1. TERROR FIRMER
It’s PMQs day again and we may well get more post-Budget action as Theresa May and Jeremy Corbyn trade insults over economic competence. The PM’s premature declaration of the end of austerity (yesterday she had to use the Chancellor’s formulation that it is ‘coming to an end’, not that it is ‘over’) is an easy target. May could in turn cite John McDonnell’s support for tax cuts that Corbyn and the Labour frontbench have savaged as a bung for the rich.
Yet the Budget was only a brief respite from the really big issue of Brexit, and whether the PM can get her deal approved both by the EU and Westminster. And at home and abroad, there could be reasons to be cheerful for No.10. In Brussels, Michel Barnier is meeting EU ambassadors today and may have an update on the UK’s plans to solving the Irish backstop issue. As for Parliament’s possible opposition, May’s allies were delighted by what sounded like an admission from a leading Brexiteer that she could squeak her Chequers deal through the Commons.
Yes, David Davis told an IEA event last night that: “The fear of no deal … will win, and there will be a deal…Terror will win”. Davis stressed he thought that MPs worries about going on to WTO [World Trade Organisation] terms was an ‘irrational fear’. He also had a caveat that the deal could ‘fail’ in Westminster even if it was passed in Brussels. But perhaps most telling (as SkyNews reports) was the reaction of fellow Brexiteer Steve Baker in the audience, as DD uttered his ‘terror will win’ line. “Don’t say that,” Baker muttered. If this is a triple-bluff by the European Research Group, it’s a high risk one. It’s also fitting that today, on Halloween, the biggest asset No.10 has for its Brexit plans is sheer fear: Tory MPs scared of a no-deal and scared of a Corbyn government.
Downing Street was also cheered by Norway’s PM Erna Solberg cautioning against the tempting idea that the UK could adopt a ‘Norway for now’ answer to its Brexit problems. Solberg said it would be ‘difficult’ for the UK to join the European Economic Area (EEA) once it leaves the EU. And in a briefing note, the People’s Vote campaign also listed a raft of flaws in the Norway plan, not least on customs, Northern Ireland, European courts and fisheries policy. This is a problem not just for Tory MPs like Nick Boles, but also the 75 Labour MPs who broke the whip to back EEA membership. “The Norway model was never the way forward for manufacturing or Northern Ireland,” one Labour source tells me. With few Tory MPs likely to back Labour, No.10 hopes of winning that ‘meaningful vote’ may be on firmer ground than for some time.
2. CHANCER OR CHANCELLOR?
It’s Budget Day 3 and journalists, unions and think tanks are still highlighting more nasties buried in the Red Book. The Telegraph and the Mail have seized on a national insurance rise that will wipe out half the income tax cuts he trumpeted, dubbing it a ‘stealth tax on middle England’. And it’s a former Lib Dem minister who is twisting the knife. Sir Steve Webb, now director of policy at Royal London, says Hammond “conveniently forgot to mention he was simultaneously increasing the National Insurance Contributions of millions of higher paid workers”.
In our own ‘Buried Little Extras’ piece on Monday night, we highlighted that the NI rise would claw back some of the tax cut for higher earners. The new detail is the precise figure showing that £730 in lower taxes will be counterbalanced by £365 in more NI payments. The better off still have a net gain much larger than those lower down the income scale, but that’s not deterred John McDonnell from saying Labour will not oppose the tax cuts package in a vote tomorrow. He went further, telling a media briefing he didn’t want to “take money out of people’s pockets”.
The Shadow Chancellor has got some flak, but (like Ed Balls before him) he clearly sees the tax cuts vote as an elephant trap. If the party votes against the tax breaks, it will look like it wants to hike taxes on low and middle earners – and break its own 2017 manifesto pledge not to do so. So, he’s sticking rigidly to his policy of slapping new taxes only on those earning more than £80k. McDonnell must be delighted that the ‘row’ with some in his party actually allows him to repeat Labour’s policy of hitting only the really ‘rich’.
Today Corbyn could quote Evening Standard Editor George Osborne (yes, him again) as a convert to his cause. Although the former Chancellor said the Tories can’t ‘out Corbyn Corbyn’ on spending, he did admit on Newsnight that he backed the “19th century Marxist” view “that an economy where the returns to capital are much greater than the returns to labour, is one where support for a capitalist economy is going to decline”. He added: “If you’re a centre-right politician…or indeed a centre-right newspaper [I’m not sure all Standard hacks will relish that description of their paper, by the way]…you want to be moving into that space.” Polly Toynbee then launched a withering attack on his ‘despicable’ welfare cuts. “I like the fact that your newspaper now runs a campaign for poor children in London, which is hypocrisy beyond…anything human.”
3. CREDIT LOSS RATIO
One thing Osborne didn’t apologise for last night was the way he slashed benefits. He said it would have been “a bit odd” to leave out from his austerity drive “the very large chunk” of government spending on welfare. Well, after his successor pumped an extra £2.7bn in to Universal Credit, many Tories are hoping that the worst of the political pressure is now over. But critics are still warning more action is needed to avoid the worst impacts of the new scheme. In the Budget debate, Frank Field said people were still being ‘pushed towards destitution’ and demanded payments of ‘legacy’ benefits right up until the point when UC kicked in.
And the scheme’s roll-out is continuing. We revealed last night that the new system will be introduced to North Kensington JobCentre on December 12. That’s the job centre that serves the area including Grenfell Tower, and local MP Emma Dent Coad says she is ‘dreading’ the impact. The roll-out to the Grenfell area was postponed in the immediate aftermath of the blaze that killed 72 people and left hundreds homeless last year. It emerged this week that 151 survivors of the fire were still in temporary or emergency accommodation.
Meanwhile, the union Unison has this morning identified another item buried in the Budget. The boost in ‘work allowance’ for the working poor on Universal Credit will not apply to the childless or to those “empty nesters” whose children have left home. The debate over family structures reignited last night too as Tory backbencher Michael Tomlinson said marriage appears to be disappearing in Government policy-making “just as much as it’s disappearing in our poorest communities”.
BECAUSE YOU’VE READ THIS FAR...
Watch this cat make an unscheduled appearance on Channel 4 News last night. The response from its owner was firm but fair.
4. NOT SO MAD
Could there finally be a breakthrough at last in efforts to secure a ceasefire in Yemen? US Defence Secretary General James ‘Mad Dog’ Mattis has teamed up with Secretary of State Mike Pompeo last night to urge a cessation of hostilities ‘in the next 30 days’. They called on the Saudi-led coalition and the Iranian-aligned Houthis stop their respective aerial and missile attacks in the country. Mattis avoided directly linking the new pressure on the Saudis with the murder of journalist Jamal Khashoggi in the Saudi Consulate in Istanbul, but that will be the inevitable conclusion drawn.
5. CALL ME, ISHMAEL
Ishmael Osamor, the son of Shadow Cabinet minister Kate Osamor, last night quit as a Labour councillor in Haringey after pleading guilty to having £2,500 of drugs with intent to supply at a music festival. He is also employed at taxpayers’ expense as a communications adviser to his mother. Anti-sleaze watchdog Sir Alistair Graham suggests in the Times that Osamor should “move quickly to take her son off the payroll”. It’s a reminder that from 2020 MPs will be banned from hiring relatives using public money. Meanwhile, Labour is conducting an inquiry into how he was selected as a council candidate without the party being aware he had been arrested.
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