1. CATEGORICAL IMPERATIVE
Winter is finally beginning to bite as sub-zero temperatures hit the UK this week. But ministers are still split between those who think life outside the warm embrace of the EU’s customs union will plunge our economy into the deep freeze – and those who think the sunlit uplands beckon once the cold, clammy hand of Brussels is lifted from our buccaneering businesses.
Ahead of the crunch meeting of the Cabinet sub-committee on Brexit this Wednesday, there is at least an emerging consensus that Theresa May has approved a form of words the whole team can live with. It turns out that Liam Fox was not freelancing last week in China when he suggested the UK had to stay out of any form of customs ‘union’.
No.10 sources last night backed him up firmly, declaring: “To put this to rest, we are categorically leaving the customs union… we must also be free to sign those trade deals with the rest of the world.. So it is not our policy to stay in the customs union. It is not our policy to stay in a customs union”. Or, as another senior aide put it to me this morning: “The key point, as the PM said about 15 times last week, is we need to have freedom to sign trade deals”.
Two political imperatives seem to be at work here: May needs the Brexiteers (led by the Jacob Rees-Mogg) on board; the Brexiteers need May in place to avoid a leadership race that could derail Brexit itself. And, crucially, Remainer ministers seem pretty relaxed about the semantic debate, happy that the two options devised are “a customs partnership” or “a highly streamlined customs arrangement”.
As I’ve written before, members of the Cabinet sub-committee prefer its discussions to a full Cabinet as the debate is less about grandstanding and more about finding common positions. The Times reports that there is one compromise in the air, whereby Philip Hammond agrees to trade deals with non-EU states in return for a limited extension of the current customs union. Ministers tell me that Boris is frequently the one in Cabinet who is often a lone voice on Brexit, a factor that could endear him to backbench Eurosceptics in any future leadership race, if he walks out. Few suspect he will actually quit if he doesn’t get what he wants. But will he spring another surprise and prove them all wrong, just as he shocked David Cameron in coming out for Vote Leave in early 2016? We are nearly exactly two years from his fateful announcement back then.
There’s also a suspicion that some Remainers in Cabinet are going along with ‘cake and eat it’ demands of the EU in the full expectation that Brussels will refuse. Some of them think that the word ‘union’ or ‘arrangement’ is irrelevant, as long as the outcome is very similar to today’s frictionless trade with the EU (and are happy for the Brexiteers to have a propaganda ‘victory’ on words, but not on substance). Michel Barnier is in London today for a meeting with David Davis. There’s no press conference, but Barnier’s statement will be worth watching to see his reaction to the UK ruling out ‘a’, as well as ‘the’ customs union. Will he help May to sell a workable solution to her party? Or make life more difficult?
2. APOTHECARY HYPOTHECARY
Will there ever be a political consensus on how to fund the cost of our ageing population while keeping the NHS free at the point of use? The UK somehow managed to find cross-party agreement on increasing the state pension age (another big ticket item) in a way that few other countries have managed. But on health and social care, a similar long-term solution is desperately needed yet often seems further away than ever.
Today a panel of health experts set up by the Lib Dems has come up with what many expect will one day be part of the answer: a ring-fenced (‘hypothecated’ in the jargon) tax to provide the funds needed. What may make politicians sit up and take notice is that the panel includes former NHS chief exec Sir David Nicholson, former Royal College of GPs chief Claire Gerada and former RCN chief Peter Carter.
Their report suggests a new combined health and social care tax, which would take in bits of council tax and a reformed National Insurance levy. Reinstating a cap on the cost of personal social care is also among the recommendations. There will be disagreement about the detail but with Tory MPs like Nick Boles recently backing the idea of a special tax for the NHS, it is at least a starting point for debate. Labour is wary of any cross-party working not least after the Lansley-Burnham ‘death tax’ bitterness, but will Parliament take the lead on this and prod the parties towards a solution? Let’s see.
3. BENEFIT GIG
New Work and Pensions Secretary Esther McVey makes her debut at her departmental question time in the Commons today. Universal Credit and Carillion pensions will feature, but one question that caught my eye is from the SNP’s Martyn Day that askes for “an assessment of the effect of the benefit freeze on the use of food banks”. So far, McVey has taken steps to defuse criticism of the harsher elements of welfare policy, but on this one she may well dig in.
Many think tanks say that in-work poverty stems from not just the earnings squeeze but specifically from George Osborne’s four-year benefit freeze (most working-age benefits frozen at 2015/16 cash values from 2016/17 to 2019/20 inclusive) and today the main business of the Commons is a debate on the Social Security Benefits Up-rating Order 2018. Given that this will seek to continue benefits (other than for pensioners and the disabled) do not rise in line with inflation, will Labour try to sneak in a vote? There’s another issue too in that half a million expat pensioners don’t get any uprating.
Meanwhile, speaking of keeping pace on the income front, the new IFS report on the gender pay gap shows how far we have to go to help parents who take part-time work during a career break. In this anniversary year of women’s suffrage, we discover that by the time a first child reaches the age of 20, mothers earn around 30% less on average than similarly educated fathers. The IFS doesn’t offer solutions but better back-to-work skilling and fairer childcare are among the policies campaigners want to see.
BECAUSE YOU’VE READ THIS FAR...
Watch this thief slip up (literally) after trying to steal some packages from a porch.
4. LODGER THE DODGER
The Guardian reports that Freemasonry records have revealed that the secretive organisation has two active lodges operating in Parliament. One, New Welcome Lodge, recruits MPs and staff. Another, Gallery Lodge, is for Gallery and Lobby reporters. The United Grand Lodge of England claims no new members have joined the journalists’ lodge since 2000, which would fit with gossip years ago that a small group of older hacks were masons.
I do recall once arriving early for a Commons meeting, in a little-known part of the House, to find all the chairs arranged in a very odd manner indeed, and hearing a rumour that this was where masons had met. Verifying anything was impossible. What’s particularly odd is that neither MPs nor journalists are required to declare their membership in the Commons register of interests. Surely if there’s nothing to hide, transparency is now long overdue?
5. GREAT WALL OF CYBER
On the trip to China with the PM last week, all of us in the British delegation were more than aware of the hacking threat. No10 staff had taken ‘burner’ phones to avoid being compromised and few used Gmail or Twitter blocked by the authorities. The FT has an advance of a report out today from GCHQ’s National Cyber Security Centre showing the scale of the threat at home too.
The NCSC took down more than 120,000 fake websites last year and blocked 54m malicious online attacks as part of a “great British firewall” designed to stop cyber criminals targeting the public for money and secret data. Fake HMRC sites were the most prevalent. Sadly, today’s report won’t include attacks by ‘hostile state actors’ such as China, North Korea or Russia. But this is the first time we’ve had information about “commodity attacks” that caused “the majority of people the majority of harm”.
SUNDAY SHOWS ROUND-UP
Had a lie-in? Got a life? Catch up with our quick round-up of the Sunday politics shows HERE.