POLITICS

The Waugh Zone Wednesday July 5, 2017

The five things you need to know about politics today.

05/07/2017 08:26 BST | Updated 05/07/2017 08:43 BST

1. POWER CUT

It’s PMQs day again and after last week’s 50-minute marathon Speaker Bercow could again turn the event into a form of water torture for Theresa May. There’s no shortage of topics, from North Korea’s long-range missile “gift to the American bastards on their independence day” to another U-turn finally confirmed (free school lunches are to stay). David Cameron’s ‘selfish’ attack line on public sector pay, Brexit in-fighting, tuition fees and May’s plunging Tory popularity could all feature.

Yet what will loom large more than anything will be the Grenfell Tower disaster. The PM’s own three-week deadline for offering all residents a new home will pass and while technically all appear to have been offered something, only nine households have accepted (many didn’t want tower block accommodation). There was genuine anger at the residents’ meeting with police last night, as coroner Fiona Wilcox told of the ‘apocalyptic’ state of the burned out flats. The coroner said the ‘recovery phase’ could take until the end of year.

The recovery for Kensington and Chelsea council’s own reputation could take a lot longer. We report today that Communities Secretary Sajid Javid will tell Parliament that an external ‘taskforce’ will take over the Tory borough’s key services of housing, regeneration, community engagement and governance. This is not the same as Sadiq Khan’s plea for commissioners to take over the whole council and could provoke a fresh backlash, but losing key powers over housing and regeneration does look like an admission that the poorest residents were failed for years.

I’m told Javid decided on the voluntary model (K&C need to invite in the taskforce) because he felt other council services were well-run. His model is Birmingham City Council, where an independent improvement panel was called in to sort finances and governance. Still, after Javid accusing Jeremy Corbyn of turning Grenfell into a ‘political football’ on Channel 4 News last night, Labour may argue he’s protecting a Tory council from even tougher action that was meted out to Tower Hamlets and Rotherham (which both were taken over wholesale by commissioners).

A written ministerial statement is drafted and expected to be laid today (and Javid could make an Oral statement too), but it looks like the PM herself will want to lead on the Grenfell issue in PMQs first.

 

2. DAVE’S WAGES OF SIN

It’s been quite a while since anyone made the ‘moral’ case for austerity. Remember all those 2010 Tory posters of a newborn baby, warning us not to saddle the next generation with a massive deficit? Labour said at the time it was baloney and even some senior civil servants despaired privately that the deficit had become a ‘fetish’. A lot’s happened since then, to put it mildly, and so yesterday David Cameron restated the argument for the public sector pay cap pushed by ex-Tory Chancellors Lamont, Lawson, Clarke and his old chum George Osborne.

It was no coincidence that Cameron’s words first emerged in Osborne’s Evening Standard. But his claim that critics of the 1% pay cap were being “selfish” showed that it’s not just Theresa May who has a tin ear. The ex-PM’s line warning against “spending money today that you may need tomorrow” will prompt a hollow laugh among those who saw his EU referendum as proof that he’s the most short-term gambler of any PM in recent years.

But just as tone deaf was the fact that Cameron chose to make his points in a well-paid speech (his office confirmed to me it was paid, though they dismiss as speculation claims he gets £100k an hour for speeches) to wealthy businessmen in Seoul. Labour’s John McDonnell told me: “Time and time again the Tories demonstrate they live in a different world from the rest of us”. We will probably never find out exactly how much Dave charged for this speech, as his company accounts won’t disaggregate individual events. He no longer has the MPs’ register of interests to worry about.

Meanwhile, the GMB has some new research showing 2.4 million children have been hit by the public sector pay squeeze. The Fire Brigades Union says the 1% cap is ‘dead in the water’ as it looks like being offered a 2% rise. And things can only get worse if you’ve got a mortgage. It’s 10 years exactly since the Bank of England last put up interest rates, to 5.75% (they’re still 0.25%), but the FT says pressure is on to raise them. Meanwhile, Pensions Secretary David Gauke has ruled out changing pensions tax relief – so the Treasury will have to fund any pay rises from somewhere else.

 

3. BREXIT BLUES

Rather amazingly, the issue of public sector pay did not get a mention at Cabinet yesterday. But Brexit Secretary David Davis did reveal to colleagues that he planned to table his (no longer ‘Great’) Repeal Bill next week. DD emerged as the favourite of Tory members in a ConservativeHome.com survey yesterday and is arguably the one minister who holds the PM’s fate in his hands.

Yet on Brexit behind the scenes, things are getting sticky. The FT had a fascinating report yesterday of the Whitehall turf war unleashed since the departure May’s aides Nick Timothy and Fiona Hill. It revealed that the Treasury has written an unpublished paper which challenges Liam Fox’s department to prove it can line up free-trade deals with non-EU states that would outweigh the loss of trade from quitting the customs union.

Olly Robbins, the DexEU permanent secretary, also came for some stick for his dual role as the PM’s ‘sherpa’ in Brexit talks. “Sometimes Olly has sent papers up to Number 10 which David Davis doesn’t get to see,” one insider says. When I raised this with the PM’s official spokesman yesterday, he said he’d heard no such disquiet. Meanwhile, Shadow Brexit Secretary Keir Starmer has used the FT to call on May to dump her ‘red line’ of quitting the European Court of Justice, to retain membership of the European Medicines Agency and Europol.

Francis Elliott in the Times reports arch Leaver Andrea Leadsom was so unhappy at her demotion in the reshuffle that she insisted on more media appearances as Commons leader. Still, one Brexit-friendly face could be soon running No.10′s comms. Harry Cole’s scoop in the Sun is that BBC political progs chief Robbie Gibb (brother of minister Nick) is in the frame. Diplomatic editor James Landale has been approached too.  The Sun also reports on a tricky pay issue any new Downing St press supremo will have to deal with: a fresh review of MPs pay, after their bumper wage hike.

As Hammond and Greg Clark try to reassure business over Brexit, the FT has a piece from May’s former No10 policy unit chief John Godrey declaring “There is a shortage of business experience at the heart of government, still sometimes a degree of mutual incomprehension”.

 

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4. DEBT MOUNTAIN

Students from the poorest backgrounds are leaving university with the most debt thanks to the Tories decision to scrap maintenance grants, a new IFS report reveals today. The least well off students will graduate owing more than £57,000 to the Government in tuition fees and loans.

The research claims the controversial changes to tuition fees in 2012 actually made the poorest graduates better off to the tune of around £1,500. But George Osborne’s decision in 2015 to replace the maintenance grant with a loan has helped wipe away that benefit, and most students will now be paying off their debts into their 50s.

But the IFS has some warning words for Labour too, suggesting its focus on abolition tuition fees altogether (at £11bn the biggest ticket item in its manifesto) was misguided. It says the main beneficiaries from reducing fees “would be high-earning graduates, as they are the ones making the highest repayments under the current system”.  The real issue is the jacking up of interest rates to 6%, as well as the ditching of maintenance grants, the think tank says. Coincidentally, it’s 10 years to the day since

Some in Labour argued before the manifesto that restoring grants and slashing interest rates, as well pumping the cash into early years education, would help the poorest much more than a middle class subsidy like abolishing fees. TUC research shows among young people who voted Labour, the NHS was more important than abolition of fees. But is it too late for the party to change tack?

 

5. BANNED AID

One bit of the Cameron legacy (or rather the Blair legacy, to be more precise) that Theresa May actually defended during the general election was the 0.7% overseas aid target. In fact, one of her most lucid moments came when she explained to a factory worker just why the promise helped both the UK and the poorest in the world.

Some on the Right of the party said that was a mistake at the time and in recent days some MPs (including Rob Halfon) argue that a public sector pay rise could be fully funded if the annual £13bn development budget was radically cut.

But today the 0.7% pledge gets backing from one of the most influential think tanks on the right, Policy Exchange. Its new report says that the Government should reshape the budget, with more on R&D and anew Office for Aid Effectiveness. It also has a foreword by Ruth Davidson, which argues that a post-Brexit Britain will need more than ever to use international aid to show it is leading in tackling global challenges.

 
 
 
 
 

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