1. FUDGE IT VOTE
The big Budget vote this afternoon has turned into a party discipline test. Not for the Government, but for the Opposition. Philip Hammond’s decision to fast-track income tax cuts certainly appeared to catch Labour off-guard on Monday. Backbench MPs and some in the Shadow Cabinet wanted to vigorously oppose plans that will undoubtedly benefit the better off. But the nature of the Chancellor’s changes means perks for higher earners are intrinsically bound up with help for lower earners, the very strivers that Labour has vowed not to hit with any new taxes.
Shadow Chancellor John McDonnell spotted the elephant trap early and refused to walk into it. He knows that Labour needs to hold on to all those voters that it won from the Tories in the 2017 election, including those who earn more than £50,000 but don’t class themselves as ‘rich’. McDonnell is also adamant he won’t break the party’s own manifesto pledge not to put up taxes on anyone earning less than £80,000. Still, as Theresa May’s ridicule of Jeremy Corbyn in PMQs showed yesterday, it’s difficult for Labour to simultaneously condemn a tax giveaway for the better off while refusing to oppose it in a Commons vote.
My understanding is that there’s no real split between Corbyn himself and McDonnell on the tax cuts strategy or tactics (and Stephen Bush has a nice piece on this HERE). But some insiders have been telling me for months about McDonnell’s frustration with the gatekeepers around the Labour leader, in particular his chief of staff Karie Murphy. During one particular row, the Shadow Chancellor was so furious that he pointed out that he was the one who was elected. With unions and most of the Shadow Cabinet backing his pragmatism, he’s in a strong position too.
Meanwhile, McDonnell is reassuring Labour MPs - and the Left - with a more radical policy to end Tory welfare cuts. There was a flurry of confusion yesterday on this (read the exchanges in full between Corbyn’s spokesman and reporters HERE), but last night McDonnell underlined the new commitment to introduce a “proper cost of living” uprating of benefits.
Labour plans to abstain rather than support or opposed the whole tax cuts package when the vote is taken just after 5pm today. In a last-ditch attempt to regain the initiative in presentational terms, McDonnell has drafted an amendment listing his proposal to impose a 45p tax on those earning more than £80,000. We will find out at the start of the Budget debate at about 11.30am if the Speaker accepts the amendment, but many think that unlikely.
As for the main vote this afternoon (income tax is ‘motion 5’, folks), I’d expect several Labour backbenchers to defy the whip and vote against the tax cuts to put clear red water between them and the Government, rather that fudge the issue. Of course, that’s exactly the kind of thing J Corbyn and J McDonnell would have done in years gone by. But as one aide put it to me yesterday: “We’re getting flak over what we’d do in government. People thinking we’re going to be in government is not a bad place to be in.”
2. REAL DEAL?
Suddenly, it’s November. And this is the last month for a ‘special’ Brexit summit with the EU. Dominic Raab caused a flurry of excitement last night with a letter to the Brexit Select Committee that suggested a deal would be in place by November 21. His department had to hose down the speculation, putting out a statement that “there is no set date for the negotiations to conclude”. But it looks like Raab was indeed simply confirming the mood in Whitehall that a deal could be imminent. The FT reports that the PM told attendees at a business summit at the Guildhall that progress would emerge ‘pretty soon’, while a minister adds the two sides are ‘pretty close’. The Times reports a tentative agreement has been reached on the key issue of financial services, based on ‘equivalence’ of rules.
The Northern Irish issue could still be a stumbling block, as could the EU’s plans for a ‘bare bones’ customs deal that could make independent trade deals difficult. Buzzfeed has a leaked note for EU diplomats revealing May is still being asked to accept the Northern Irish border ‘backstop’ plan. Cabinet Brexiteers and non-Brexiteers alike are waiting to see if Raab and Attorney General Geoffrey Cox will agree any compromise solutions that can be sold effectively to the DUP. It looks like next week will be the last time for progress on this if a special summit is indeed to be held this month.
And May still has the problem of getting this through Parliament in the teeth of serious doubts among her own backbenchers. David Davis yesterday clarified his remarks from Tuesday night, stressing that he had been misunderstood when he said ‘the fear of no deal…will win’. DD and the 40-strong hard core of Eurosceptics are holding firm, perhaps more so since his initial remarks, one source tells me. Meanwhile, Labour MP Kevan Jones joked to Davis that his wider attack on government policy on student loans and housing in the Budget debate amounted to a ‘leadership speech’. I’m told Davis quipped to Jones afterwards that it wasn’t much of a leadership speech if it was heard by only four MPs – the number in the chamber at the time.
3. DOING THE NOKESY-COKEY
Immigration minister Caroline Nokes’ car-crash performance at the Home Affairs Committee on Tuesday continues to cause political whiplash injuries, not just to her reputation but to that of the Government as a whole. Nokes had suggested that a no-deal Brexit would mean employers would have carry out ‘rigorous checks’ on EU citizens’ rights to work in the UK, though was unbelievably vague on what such checks would look like in practice. The Home Office’s second permanent secretary Shona Dunn, who often sounded equally clueless, then offered a telling remark that “the Prime Minister has been very clear that she would want free movement turned off at that point in time”.
Employers as well as EU citizens’ groups were both furious at the suggestion. Campaign group The3Million said the plan would plunge the 3.6m Europeans living here into a ‘hostile environment’. It would also create two indistinguishable classes of EU citizens with different sets of rights, they argued. Well, fast forward to last night and the Home Office issued a ‘clarification’ to the campaign group. “EU citizens will continue to be able to evidence their right to work by showing a passport or national identity card,” the Home Office stated. “Employers will not be expected to differentiate between resident EU citizens and those arriving after exit.”
To underline the point, Home Secretary Sajid Javid told ITV’s Peston programme: “We’ve just got to be practical. If there was a no-deal, we won’t be able to immediately distinguish between those Europeans that were already here before March 29, and those who came after — and therefore as a result I wouldn’t expect employers to do anything different than they do today. There will need to be some kind of sensible transition period.” It’s all a timely reminder that ministers are running out of road on some of the big issues on Brexit. The logistical challenge of registering millions of EU citizens will make Universal Credit look like a picnic.
4. CORE BLIMEY, GOVT
Lots of newspapers have splashed remarks by Sara Thornton, the chair of the National Police Chiefs Council (NPCC), that forces should focus on ‘core policing’ and did not have the time or resources to report misogyny or investigate historic allegations of abuse against the dead. Surely the main issue here is the Government cuts which mean police are overstretched, rather than ‘political correctness’? And with a raft of reports recently laying bare the sheer, daily epidemic of harassment women and girls face, isn’t part of the police’s ‘covenant with the public’ (Thornton’s phrase) to help tackle that too?
5. CROUCHING TIGER
DCMS minister Tracey Crouch is famous within Whitehall and Westminster for being one of the nicest, yet most independent minded, of ministers. The Telegraph reports she is on the brink of quitting in protest at the Treasury’s fresh delay to a crackdown on fixed-odds betting terminals. In another buried nasty in the Budget, plans to slash the maximum stake from £100 to £2 have been delayed by six months after heavy lobbying from the betting industry. Crouch, who is also the Government’s loneliness minister, is on her way back from a trip to the US and due to land in the UK today. Let’s see if the PM can do anything to persuade her to stay.
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