1. SUITS YOU, SIR?
The full Cabinet meets today and – 18 months after the UK’s historic ‘Leave’ vote - every senior minister finally gets to say what they think the ‘end state’ of Brexit should look like. But here’s a spoiler alert: judging by yesterday’s Cabinet sub-committee warm-up, they may all back a ‘bespoke Brexit’.
The PM seized on remarks by Michel Barnier’s staffer Stefaan de Rynck yesterday that ‘each free trade agreement is tailor-made’. Yet as May herself admitted, that’s a statement of the bleeding obvious, as each bilateral agreement reflects national economic priorities (the EU-South Korea deal is dubbed ‘cheese-for-cars’). What she didn’t quote was de Rynck’s brutal verdict that the EU can’t let the UK have a special trade deal on services. Asked about David Davis’s hopes for a ‘Canada-plus-plus-plus’ deal, he said: “To come back to the mathematics of pluses and minuses, what you cannot do is square an FTA circle into a single market. And that is one of the key issues that we will have to live with and clarify quickly: There can be no sector-by-sector participation in the single market.”
This morning, Barnier himself tells the Guardian (and some other European papers) there can be no deal on financial services if Britain leaves the EU’s single market. “There is not a single trade agreement that is open to financial services. It doesn’t exist,” Barnier said. He added: “In leaving the single market, they lose the financial services passport.” The real choice is not between a bespoke or off-the-peg model, it’s between a limited (Canada-style) deal and a comprehensive one (like EFTA membership). And DD still thinks some states in the EU27 back his idea of a goods-and-services deal.
Yet despite all those warnings, the big political news is that ex-Remainers like Philip Hammond, Amber Rudd and Greg Clark yesterday signalled in the Cabinet sub-committee that they would go along with Canada-plus demand. The FT’s George Parker has an excellent read-out, reporting the Chancellor supported May’s call for an ‘ambitious’ trade deal that still allowed regulatory divergence. This is the very ‘cake and eat it’ Brexit that Hammond has ridiculed in the past, but it seems he doesn’t want to rock the boat, or not yet at least. “The prime minister said we should begin the negotiations by aiming high,” one source said. Maybe that’s what set the tone. I’m told the ex-Remainers did put on record the risks to jobs from diverging from EU rules, yet they seem to be hoping that a promise of a ‘gradual’ divergence (after a ‘status quo’ two-year transition) will be enough to maintain Cabinet unity. Note that the 10-strong sub-committee has a 5-4 majority for Brexit (Leavers: DD, Fox, Gove, Johnson, Williamson; Remainers: Green, Hammond, Rudd, Clark) with the PM as chair. Full Cabinet has a majority of ex-Remainers.
The PM is certainly very keen to heal the Brexit splits of the past week, though she was yesterday very reluctant to criticise the Daily Mail or Daily Telegraph front page attacks on ‘Remainer rebels’. Anna Soubry presented the Speaker with a dossier linking death threats to the two papers’ coverage. Amber Rudd paid tribute to Soubry, and pointedly heaped praise on Antoinette Sandbach after she hit back at Nadine Dorries’s calls for deselection. May will hope her ‘bespoke Brexit’ plan keeps the Cabinet together today. But many of those backbench rebels agree with Brussels that the DD model will fall apart at the seams. And they hope their allies in Cabinet have the guts to say it at some point.
2. GREEN GOVE-RNMENT
Michael Gove is leading the Tory fight to burnish the party’s credentials on animal welfare (after that fake news about ‘sentience’) and more broadly on environmental policy. In the Mail and the Times the Environment Secretary continues his war on plastic waste, with new plans to try to end the postcode lottery operated on council recycling. It does indeed seem daft that different areas have different rules, though many say that comes down to cost.
Gove also won plaudits recently for backing a ban on bee-harmful pesticides (ditching predecessor Owen Paterson’s policy). Yet we have a new poll today by GQR that shows the public want the Government to go even further and ensure the UK keeps current EU rules on all pesticides post-Brexit. Some in the farming lobby think Brussels curbs are restrictive, but find even Leave voters are very keen on maintaining protections and extending bans, not watering them down. Like GM crops, this is an area where the UK may not be able to please both the EU and the US, but is there a third way?
One area where Gove’s passion for Brexit looks politically tricky, to say the least, is over the EU working time directive. Both the Sun on Sunday and Sunday Times suggested he wanted to ditch the directive and would make the case at today’s Cabinet. This led to Theresa May being bombarded with demands in the Commons yesterday to rule out such a move. The PM stressed workers’ rights would be not just maintained but enhanced (as David Davis has constantly) and the directive will be incorporated into UK law under the EU (Withdrawal) Bill. Yet she strangely didn’t answer the question directly. Unless she does, the Tories are facing yet another potentially devastating viral online campaign claiming they will force people to work longer hours and rob them of their holidays.
3. JUSTINE TIME MANAGEMENT
As I mentioned yesterday, one of the most intriguing rumours wafting around Whitehall is that Education Secretary Justine Greening could be for the chop in the reshuffle. Some ministers suspect her of being less than loyal privately about the PM (though that’s not an uncommon crime), but it seems May’s former chief of staff Nick Timothy really, really doesn’t like her.
In a column for the Sun, Timothy uses a wider call for tax redistribution (higher taxes on ‘accumulated wealth’ and lower taxes on low earners) to launch a withering attack on Greening. He brands her latest Social Mobility Action Plan “disappointing”, adding: “Greening is slowing down successful policies she inherited”.
Of course, some of this stems from the fact that Greening made no secret of her view that Timothy’s plans for new grammar schools were both a distraction and politically highly damaging. Today, Greening launches a consultation on updated guidelines for compulsory lessons in sex and relationship education for schools. The minister will also of course be at full Cabinet (she’s not in the inner-circle on the sub-committee on Brexit). Unafraid of speaking her mind, will she put forward some forthright views on the dangers of the Boris/DD Canada dry model?
BECAUSE YOU’VE READ THIS FAR...
Watch all hell break loose at a Nativity play, as one of the sheep steals Baby Jesus. The Virgin Mary and Joseph weren’t very pleased.
4. LEAK INQUIRY
HMS Queen Elizabeth, the Royal Navy’s brand new future flagship, is suffering an embarrassing leak. The Sun splashes (probably the right word) on a scoop that our most expensive ship ever (£3bn it cost) is taking on 200 litres of water an hour. Thankfully, it’s being pumped out and the vessel remains seaworthy, but the contractors will face a hefty bill now. I wonder if the Queen is remotely amused, given that she formally commissioned the ship this month - after the sea trials found the faulty seal around the propeller shaft.
Meanwhile, the Defence Select Committee has separate concerns over the costs of the F35 jet aircraft which will fly off the carrier. It blames an “unacceptable lack of transparency” over the jets with one estimate suggesting each plane will cost more than £150 million. In some ways it’s shocking that we’re no longer shocked that our biggest aircraft carrier still doesn’t carry any aircraft.
5. MIND THE GAP
It’s 2017 but women are paid less than men in every single Whitehall department, new figures showed yesterday. The biggest gender pay gaps are 17% in the Department of Transport (which blames the long history of a male-dominated field) and 15% in the Brexit Department (which is brand new so has no such excuse). The average gap fell year on year and No.10 pointed out Whitehall’s 12.7% gap is lower than the public sector as a whole (19%) and the private sector (23%)
Today, there’s another big gap laid bare in public life: the lack of senior figures in the judiciary from minority ethnic communities. Justice Secretary David Lidington will later publish his plan to tackle ‘race bias’ in the criminal justice system, but has rejected David Lammy’s call for targets for better racial representation. Lammy says more of the same won’t work.