The Waugh Zone October 3, 2016

The five things you need to know on Monday, October 3, 2016…


While Theresa May puts a new date in our diary for the start of the process of quitting the EU, Chancellor Philip Hammond has been slowly erasing the dates in George Osborne’s surplus plans.

Hammond has his big day at Tory conference today and will confirm that he’s tearing up Osborne’s timetable to wipe the deficit by the end of this Parliament. On the Today prog, he hinted that the Autumn Statement would see more borrowing similar to the £2bn he’s unveiling today for housing, though it would be “targeted high value investment”.

When put to him that his line on ‘borrowing to invest’ sounded more Balls than Osborne, he didn’t exactly deny it. “I hope I’m sounding like a Conservative pragmatist,” he said. Blue borrowing, you could call it.

Hammond will say today that “the task of fiscal consolidation must continue”. That sounds like a promise of continued austerity to the Right of the party who are worried he’s going to ease up on cuts (Liam Fox told me yesterday he didn't mind a bit of wriggle room as long as the direction was going the right way).

Yet he has too to try to reassure business he’s still not given up on serious access to the single market and he warned that “anecdotally we hear of businesses postponing investment decisions”. Don’t forget that Hammond told the Telegraph that he believed the “implicit” message from the EU referendum was the need to protect the country’s economy.

The Times has a piece on David Davis being ‘unfazed’ when shown a forecast of 75,000 job losses in the City recently. Will Hammond be less fazed today?

As for the PM herself, she showed at the ConHome reception late last night (see our video) just how confident she was in her new role. She joked to Euroscep MP James Cleverly ‘I still haven’t had that kiss!’ (He’d told 5Live she was his ‘snog’ in ‘snog/marry/avoid’). But after today’s Hammond speech, will she save all her kisses for Leave? Or will they get some love too?


The most concrete announcement of this entire week is of course Theresa May setting the end of March as her new deadline for triggering Article 50. Beyond all the verbiage and hints and nods of policy direction, this was something firm people could hold onto.

Yet while the announcement that she was finally ‘getting on with it’ delighted most of the audience, it’s the substance rather than the process that continues to preoccupy many.

Ken Clarke got his retaliation in first, warning that after two years of Article 50, “it will take another five or six years with lots of boffins locked away thrashing out agreements”. Ken added that any agreement that is produced will “eventually be denounced by the headbanging faction of the Brexiteers as a betrayal”.

But it is the Remainers who are feeling a keen sense of betrayal right now, by both May and Hammond, from the ‘soft Brexit’ they hoped for. While Liam Fox joked to me yesterday ‘hard Brexit, soft Brexit - we’re not boiling an egg!’, some of his party are failing to see the funny side.

May’s talk of no ‘return to the jurisdiction of the European court of justice’ has spooked some, Dominic Grieve in the Guardian warns against not using Parliament to trigger Article 50, and Nick Herbert has talked of ‘Brexit fundamentalism’. They may be dubbed ‘the Remoaners’ by their critics, but they are not going away.

Nicky Morgan, who has been more sparky than ever, told the TRG fringe last night moderates need to be more ‘muscular’ in pushing soft Brexit (a nudge to Hammond?) and warned of more “intolerance and bigotry”.

Morgan also told the Today prog that she was worried that the Great Reform Bill would be used by Eurosceps to ‘unpick’ progressive policies. There’s a wider question about that bill, not least how slimmed down it will be (which seems likely) and as a result how many areas will pass to statutory instruments (which David Davis instinctively dislikes, along with Lords). One minister told me last night he thought the bill could be as slim as the 1972 European Communities Act it will replace.


Way back in 2001, Nick Herbert worked with David Davis on his leadership bid. But the pair of them obviously are pretty far apart these days on Europe and Herbert’s line in today’s Guardian is designed to wound: “The so-called ‘three Brexiteers’ have so far rather more resembled three blind mice, stumbling around the world’s capitals with inconsistent messages, united only in their assurance that it will be alright on the night”.

But while some Tories have grown apart, the Brexiteers are getting closer. At our WaughZoneLive event yesterday, I was struck by just how much praise Liam Fox heaped on David Davis and Boris Johnson.

Fox said that DD “has got one of the best strategic minds in politics,” and that “people who judge Boris superficially tend to come a cropper”. Of course these are three strong political personalities, but maybe, just maybe, May’s genius is that harnessing them to their common goal will work.

It looks like the trio won’t be arguing over Chevening either. Fox told me that he had no ‘real intention’ to use the mansion to which he and DD and Boris have all been given access (he even joked he already has a nice ‘country home’). DD has made it clear Chevening is not his thing either. Sadly, the most expensive flatshare in Government looks like it ain’t happening.

In our hour-long session (watch it in full HERE), Fox had lots to say. He defended his ‘fat’ ‘lazy’ remarks, he hinted we will pull out of the EU customs union, he revealed he was quite ‘tearful’ when the Brexit result came in. But he was clear most of all that Brussels now had to listen and listen carefully or risk EU collapse.

The International Trade Secretary warned other EU states would now be looking at the UK and thinking how they too can get ‘more control’. “We don’t want there to be a domino effect - but European leaders need to understand that a lot of people are dissatisfied with the way the project is being run.”


Watch Ed Balls dance The Charleston. Just because.


Apart from May’s March date for Article 50, the other significant news of this entire week was her line in the Sunday Times interview that there will be no snap election in 2017. On Pienaar’s Politics on 5 Live, party chairman Patrick McLoughlin was pretty clear the PM had made her mind up and wasn’t shifting.

“There will be an election in May, 2020..You can make all these arguments for going early or whatever, we're not going early," he said. Note that was not ‘no plans’ to go early. It was ‘we’re not going early’.

Yet one of the biggest worries among some Tories is that by going long, May risks all those economic bumps in the road the closer we get to Brexit itself. And if you combine that with continued austerity and any Tory infighting over just how hard Brexit should be, there’s a chance that Jeremy Corbyn could see his party rise in the polls.

That may sound unlikely right now, but it was no coincidence that at her ConHome event last night the PM warned her party not to be ‘complacent’ about Labour’. And in his fringe with me yesterday, Liam Fox really stuck his studs into Corbyn’s shins.

“I do not find Jeremy Corbyn funny and I think that it’s extremely dangerous for the Conservative Party or any other political grouping to say: ‘This party has now taken such leave of its senses it couldn’t possibly be elected.’ Electoral circumstances are unpredictable – we know that from history. This is a very dangerous leader of a very dangerous party at the present time.”

Meanwhile, Labour in-fighting continued even here at the Tory conference demo. Clive Lewis tweeted his disdain for those Corbynistas who now want him deselected for daring to stand up for Trident policy.

As May showed at ConHome last night, the Tory message on Corbyn will be one of red peril, not a red joke. Expect some of this in Wednesday's big speech.


Sajid Javid and Philip Hammond’s big overnight announcement is a £5bn ‘package’ to boost housebuilding. It’s far from clear whether Javid will beat any of his many predecessors at getting building rate up. But one of the most eye-catching bits of the plan is this: some of the funding will come from, wait for it, new borrowing.

And some Tories think that having gone down that route, the May government should go even further. Yes, some are suggesting that the party should adopt Jeremy Corbyn’s big idea from last week, namely to allow councils to borrow against their assets to let them build more. Lord Porter, the Tory Local Government Association chief, has suggested just that to the BBC’s Ross Hawkins.

And he says the extra 25,000 homes today promised by Javid is only a step in the right direction but nowhere near enough.

Housing minister Gavin Barwell, however, has a very different take on Corbyn’s plan to build half a million new social homes. The Indy picks up on a fringe where Barwell said the Labour plan would actually increase inequality.

He said: “If you’re going to build at the current rate – which is what he’s talking about – and half the people are going to go in council homes and half of them are going to own, the divide in society is only going to get wider and wider. I would have thought he cares about that.”

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