1. THAW’S HAMMER
It’s PMQs day again and both Theresa May and Jeremy Corbyn are not short of ammo to lock and load as they prep for the despatch box. May will be hoping the jobless stats at 9.30am keep up their incredible run on low unemployment. She may also be itching to raise Corbyn’s, ahem, varying statements on Brexit. For his part, the Labour leader could raise fire chiefs’ calls for sprinklers in tower blocks, problem gambling, the NAO’s damning homelessness report or tuition fees.
But the thawing public sector pay freeze, and possible strikes, could well dominate. If the average weekly earnings figures show a continued squeeze, Corbyn could use that and rising inflation to ram home the message that most workers are still struggling with real terms wage cuts. Politically, Corbyn has to balance taking credit for May’s shift with a demand that much more action is needed.
May may not be able to resist Len McCluskey’s claim last night that he’s no different from Gandhi or Mandela in fighting unfair laws such as those curbing strikes. I’d be amazed if she didn’t ask Corbyn if he backed either McCluskey on ‘illegal’ action or his shadow Brexit minister Paul Blomfield, who told the BBC yesterday: “We are a party that respects the law.” Can Corbyn really shift the narrative on strikes, as he has on other areas of policy?
Still, No.10 was clearly stung yesterday by the backlash to its big reveal on the melting pay cap. Prison officers still threatened action despite their 1.7% rise, and the cops weren’t over the moon at getting a 1% lump sum top-up. Downing Street was surprised that the Cabinet’s announcement hadn’t ‘landed’ better, but maybe that’s because the Cabinet’s language was so opaque. On the 2018/19 settlements for other workers, the PM’s spokesman told us the Cabinet recognised the need for “more flexibility”, but you can’t pay the bills with flexibility. What’s amazing that is that ministers were amazed a grateful nation didn’t leap up with joy.
It doesn’t help No.10 that the Treasury is playing hardball, demanding “evidence” of recruitment and retention problems before relenting in the Budget. We revealed this summer that Hammond would prefer departments to fund pay hikes with savings or cuts, but as police minister Nick Hurd found out at the hands of Kay Burley yesterday, that is a hard sell (Hurd even said ‘[police] forces are…not appearing to have a problem with recruiting’). The Times reports an OECD study showing teachers suffered a 12 per cent fall in the real value of their pay over the past decade. So why no rise for them, given their new pay kicks in at the start of the school year in September (the same time as police and pay rises)?
2. TAKING BACK CONTROL
One fascinating subplot in the end of the 1% pay cap is the role of the DUP, which has long argued for a rise for workers. We reported that its MPs were set to vote to back Labour’s Opposition Day motion calling for an end to the pay cap for NHS staff – and they made their case to ministers ‘behind the scenes’. Shadow Health Secretary had cannily worded today’s motion to match exactly an Early Day Motion that had attracted the support of the DUP’s Jim Shannon and Jeffrey Donaldson. Of course, it was pressure from voters and Tory MPs that drove May’s decision, but the Northern Irish party’s influence is clear to many.
As I revealed in the WZ yesterday, Labour has also forced a vote today on student tuition fee rises. Again this is a shrewd policy area to push, as the DUP are unhappy about the hikes. Labour was convinced its motion would be binding as it was ruled in order by the Speaker’s office, but the Commons authorities now say it has no legal effect.
Ministers were relieved by that, but as ever these days, this is about ‘optics’. Tory MPs, in fact all MPs, have to cope with online pressure groups like 38 Degrees bombarding them with claims they didn’t back this or that motion or vote in Parliament. (Tories are guilty of it too, claiming any Labour MP who doesn’t vote for the EU Withdrawal Bill is ‘against Brexit’). That’s why you’ll see a fair few abstentions today on both the pay cap and the uni fees motions: not voting looks better than voting against.
One vote that was not about ‘optics’ but about brute power was on the Public Bill Committees last night. After various shenanigans during the day, the vote was held and the DUP delivered. The Tories have indeed shown they can ‘take back control’, and now have a majority on crucial legislative committees. As Jacob Rees-Mogg pointed out in the debate last night, Labour’s wily former deputy chief whip Walter Harrison staged his own similar power-grab in the 1970s on a quiet Friday rather than a busy Tuesday. More than a few Labour MPs smiled at that memory.
And the memory of governing may feel increasingly distant, the more this five-year Parliament grinds on. Don’t forget that by 2022, it will have been 12 years since Gordon Brown was in power. Labour may be getting smarter and sharper at Opposition, but thanks to the Fixed Term Parliaments Act, it’s still in Opposition for the foreseeable future.
3. BREXIT BLUES (AND REDS)
It’s unclear how much Brexit will feature in PMQs, though Jean-Claude Juncker’s ‘state of the Union’ speech could give May a chance to say ‘see, that’s what we were dealing with’. Her own Big Speech later this month (which seems to have put back our September negotiating round) is the main thing preoccupying many in No.10.
As for the big picture, the Commons’ guilty secret is that there is actually a lot of agreement between the bulk of ministers and Labour over the basic need to get a Brexit that tries to keep current trade benefits while creating a new migration system. And former Brexit minister and Tory veteran (despite his youth) Lord Bridges last night summed up in the Lords his common-sense pitch: we pay a fair amount in a divorce bill and in return get a transition period until the end of 2020.
Meanwhile, fears that we are heading for a ‘car crash Brexit’ (it’s the Remainers’ new ‘cliff-edge’, folks) were sparked by Toyota telling Reuters yesterday there would be ‘a big question mark’ over its British factories if it had to wait two years for clarity on trade. Business Secretary Greg Clark, who worked hard to get carmakers on board, will have gulped hard at the firm saying a ‘trade tax’ was now not off the table.
Yesterday, Philip Hammond stressed just how important it was not to have any new customs delays, saying even a few minutes’ backlog at Dover could cause chaos. Yet he revealed the EU was not even willing to enter into discussions about a future customs system with the UK – even on a technical level – at this stage. The Chancellor also told peers the transition period should “look a lot like the status quo”. Will Tory Brexiteers go for that? Many have kept their powder dry so far and will look to David Davis and Steve Baker for reassurance this isn’t really a Hotel California Brexit (you can check out but never leave).
Tory whips are sure to try to seize on Corbyn’s own misspeaking on whether staying in the EU was still an option. There’s a big push among some Tory and Labour MPs to go for the EFTA or Norway option. But in an interview with HuffPost UK, Andy Burnham sounds his own warning that Labour ignores its northern Leave voters at its peril. “We have to come up with a reform of free movement that addresses concerns and then allows maximum access or even membership…. It’s very important for people not to forget the referendum result…You have to remember why the result was the way it was, respond to it and keep as many benefits from Europe as possible…I’m not sure the Norway model would meet that test.”
We publish the full interview later, in which Burnham warns Corbyn he is not running a “branch office” (remember Scotland?) and the party should not snuff out its northern voices. And on that, it’s clear he’s baffled as to why he’s not speaking at the Labour conference.
4. CLUELESS ON HOMELESS
For all David Cameron’s attempts to ‘detoxify’ his party’s approach to the poorest, on homelessness he has clearly failed. And today we see a truly withering report by the National Audit Office on the Government’s lack of strategy since 2010. The NAO says the Conservatives’ ‘light touch’ approach to solving the problem has failed and there are no proposals to properly assess the impact of welfare cuts on people losing their homes.
Since 2010, the number of people living on the streets has more than doubled and the number of households living in temporary accommodation has risen by more than half. The spending watchdog said it was “difficult to understand” why the Department for Communities and Local Government had persisted with its current approach to homelessness “in the face of such a visibly growing problem”.
Meanwhile, on welfare more broadly, there’s another idea that was once ridiculed but which Corbyn is getting on the agenda: a universal basic income. And one of the most fascinating revelations in Hilary Clinton’s new book is that she seriously considered backing it last year. Clinton cites the Alaska model where every citizen is written a cheque based on the state’s oil revenues (true fact, folks), but wanted to add in a tax on the financial service industry and go nationwide. “Unfortunately, we couldn’t make the numbers work”, she says, but now tells Vox it’s worth another look.
5. STAKES SANDWICH
Another area where Labour has pushed hard – and where it could claim credit if ministers change tack - is on problem gambling. The party has campaigned for serious curbs on the ‘crack cocaine’ of fixed odds betting terminals, and Philip Hammond has been hinting that he may relent. Some in Labour felt that it used to be too much in hock to the gambling industry and it has in recent years acquired the zealotry of the convert.
The FT has the scoop that the Government’s review due next month could see gambling giants lose huge sums in annual revenues with radical reform. It has got hold of the key options drafted so far: reducing the £100 maximum stake to £2 as demanded by activists such as the Campaign for Fairer Gambling, or compromise figures of either £30 or £20. There is a no change option, but few think May or Hammond can back that.
Barclays have forecast that Ladbrokes Coral would lose £449m in revenues from FOBTs in 2018, if the maximum stake was reduced to £2. William Hill would lose £284m, while Paddy Power Betfair would lose £55m. What doesn’t help the bookies is stories like that yesterday, when Ladbrokes was rebuked by ad watchdogs. It had sponsored an online “fake news” article that claimed that a man with £130k debts from his wife’s cancer treatment had solved his problems by gambling and winning £700,000 - after making a £10 bet with Ladbrokes. Tasteful, huh?