1. MONEY TALKS
It’s PMQs day and with Theresa May on a surprise Middle East trip, it will be her de facto deputy Damian Green versus Emily Thornberry at the despatch box at noon. Overnight, the PM has already been forced to defend the decision to let Green stand in for her despite the inquiry into his alleged sexual impropriety. As one of Labour’s strongest female voices, Thornberry will be keen to make her opposite number squirm. With a swipe at her old foe Boris Johnson, she could seize on the £350m/week NHS Vote Leave claim and contrast it with the £49bn Brexit divorce bill. For his part, Green could seize on Diane Abbott’s hint at a second EU referendum.
Exploiting tensions between frontbench and backbench is often the best PMQs tactic and Thornberry could taunt Brexiteers over the Government’s apparent surrender to Brussels. The Telegraph, FT and Guardian report that May has agreed to substantially increase her Brexit ‘divorce bill’ payment from £20bn in her Florence speech to between £44bn to £49bn (the FT’s editor may regret his Twitter tease that tipped off the Telegraph). Downing Street sources refused to confirm the figures, but even ardent Brexiteer Chris Grayling said this morning they were mere ‘speculation’, hardly a denial. “I’m not talking numbers,” he said, but “we need to leave on good terms…The price is meeting the obligations that we have built up, no more, no less than that.”
So far backbench Brexiteer discipline is matching that of Cabinet Brexiteer discipline. Nigel Farage writes in the Telegraph that the payout would be a “complete and total sellout”, but Iain Duncan Smith tells the Mail he “would be very happy” if the cash deal meant trade talks could start. One Tory Euroscep tells the Daily Express: “We don’t believe this figure of 45 billion euros or more because we have had clear assurances that no money will be put on the table, meaning that the Government will not commit to a final figure.” Indeed, no actual figure may ever be put on this formally (though surely both sides could produce a ‘fan chart’ of the range of future liabilities in coming years, and Brussels and the UK will have to detail actual bills paid).
As I’ve written before, the real battle is over not so much the deal itself but how to sell it to varied audiences. Self-interest means both London and Brussels want a deal and merely ‘showing progress’ on issues like the Irish border and EU citizens will be enough for next month’s EU summit. Some May supporters think Brexiteer MPs are just so focused on getting out in 2019 that they will swallow a lot to get to that end point. And they calculate that the number of backbenchers and ministers willing to fall back on WTO terms (the hardest of hard Brexits) is so small that even tricky legislation can be guided through Parliament.
As for the selling job, the Mail seems to have been won over, declaring May’s “gamble appeared to have paid off” because the EU is ready to move on to trade. Liam Fox is in Australia, Boris Johnson is in Africa, but neither looks likely to complain. Leavers will argue they’ve talked the EU down from its highest divorce bill demands, and insist they’ve retained leverage over future hard cash payments. But Remainers will argue May’s climbdown is just the latest that proves the EU has the UK over a barrel (the Guardian puts that case HERE).
The next big problem for the PM will be over how to sell the two-year transition period after Brexit. The FT’s George Parker suggests this is the real reason why David Davis last week unveiled plans for a new “withdrawal and implementation bill”. He says the EU picked up May’s Florence pledge to have a transition under “the existing structure of EU rules and regulations”, and ran with it. May has agreed to transition terms that include being subject to EU rules and ECJ judgments and allowing free movement, the FT says. And the primary legislation “allowing the UK to stay in the EU in all but name” will need to be passed before 2019, “a fact that is just dawning on some Conservative MPs”. This, rather than the divorce bill, may be the moment of maximum danger for Theresa May.
2. INCREMENTAL GAINS
Possibly one of the most important stories around today is the Health Service Journal’s interview with Jeremy Hunt, in which he signalled he wants to reform nurses and midwives’ pay along the lines of the controversial junior doctors contract. The Health Secretary said he wants ‘a more professional pay structure’, suggesting the ‘increments’ pay system and weekend working top-ups should be revised. Health unions reacted swiftly, with some suspecting these cuts are the quid-pro-quo for any lifting of the 1% pay cap.
There are just 55,000 junior doctors in the UK, but 300,000 full-time equivalent nurses and midwives (and 600,000 registered in total), so this is a big deal. Many already work anti-social hours and any change could dramatically deter those working in an already-understaffed service. If Hunt really is gearing up for a fresh fight with NHS staff, maybe all those weekend stories about him planning to run for Tory leader really are pure mischief.
Meanwhile, a Health Education England chief yesterday told MPs of his plans to hire 5,500 nurses from India and the Philippines, with 500 due to be recruited from overseas by March. The number of EU staff in the NHS is expected to drop after Brexit, so this looks like contingency planning. But Labour has pointed out more home-grown nurses would be in the pipeline if their bursary was restored.
3. MARGINAL DECISIONS
The long war of attrition between Labour’s left and centrist groupings continues, with Momentum and Progress and Labour First all digging in for years of localised battles. Only a handful of moderate councillors across the country have failed to be reselected ahead of May’s local elections, but enough to worry MPs that they could be next.
It’s the fight for Parliamentary seats that for many matters most, not least among the 76 ‘target seat’ marginals list drafted by Labour HQ. These include some micro-marginals where Tory MPs held on in June with just a few hundred votes. But we report that Jeremy Corbyn’s hopes of getting Labour “battle ready” for a general election have suffered a setback after local parties failed to meet his year-end deadline for selecting new candidates in these seats.
Corbyn told the ruling National Executive Committee (NEC) in September that he wanted all 76 key marginals to pick their prospective Parliamentary candidates “by Christmas”. Yet a mix of local delays, a shortage of applications and that battle between ‘Left’ and ‘centrist’ activists means that just three of the seats have chosen their Westminster candidates so far. Eight more seats will select next month, but the rest have been postponed to the New Year, many with no timetable at all. Team JC really do think the Government could collapse any minute and want candidates in place as soon as possible. But others warn that being a PCC for potentially four years is an expensive business, and could deter some working class contenders if no extra support is offered.
BECAUSE YOU’VE READ THIS FAR...
Watch this dog happily bouncing on a trampoline, until it suspects someone is watching and then freezes with a ‘nothing to see here’ face.
4. BUILDING REGS
It’s a full week since the Budget but stuff buried in the Red Book continues to be unearthed. The latest is the discovery that Theresa May’s Tory conference pledge to invest an additional £2billion is coming from a cut in spending on other house building programmes. My colleague Owen Bennett reports that tucked away in the Office for Budget Responsibility report is a key line that the money comes from “reducing spending on ‘accelerated construction’ and ‘starter homes’ across the four years from 2017-18 to 2020-21.” Labour’s John Healey says this ‘recycling’ of funds just proves the spin on Government housing policy.
Philip Hammond ignored Sajid Javid’s pleas to be more radical and he has already had a political duffing up over the fact that not a single new home would directly result from his £15bn in new guarantees and loans. National Housing Federation chief David Orr told MPs on Monday that the Budget would lead to “relatively small growth” in the number of homes built. He also pointed out this stark fact: “For the first time in history, there are more people who own their own home outright than those buying a home with a mortgage”. Yesterday, the Government’s own figures showed the number of new social housing buildings completed between April and September this year was down 98% on the same period in 2009.
5. RAIL REVERSAL
A new rail strategy plan was published at 7am and Transport Secretary Chris Grayling has secured headlines for hints that he wants to see reverses in the infamous ‘Beeching cuts’ that saw 4,000 miles of rail lines closed in the 1960s and 1970s. There will also be some changes to franchise including the expected breakup of the strike-hit Southern service.
Labour’s Andy McDonald is unimpressed and points out that no new money appears to be forthcoming. He also says ministers recently culled planned upgrades to major lines, including the electrification of routes in the Midlands and Wales. What doesn’t help the Government is the Budget’s big new rail policy was a reopening of a route between Oxford and Cambridge. As important and overdue as that is, it doesn’t dispel perceptions that this administration really does favour the wealthy south east.