Brexit day 14: 'Michael doesn't mind taking a good thrashing from Theresa'
Conservative leadership: May and Leadsom go forward. Anything could happen in the membership vote.
The results are in from the second – and final – round of MP voting and as expected the result is a very handsome win for Mrs May.
2nd Round Votes:
Theresa May: 199 (60.5%)
Andrea Leadsom: 84 (25.5%)
Michael Gove: 46 (14.0%)
Stephen Crabb: OUT
Liam Fox: OUT
Michael Gove has been eliminated and May and Leadsom will now – barring some new travesty – go forward to the membership vote. It’s one member, one vote and you must have been a party member for 3 months to qualify. This means the Conservative party is on the verge of electing its second woman leader, and the nation’s second woman PM. Graham Brady MP, Chair of the 1922 Committee, confirmed that we will know the result on 9th September.
What next? Theresa May remains the favourite to win. However, there are absolutely no guarantees about how the membership will vote. Leadsom will push the buttons of a lot of traditional Tories: a leave voter, socially Conservative and promising to put issues like fox hunting back on the table. This adds a frisson of unpredictability to events. The choice of our future PM is now in the hands of perhaps 100,000 members of the Conservative party. A clear reminder that we live in a Parliamentary system, despite appearances to the contrary.
Tactical voting: Boles caught out
I mentioned that a stop Leadsom effort would likely be put into play by Team Gove. It reached its apotheosis (or nadir depending how you look at it) with Gove campaign leader Nick Boles’ message to May supporters which emerged yesterday evening . The Westminster village went bananas for the Sam Coates scoop:
I don’t need to interpret the message for you. But I will anyway:
From Nick Boles: You may not trust Michael Gove as far as you can throw him. And I completely understand why you are backing May. But if Leadsom wins we are in trouble. Look, Theresa is probably going to win. But we all know the half the members are bonkers and they might just vote for Leadsom. They voted for IDS and for goodness sake, and look where that ended up! I know you probably don’t want to talk to me and think this is desperate stuff. But think about it. Do you really want to live in a country run by Leadsom? Do you really want to serve in her government? As a sweetener Gove is going to be thrashed publically by May for two months and who won’t enjoy watching that? Just think about it OK?
The effort was spectacularly unsuccessful and apparently went down extremely poorly with MPs. Why did Boles send the message knowing that it would be leaked and could backfire? Possibly a last ditch effort, attempting to capitalise on the questions have been asked about Leadsom in recent days – in particular in relation to claims made in her CV. Leadsom fought back today saying the claims were ridiculous and gave an interview to BBC’s Laura K today to try to set the record straight. As a side note, the glare of scrutiny on Leadsom’s background is only going to get brighter in the weeks ahead.
Labour leadership
Owen Smith, indicated that he is a potential contender for the leadership in fabulously passive-aggressive statement today. It left all options open – from putting up a challenge all the way through to capitulation to Corbyn.
It is clear Smith is considering his options, as he has spoken to both Len McCluskey of Unite and Jeremy Corbyn ‘to explore could be done to prevent a split in the party’. McCluskey told Smith that talks between Corbyn and Tom Watson had been ‘productive’ and would go on into the weekend. Corbyn told Smith that he is engaging in talks ‘with an open mind’. This means the square root of nothing.
This cannot go on forever, despite the call from Len McCluskey to allow more time. So we ought now to be asking the question: is the coup failing? The longer Corbyn is dug in, the harder it is to depose him. He has already sat tight for pretty much two weeks, knowing that party rules protect him. And if he doesn’t want to go, who is going to make him?
UKIP leadership
What fun! Another leadership contest in which the putative candidates are trashing each other. This time its Nuttall and Woolfe. I can’t bring myself to spend to many words on UKIP so will let Guido keep you up to date. PS there’s also a row about whether to allow suspended Suzanne Evans to stand.
Future relationship with the EU
Foreign Secretary Philip Hammond gave evidence to the Foreign Affairs Select Committee today. The rights of EU citizens resident in the UK continues to exercise MPs – particularly leavers, bizarrely - and many want the government to give a unilateral guarantee of the status of EU nationals already resident here. The government is not offering guarantees, saying it can’t until reciprocity on the status of UK nationals living on the continent is offered by EU governments. In evidence, Hammond said that he would try to address the issue informally with EU ministers on Sunday but rather tartly pointed out that the EU had said there would be no informal discussion before Article 50 had been triggered. However, the prospect that these issues will not be discussed at an intergovernmental level in advance of Article 50 seems absurd to me.
Machinery of Government
If I’ve heard it once, I’ve heard it a hundred times in the last day or so. Why didn’t the Government do any contingency planning for a Brexit? It’s a good question, and for the most part it has been posed by proponents of Leave who seem irritated that there isn’t an oven-ready plan for Brexit. Philip Hammond told the Select Committee that this was because the Government did not want the plans to leak and therefore influence the campaign. However, there is a corollary of this question which is why arch Euro-sceptics, who have wanted this day for twenty years or more, had not spent time thinking about what the UK outside the EU might look like.
Companies and markets: banking special
Chancellor George Osborne and leaders of international investment banks released a statement on London as a world leading financial centre. Signatories said: “Britain’s decision to leave the EU clearly presents economic challenges which we are determined to work together to meet”. Further, they agree to “work together to identify the new opportunities that may now become available so that Britain remains one of the most attractive places in the world to do business” and “to help London retain its position as the leading international financial centre”. It was signed by the Chancellor, JP Morgan, Goldman Sachs, BAML, Standard Chartered, Morgan Stanley and Citi.
However, what is at stake was spelled out by JP Morgan Chase chief Jamie Dimon who said that the firm may move several thousand jobs from Britain if the country loses the financial services passport. He said “If we have that passport after Brexit, we likely would not have to make any change at all…But I think the European Union will not accept that. It will put more conditions on the U.K. and might force banks to become smaller in London.” J.P. Morgan employs 16,000 people across the U.K. That’s going to be an internal comms challenge!
I have been watching the Italian banking issue for a few days now as it is another issue bubbling away but over on the sunnier side of the EU. It looks a bit grim to me so I have been trying to look at coverage from outside the UK, to ensure that it isn’t unduly coloured by our own domestic fixation on Brexit. I turned to New York Times DealBook, which provides an excellent explanation of the problem and its potential solutions. The NYT says Italian banks need about $45 billion to shore them up if they write down the value of bad loans they are carrying. The Italian government’s solution is ostensibly simple – a taxpayer bailout to prop up the banks. However, post-crisis Eurozone rules bar such bailouts and insist that investors should take the hit, by converting their debt into less valuable equity (this is known as a bail-in). This is a logical step as it is supposed to stop taxpayers having to bail out banks and therefore to prevent moral hazard in the banking system. The problem is that in Italy most of the investors who take losses are ordinary retail punters – i.e. Joe Bloggs. This creates a risk that could then ripple into the wider economy. This sets up an impasse which has pitted Matteo Renzi against Angela Merkel. A deal is possible, but it looks like Italy’s banking sector is facing considerable upheaval in the months ahead.
The stock price of Banca Monte dei Paschi di Siena is down 80 percent in the last 12 months
Tweet of the day
Tim Loughton MP leads the revolution (follow the link to watch the video)
This reminds me of the old joke about Conservatives:What do we want? Gradual change! When do we want it? In due course!