1 MANSION TACKS
Theresa May’s latest ‘big speech’ on Brexit is set for lunchtime at the Mansion House in the City of London. As she faces the headwinds of Brussels’ own red lines on future trade, it looks like she’s going to tack her boat through the negotiations by trying to please both Leavers and Remainers in her Cabinet, and beyond. Her ‘five tests’ are not in the Gordon Brown style (his were deliberately high bars aimed at stopping us joining the euro) and look more like a rhetorical device than a meaningful checklist for the EU27.
The overnight brief lacked specifics and no one is expecting anything new on Northern Ireland or the customs union conundrums. Instead, we should get some more flesh on the bones of May’s plans to closely align certain sectors with EU rules, with regulators on car manufacture, pharmaceuticals and aviation continuing to play a key role, albeit with some new independent arbitration. Will we get something as substantial as the Lancaster House or Florence speeches? It’s a long speech, so maybe she’ll surprise us.
No.10 hinted to us yesterday that during the two hour Cabinet meeting to sign off the speech, some amendments were made. Later, the Speccie’s James Forsyth (and today the Times’ Francis Elliott and FT’s George Parker) revealed that David Davis and Boris Johnson stepped in to block a proposal to make “binding commitments” to mirror EU rules in some areas. Business Secretary Greg Clark and Chancellor Philip Hammond had raised the idea, only to be opposed by the Brexiteers. There was no ‘showdown’, one source tells me, but rather an agreement to park the issue until later. Which is really what this speech may do too.
What about the EU? Although May posits some kind of hybrid arbitration system rather than pure ECJ jurisdiction, Michel Barnier was firmer than ever yesterday, saying: “In the absence of a common discipline, in the absence of EU law that can override national law, in the absence of common supervision and a common court, there can be no mutual recognition of standards”. Some in the Cabinet think Barnier is overreaching himself and is trying to make the EU27 stand firm. Even ‘good cop’ Donald Tusk sounded distinctly frosty yesterday. However, it may all come down to a balance between complexity and self-interest. Will the EU reject the hassle of sorting a complex new system designed to help the UK out? Or will it deem such a system will ultimately help its firms and consumers too?
Transport Secretary Chris Grayling was the minister on the breakfast sofas and he told Today (not once, but twice) that the PM would set out a “lot of detail about how things will work”. Grayling said on aviation and science it was obvious we would want to continue with EU-led regulatory bodies. He added May’s speech would “recognise it’s not about cherry picking”. Critics will counter that continuing with some EU regulators is the low-hanging fruit here, and the serious stuff is on rules for our financial and other services. Most telling of all will be how honest the PM wants to be with the public. If she were to admit today ‘we can’t have our cake and eat it’, that would show a refreshing honesty for many - on all sides of the debate. We will have a snap HuffPost Verdict out later, plus longer analysis.
2. AUSTERITY BLUES
David Cameron made a rare reappearance on Twitter last night as he and George Osborne got the band back together to celebrate hitting their austerity target, albeit two years late. Yes, new statistics showed the UK’s day-to-day budget was finally in surplus. Unsurprisingly, they were both treated to an online backlash, with the former Chancellor’s claim that it was “a remarkable national effort” prompting criticism that rich toffs like him hadn’t felt any of the pain. But as lots of people pointed to the cost of austerity in the form of an NHS and social care crisis and closures of refuge shelters, children’s centres and libraries, the Treasury also hailed the figures and said there were no plans to alter the Government’s plans.
Which is why a new FT interview with the resolutely anti-austerity Shadow Chancellor, John McDonnell, is nicely timed. And the paper opens with McDonnell being asked a simple question: who are your business heroes? He can’t think of any, replying instead: “There’ll be creative business leaders but actually, when it comes down to it, they can’t do anything unless they’re part of a collective..Unless they’ve got that wealth creator, that engineer and that work person, that skilled person at the bench to fulfil that idea . . . they’re nothing.”
The profile in the FT is far from a hagiography, with various critics cited on and off the record, and some business leaders fearing a McDonnell Treasury more than Brexit itself. Former GMB union chief Paul Kenny says flatly: “My experience with him in recent years is that he’s untrustworthy.” McDonnell admits he is more confrontational than Jeremy Corbyn, telling the paper: “I will be more in people’s faces”. And when asked about his previous joke about “garrotting” Danny Alexander, the former Lib Dem Treasury chief secretary, McDonnell replies: “He survived, didn’t he?”
3. KEN AGAIN
One of McDonnell’s closest allies in the 1980s was Ken Livingstone. The two of them fell out spectacularly at the GLC (they didn’t speak for a decade) after McDonnell suggested the Thatcher government’s rate cap on the GLC would require £140m of cuts. Livingstone told him at the time “We’re going to look like the biggest f***ing liars since Goebbels”, and promptly ousted his colleague.
And it’s Ken’s penchant for Nazi history that has of course got him into serious trouble in the past two years. Yesterday, HuffPost revealed that outgoing Labour general secretary Iain McNicol had decided to indefinitely suspend Livingstone from the party, pending a formal investigation into his alleged anti-semitism. The ‘administrative’ suspension means that when the former Mayor of London’s two-year sanction ends in April, he won’t be automatically let back in. It’s now up to the NEC disputes committee to sort his fate in coming months.
Meanwhile, another key McDonnell ally made his own waves yesterday too. Momentum founder Jon Lansman confirmed he would apply for the general secretary’s job. The Shadow Chancellor is firmly backing Unite’s Jennie Formby for the post and I’m told on Monday night he made a personal plea to Lansman not to split the Left NEC vote. Lansman clearly has other ideas and wants an open contest to promote his vision of a member-led party that ends trade union ‘stitch ups’. One Unite official tweeted Lansman had made a ‘huge error and misjudgement’. Others are weighing up whether they should run for it too. It will be an interesting week ahead.
BECAUSE YOU’VE READ THIS FAR...
Watch the only female presidential candidate in Russia chuck some water over a rival politician. Funnily enough, Vladimir Putin didn’t even bother turning up.
4. TAKING THE RISE
MPs are facing a PR nightmare after IPSA decided to award them a 1.8% pay rise, well above the 1% pay cap that still applies to millions of public sector workers. The hike means they will get an extra £1,300 a year as their salary goes up to £77,379 from April 1. Since austerity began in 2010, MPs have seen their pay go up by 17.7%.
MPs don’t get a say in the independent body’s decisions and have to take it. They can of course then decide to donate the rise to charity or other causes. When asked what the PM would be doing with her increase yesterday, No.10 was unsure. But for Philip Hammond, it’s a reminder that his ‘no frills’ Spring Statement comes amid fresh pressure to actually do something on public sector pay.
5. MEN OF STEEL
Theresa May’s mission to influence Donald Trump shows no sign of working when it comes to his innate protectionism. The President sparked fresh fears of a trade war yesterday when he announced steel imports would face a 25% tariff and aluminium 10%. “When our country can’t make aluminium and steel... you almost don’t have much of a country,” he said at a White House event. He’s got a point about Chinese steel dumping but the EU, Canada, Mexico, Brazil and China all threatened retaliatory steps as they feared big job losses.
Trump likes presenting himself as a strongman leader, but it was in the home of the original Man of Steel that we saw perhaps the most worrying development of yesterday. Showing a Stalin-like love of military hardware, Vladimir Putin surprised a rally yesterday with video of plans for brand new “invincible” nuclear weapons that could dodge Western defences. With Trump promising his own new spending and President Xi threatening to extend his term in office, the Cold War arms race may be back, but with an Eastern twist. And it all merits almost a footnote on the news.