The Waugh Zone October 6, 2016

The five things you need to know on Thursday, October 6…

1) KIP, KIP, HOORAY?

Theresa May’s speech certainly got several of the headlines she wanted. Her ‘the state is good’ bid to steal Labour votes gets lots of coverage, as does her Thatcher-style attack on “activist, left-wing human rights lawyers” who “harangue and harass the bravest of the brave” in our armed forces.

Yet it seems May was trying to build an electoral alliance of not just disaffected Labour voters and core Tory voters, but also UKIP supporters. From grammars to hints at foreign aid reform to tougher controls on immigration, the ingredients are there. ”She’s basically rebranded the Conservative Party UKIP,” Arron Banks told Newsnight.

The danger of the hardline rhetoric, and plans, on immigration is that they do little to reach out to ‘the 48%’ who voted Remain in the EU referendum (see my blog on May’s speech HERE). And while it’s obvious that Labour is split on the benefits of migrants, ideas like name-and-shame lists of firms with high numbers of foreign workers only serve to unite Corbyn’s tribe.

Just as with grammar schools, the Amber Rudd idea has brought together Labour MPs and their leader rather than divided them. Corbyn took more than a day to respond to Rudd’s list, and to Jeremy Hunt’s equally controversial plan to cut reliance on foreign doctor numbers. But when he did, he came out strongly, accusing the Tories of trying to “fan the flames of xenophobia and hatred in our communities and try to blame foreigners for their own failures”. A unifying theme for Labour ahead of its reshuffle (expected next week now).

As well as business ridiculing the idea, the Tory modernisers’ unease over the name-and-shame plan is palpable too. Danny Finkelstein told the BBC it was a “misstep”, Tory MP Neil Carmichael said it was “unsettling” and would “drive people, business and compassion out of British society and should not be pursued any further”. Ruth Davidson also praised migrants yesterday - just as a Twitter account backing Marine Le Pen endorsed May's speech.

Despite May’s attempt to label Labour the new ‘Nasty Party’, this week’s ‘homegrown’ v ‘foreign’ rhetoric has actually tarnished the Tory brand, not burnished it. Another key problem with all the talk about keeping out foreign workers and doctors is that it undermines the upbeat claims by Fox, DD and Boris that post-Brexit Britain will be more ‘open’ to the world’s business and talent.

The Telegraph’s James Kirkup has done a damning takedown of May’s claims about migration and wages. And we learn today that George Osborne is to write a book titled “The Age of Unreason”, addressing the rise of “populist nationalism and prejudice”. “It's time for the defenders of open societies and free markets to fight back,” he says. It’s aimed at Trump, but the message for May is obvious.

Funnily enough, Nick Clegg’s own ‘Between the Extremes’ book was originally titled ‘The Art of the Possible, In An Age Of Unreason’. He was persuaded to drop the title as it was seen as too ‘prententious’.

2) CUSTOMS AND BREXCISE

The best thing about reading the papers towards the end of conference week is you get to see the product of all those private breakfasts, lunches and dinners where ministers break bread with hacks.

Today, the Sun reports that a Cabinet resignation is looming over Liam Fox’s clear desire to pull the UK out of the EU customs union. It says Foxy is pitted against Philip Hammond (“and, increasingly, Foreign Secretary Boris Johnson”) on the topic.

What fuelled the row was Fox’s strong line at our HuffPost fringe on the issue. “Most businesses in the world are outside the European Union,” he said. “The United States is outside the European Union — it doesn’t seem to be seriously hampered in doing business with Europe because it’s not in the customs union.”

Hammond and Johnson have serious fears over the extra costs that delays and tariffs will inflict on British businesses and jobs. One Cabinet minister told The Sun: “In my view, there is no way Liam and Philip can ever agree on this. They are ideologically too far apart, and one of them will end up walking.”

The Times too has a raft of quotes laying bare the splits among ministers. While Fox thinks the benefits of new trade deals will be felt on ‘day one’ of Brexit, others tell the paper that Britain might not see true benefits for “a 15-year time horizon”. Others warn the Treasury could lose more than £20 billion a year in tax. One senior Brexit-supporting minister said that Britain would reap in “two to four years” the economic rewards of leaving the EU, but Remain colleagues accused Brexiters of “a reality gap” between rhetoric and what was achievable.

Theresa Villiers, one of the former Cabinet Leavers, told a fringe it could take years for any US trade deal, while DD’s PPS Stewart Jackson was slapped down by No.10 for his ‘personal view’ that EU contributions should be an extra ‘red line’ in Brexit talks. When the PM warned of ‘bumps in the road’, she may have meant Cabinet unity and not just the economy.

3) QE TOO SUNK?

One of the most startling passages in May’s speech was her line attacking the “bad side effects” of current monetary policy of “super-low interest rates and quantitative easing…people with assets have got richer, people without them have suffered…people with savings have found themselves poorer. A change has got to come. And we are going to deliver it.”

Some of us spotted a potentially huge change in the policy of effectively printing money to help financial investors. And don’t forget massive sums are involved here (in August alone the Bank of England said it planned a fresh £70bn bond buying spree to stabilise things after the Brexit vote).

When we asked No10 aides afterwards if this was a signal of something new (the PM did promise to ‘deliver’ ‘change’, the clue is in her actual words), we were told to wait for the Autumn Statement. Then there was a reverse ferret and No.10 took fright later at the idea that the PM was interfering with the independent Bank of England.

Then George Freeman, the Tory MP who chairs the PM’s policy board, told Newsnight that “we have to listen to the roar that we heard this year.” The Government was "looking at all the mechanisms to make sure money flows properly", in order to develop infrastructure and its industrial strategy, he said."We are asking the question. She's signalling loud and clear that we need to make sure we understand what effect this model of growth has had on those that are paying for it.”

BECAUSE YOU’VE READ THIS FAR…

Watch this base-jumper leap into the clouds from a Dubai skyscraper

4) LONE WOOLFE ATTACK

Steven Woolfe is undoubtedly the frontrunner to be the new UKIP leader, but we know that nothing is straightforward with the Kippers. His enemies have dug up a statement he made just days ago in which he naively offered a ‘on the one hand, on the other’ assessment of Theresa May.

He said he had been “enthused” by the start to her premiership, not least because of grammars and ‘clean Brexit’ (Kippers and Tory MPs much prefer this phrase to ‘hard Brexit’, not that they are politically correct about language). Woolfe even said May’s bright start had prompted him and many colleagues “to wonder whether our future was within her new Conservative Party”.

What his critics miss is that he then immediately went on to say was “However, having watched the Prime Minister’s speech on Sunday I came to the conclusion that only a strong UKIP can guarantee Brexit is delivered in full and only our party can stand up for the communities of the midlands and the north.”

But even floating the idea of joining the Tories has sparked a bitter backlash. And it seems David Davis and other Tories have been trying hard to get Woolfe to switch sides. One senior figure told HuffPost it was hard to “trust someone who was in talks about defecting to the Tories just days ago, and only thought against it because the Leadership became free again”.

The knives are also out for Woolfe’s spin man Jago Pearson, for a Times Red Box piece in which he talked of “all of my fellow Conservative members”.

Farage has ruled himself out but his former chief of staff Raheem Kassam is running. Meanwhile, donor Arron Banks tells the Guardian that his party is “being run by circus clowns”. Oh, and he says it should dump its only MP, Douglas Carswell. It’s enough to make Corbyn’s Labour look like happy families.

5) FRACK TO THE FUTURE

Sajid Javid will reveal later today whether he has approved a key fracking application. In the landmark ruling for the UK shale gas industry, the Communities Secretary Sajid Javid will decide the appeal by firm Cuadrilla to test frack in Lancashire.

This is a test case because it’s about a greenfield site and it would enable shale rock to be fracked horizontally for the first time, in a bid to yield more gas. Opponents say it uses techniques that risk the environment because of the chemicals and pressure used.

Lancashire County Council refused permission to extract shale gas at two sites - Roseacre and Preston New Road - last year on grounds of noise and traffic impact, forcing Cuadrilla to appeal.

In response, a Planning Inspectorate report was sent to the Department for Communities and Local Government on 4 July, with Mr Javid being given three months to reach a decision on both sites.

A lot is riding on this, not least as a go-ahead would send a signal similar to the deal on Hinkley Point that the May government wants to expand energy capacity - despite environmental concerns.

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