given independence (and how is credited with converting Brown to the idea in the first place), has written an interesting post about the anniversary of the announcement on his blog. It includes a link to the original draft of the letter to the Bank making the announcement, as well as to the revised final version.
Balls doesn’t go into full “I told you so” mode, but he does make the point that his original plan, which was amended before the final letter was sent, would have given the Bank more role in ensuring financial stability (and thereby in protecting the UK from the financial crash) than it ended up getting.
Balls writes:
It is clear from my draft that the deputy governor (financial regulation) was intended to play a vital role in macro-financial stability within the Bank, with ‘conduct’ regulation moved to a separate institution. As is well known, some senior figures at both the Treasury and the Bank wanted a more decisive break. And the final compromise evolved progressively, and problematically, over the following decade as the Bank’s engagement in financial stability steadily eroded.
And the Independent’s John Rentoul (who is not a Corbyn supporter) has written a blog at the Independent saying the very fact that Theresa May is giving this speech this morning shows that Jeremy Corbyn is setting the agenda. She is “paying Jeremy Corbyn the compliment of taking him seriously”, he writes.
Theresa May’s defence of capitalism proves Jeremy Corbyn is winning: me for @IndyVoices https://t.co/mEINzsG7Ms
— John Rentoul (@JohnRentoul) September 28, 2017
Paul Mason, the Corbyn-supporting Guardian columnist, points out that Theresa May is speaking at an institution nationalised by Labour.
Theresa May's speech about free market capitalism will be made in a bank nationalised by Labour #forthemany Its ours. We the people own it.
— Paul Mason (@paulmasonnews) September 28, 2017
He could, of course, have pointed out as well that Bank of England independence was a Labour achievement. It was Gordon Brown’s first key decision when he became chancellor in 1997.
In her speech Theresa May will also promise a “balanced” approach to public spending. According to the extracts released in advance, she will say:
That means continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs.
At the same time, it means investing in our vital public services, like schools and hospitals, which our successful management of the economy has made possible.
To abandon that balanced approach with unfunded borrowing and significantly higher levels of taxation would damage our economy, threaten jobs, and hurt working people.
Ultimately, that would mean less money for the public services we all rely on.
At the Labour conference yesterday Jeremy Corbyn argued that the neoliberal economic model was broken. This morning, in a speech at a conference to mark the 20th anniversary of the Bank of England getting independence, Theresa May will hit back with a strong defence of the free market system.
According to extracts released in advance, she will say:
A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created.
It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.
It is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country.
And we should never forget that raising the living standards, and protecting the jobs, of ordinary working people is the central aim of all economic policy.
Helping each generation to live longer, fuller, more secure lives than the one which went before them.
Not serving an abstract doctrine or an ideological concept – but serving the real interests of the British people.
(Corbyn’s speech yesterday focused on what he said were the flaws with neoliberalism, a particular government approach to free markets. He was not arguing that the free market is always inherently bad, although it is hard to imagine him defending free market economics in the terms May is using today.)
Here is Larry Elliott’s preview story.
Theresa May is speaking at 9am. I will be covering it in full.
Then later, at around 11am, David Davis, the Brexit secretary, and Michel Barnier, the EU’s chief Brexit negotiator, hold a press conference in Brussels after the conclusion of the fourth round of Brexit talks.
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’s Playbook. 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
