Brexit Day 11: 'She’s eerily reminiscent of Thatcher, circa 1974'

Tory leadership contest: back to the future

The competitors were all over the weekend papers and all over the TV studios and I won’t recap all the stuff flying around. The bottom line is that May and Leadsom enter this week with the momentum. The two favourites are grammar school girls, have a strong Christian faith and are both in their fifties. It all sound very familiar.

Simon Jenkins commented that Leadsom’s performance at her launch today was eerily reminiscent of Thatcher, circa 1974: ‘There was the same tilt of the head, the same slightly forced smile, the same confidence in mouthing the cliched necessities of politics. And there was steel. Leadsom clearly regards Theresa May as potentially weak on EU negotiation.’

That’s not the only part of it that is redolent of Thatcher. Total Politics has an interesting story on Leadsom’s team which includes staunch Thatcherite Lord Bell and tabloid veteran and PR man Nick Wood. Tim Loughton has been made campaign manager and Chris Heaton-Harris has taken the role of garnering support in the Commons. Potential bump in the road: Leadsom has refused to publish her tax affairs, though will do so if she reaches the final two, she says.

For aficionados of the political interview Andrew Marr gave Michael Gove a pasting on Sunday, including the memorable line that he was seen as a ‘political serial killer’. A supporter of Boris said that Gove had ‘emotional need to gossip’, especially after a drink, and was therefore unsuitable for Prime Ministerial office. Revenge will be served up in tapas-sized servings in the days ahead I am sure. However, Gove should not be written off. If he can get through tomorrow, he may be able to pick up votes from the eliminated candidates and perhaps, maybe, get to the final two.

To the ballot…May carries a lot of the support of MPs who have declared now and big beasts such as Michael Fallon and Philip Hammond are now backing her. According to Guido 96 have declared for her, 36 for Leadsom, 25 for Gove, 22 for Crabb, 8 for Fox. 143 are undeclared. Of course allegiances can switch and many have yet to declare their support. Guido’s numbers.

Chart of the day

The most unpredictable part of the leadership contest is the membership. May is almost certain to be one of the last two, but will she pass muster with the faithful? Here’s the last survey of members by Conservative Home and it’s a ripsnorter. Activists want Leadsom v May in the final, says Paul Goodman.

The first round of the leadership ballot takes place tomorrow afternoon. We should know who has been eliminated by around 7pm. The second round takes place on Thursday, and the final two should be known by a week tomorrow in advance of the membership ballot.

Rights for EU citizens

Quite a lot of handwringing about rights for existing EU citizens today. Leave campaigners Leadsom, Boris and Gisela Stuart have all insisted that the rights of EU citizens already living in the EU must be protected and that they should not be used as pawns in the negotiation. Forgive me, if for one moment, I express some bafflement about this. Many of my colleagues and friends are EU citizens. So I will make the simple observation that the very conduct of the Leave campaign, predicated as it was on immigration from the EU, made many of them feel unwelcome and uncertain in the country where they work, live, have relationships and pay taxes. Brexit by definition does put their status in question. That was the whole point wasn’t it? The government sets out its position in response to an urgent question on the matter from Gisela Stuart...

Rt Hon James Brokenshire MP, Minister of State (Home Office) (Security and Immigration):

EU nationals should be assured that there will be no immediate change to their status in the UK.
Decisions relating to the UK’s exit from the EU will be left to a new PM, so I’m not in a position to make new policy announcements this afternoon.
It has been suggested that Government fully guarantee rights of EU nationals in UK now, but this would be unwise without a parallel guarantee regarding British nationals living in their country. This also might have unintended consequence of prompting EU immigration to the UK.
Government will not stand for attacks/hate crimes on EU nationals.
Repeatedly asked what judgment he has made to protect interests of EU citizens and British citizens working/living abroad, Brokenshire responded that making guarantees now could prove an impediment for future negotiations regarding British nationals abroad.
Need to act with care, consideration and thought.

Theresa May has refused to make any guarantees at this stage, saying that they can’t be offered until there is reciprocity from EU member states. This matter is certainly controversial and will be the cause of quite the battle.

Labour leadership: Blessed are the peacemakers

The unions have kindly offered their services to broker a peace between Corbyn and the PLP. Anyone watching the appalling plight of Southern Railway passengers may be sceptical about this. The honest broker status was slightly undermined by Manuel Cortes of the TSSA union who told Today that the PLP was behaving petulantly and that it was time to ‘put up, or shut up’. A deal could see Corbyn emerge in party chair type position, with a different leader of the PLP. All the while the threat of de-selection hangs over MPs. Some speculate that Corbyn is looking for his day in the sun when Chilcot is published. He will surely go after Blair.

UKIP: Farage resigns

‘Is this a joke?’ asked one client. No, it’s not. On Friday I suspected Carswell would be booted out of UKIP and go back to the Tory fold. Today there is a chance he could become UKIP’s leader. What on earth is going on? Farage has resigned the leadership (not for the first time) because ‘he wants his life back’ having ‘done his bit’ though he has gamely also offered to help independence movements in other parts of Europe. Can we take Farage at face value or is he really ready to step back just a week after securing his life’s ambition?

Douglas Carswell was gutted to hear heard the news…

N.B. Andrea Leadsom refused to rule out a role for Farage as a Brexit negotiation at the weekend but said in her launch today she had no allegiance to UKIP. Her opponents will doubtless try to infer that she has done a deal with Nige to bring him on board in some capacity. There’s some naughty things going about on social media…

Future relationship with the EU

Philip Hammond has set out a clear exposition of the trade-offs involved in our EU negotiation. ‘It is already clear what the central trade off with the EU will be: access to the single market versus freedom of movement of people. Those who believe there is no need for such a trade-off have misunderstood something fundamental about the politics of the European Union’ the Foreign Secretary writes. In the same piece he places his support behind Theresa May, saying it’s time for a dose of good old-fashioned British pragmatism.

Alain Juppe, a hopeful for the French presidency next year has thrown in his two cents’ worth. He says everything is up for negotiation. He suggested that compromises could be made on free movement – though the million euro question is what price he would be looking to extract for this compromise. He also called for border controls to move to British soil, reversing a treaty between the two countries.

Article 50 corner

Law firm Mishcon de Reya is to launch a legal challenge on behalf of unnamed clients in relation to Art 50. The firm and its clients think that Parliament must get a debate and vote on Article 50 under our constitution. The general assumption in Government has been that the PM has the powers required without reference to Parliament. Mishcon de Reya, said: “The result of the referendum is not in doubt, but we need a process that follows UK law to enact it. Article 50 simply cannot be invoked without a full debate and vote in parliament.” This is an interesting move – but I can’t quite see what the end game is here for those bringing the case forward. The lack of transparency about the backers of the legal action must also raise eyebrows.

Second referendum, second election?

Lots of people asking about the chances of either or both of these events happening. These issues require a bit of time, so I will come back to them later in the week when – hopefully – the newsflow slows a bit.

HMS Osborne surfaces

Officer of the watch, blow the tanks. We’re going to surface. At the weekend Osborne set out a five point plan for the economy, including – predictably – a proposed cut in the corporation tax rate to 15 per cent (a shade above Ireland’s 12.5 per cent). While this will irritate EU neighbours mightily, it is simply an extension of a long-standing government policy. Osborne’s words at the Budget on corporation tax were these: “all the evidence shows it’s one of the most distortive and unproductive taxes there is” so this comes as no surprise. The chancellor is clearly looking at eye catching measures to boost UK competitiveness outside of the EU. I’ve said before that Osborne is difficult to hold down for long – a Chumbawamba Chancellor if ever there was one.

Where next for the Remain and Leave campaigns?

The Leave side has flamed-out dramatically over the past week. Just over one week after winning victory against all the odds, its leading figures have had a torrid time. Bo Jo has gone, Gove has had a very rough week, and Farage has resigned. The only person who has capitalised is Andrea Leadsom, the unknown quantity. Quite extraordinary that the winning side has disintegrated like this.

Boris Johnson’s Sunday piece in the Telegraph left me perplexed. Entitled Tory candidates need a plan for Brexit - here's mine in 5 points he devoted the first 500 of his 1,000 words to criticising the the Islington Corbynistas who had shouted ‘****’ and a ‘******’ at him last week. ‘They can’t really be defending the waste, the fraud – or the endless expensive caravan of crémant-swilling members of the European Parliament between Brussels and Luxembourg and Strasbourg’ he posits. In his way he makes some important points about the defects of the EU. He then went on to attack Project Fear, Bob Geldof and called Saturday’s remain marchers deluded. However, what we still didn’t see was any vision. It is a rum state of affairs when some of those who wanted the UK to Remain have a more developed plan for the UK’s future outside the EU than some of those who fought for it.

Eagle-eyed Henry Mance spotted that the Leave Campaign wants to become a permanent fixture on the political scene saying ‘Westminster can’t be relied upon’. Judging on the performance of our political class last week, they may have a point:

Last week Will Straw, director of the Britain Stronger in Europe campaign also suggested that there would be future for the organisation – though under someone else’s leadership. I find it hard to see how that group can work in the future, but I will wait and see.

That Boris Johnson plan in full…

There is no risk whatever to the status of the EU nationals now resident and welcome in the UK, and indeed immigration will continue – but in a way that is controlled, thereby neutralising the extremists.
It is overwhelmingly in the economic interests of the other EU countries to do a free-trade deal, with zero tariffs and quotas, while we extricate ourselves from the EU law-making system.
We can do free-trade deals with economies round the world, many of which are already applying.
We can supply leadership in Europe on security and other matters, but at an intergovernmental level.
The future is very bright indeed. That’s what Geldof should be chanting.

Machinery of Government

Carswell and Hannan spent the weekend castigating our politically neutral and professional civil service for failing to drink the BeLeave Kool Aid. Said Hannan to the Mail: 'They are incurable Europhiles, and all they want is to try to keep the EU project together. After the palpable failure of the supposed renegotiation with Brussels, it's beyond ludicrous to put the same people in charge of our Brexit negotiations.' He added 'I know Ivan Rogers [UK Ambassador to the EU], and enthusiasm for the European project permeates his entire mentality. He and other civil servants are clever, technically brilliant and, in their own fashion, moral people. But they are simply playing for a different team.'

On that the subject of the Civil Service, Bernard Jenkin MP, one of the staunchest of the Conservative Leave crew and chairman of the Public Administration and Constitutional Affairs Select Committee has been asked by Brexit minister Oliver Letwin to look at how Whitehall can prepare for the demands of leaving. Bernard Jenkin has called for a Dad’s Army of retired civil servants to return to the fold.

Chilcot’s coming…on Wednesday. The Indy says a number of MPs are seeking to impeach Tony Blair through an ancient Parliamentary law. Henry Mance’s instructive Big Read in the FT neatly brings together Chilcot and Brexit with the following observation from Rory Stewart MP: “The line linking Iraq and Brexit is a total lack of seriousness, commitment and knowledge in our foreign policy machine” …“The economic mess we’re in now [after the EU referendum] is entirely caused by our foreign policy.” Stewart’s solution? A doubling of the Foreign Office budget.

Trading places

Business ministers Sajid Javid and Lord Price have written to businesses and trade associations to help shape future trade and investment policy and to ask views on what UKTI can do to help. Chief Executive of the Intellectual Property Office John Alty, has been asked to lead a team tasked specifically with engaging with businesses of all sizes on trade policy issues. Guessing that those funding cuts to UKTI might get reversed in the near future… The first meeting of the new inter-ministerial group on business engagement, chaired by Mr Javid, will be held next week.

Companies and Markets

A really troubling problem in Italy bringing further evidence of tensions between member states and EU institutions. Italy’s Matteo Renzi is on the verge of defying the Brussels to provide liquidity to Italy’s struggling banking system if needed. This is a serious challenge to the authority of the European bank stability regime. A view from Zero Hedge: ‘As we noted previously, Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential "Italeave."

A number of commercial property funds have marked down their assets in the last few days on the back of Brexit following advice from valuers. The typical markdown is 5 per cent. The Evening Standard ran a piece on Friday about London house prices ‘being slashed’. I mentioned that gazundering might be back, and the ES piece reflects that. Get those bargains while stocks last. I’ll be looking out for stories on house prices from the rest of the country to prove that I am not obsessed by the London bubble,

Dislocation in the sector is echoed by some grim news from the Construction industry. Markit’s UK construction Purchasing Managers' Index dropped to 46.0 in June, down from 51.2 in May, its lowest level since June 2009. This shows a strong expectation of contraction and the numbers are worse than expected. Construction has one of the highest multiplier effects of any industry sector. Markit’s Tim Moore speculated that this would boost the case for a BoE stimulus package.

Jean-Sébastien Jacques, incoming chief executive of mining giant Rio Tinto gave a vote of confidence in London in the Times today: "Do I believe London is a very good place for a head office in the mining industry? Absolutely, no doubt about it. Brexit will have no impact on the head office being in London. We love London."… "All the big mining companies are listed here"… "Do I feel comfortable here? Yes, you've got the right understanding with the banks, the financial industry. It's a truly global city. We're fine." [Full disclosure: Rio Tinto is a Cicero client]

Martin Waller, Tempus editor, suggests that after the LSE/Deutsche Borse tie-up the exchange may move to a neutral location. Amsterdam. Time to drink the Grolsch.

Look out: Tomorrow Bank of England publishes its financial stability report.

A note on the FT

I seem to recall reading an attack on the FT at the weekend for having taken leave of its senses, being a Remain Pravda etc. I think it was in the Mail (where else?). I agree that in the early days after the Referendum the paper did seem to have a bit of a nervous breakdown – particularly its columnists who just seemed to wail and gnash teeth. But the quality of reporting has been excellent the last few days. There was tons of good stuff in the Weekend edition.

Reshuffle

Could Nigel Farage take Chris Evan’s place as host of Top Gear?

Video of the day

Following the success of his video for Vice News, Jeremy Corbyn is appealing directly to the membership with a new video saying why he should remain leader of Labour.

http://news.sky.com/story/1721509/corbyn-stages-fightback-with-facebook-video