Brexit Day 25: 'as clear on the general direction as it is naive about the technical details'

It was good to take a day off on Friday – and the Prime Minister’s trip to see the First Minister in Scotland gave some respite from reshuffle mania. The brutal terror attack in Nice followed by the attempted coup in Turkey reminded everyone of the tense security environment in Europe and on its borders – something that will no doubt be a theme in future bulletins.

Government reshuffle part 400

Every so often you are reminded just how many ministers and bag carriers there are. More than a third of the Conservative party’s 330 MPs are on the ‘payroll’ in some way – from Secretary of State down to PPSs. Theresa May’s reshuffle was pretty much completed today and what a remarkable number of resignations, sackings and demotions there have been. Looking at the list, the phrase ‘de baathification’ springs to mind. There is not a single minister in the Cabinet Office who remains in the department. The Business and Communities departments have only one minister remaining in position.

Even if dilettantism is a hallmark of our political system, the mismatch between previous experience and ministerial postings is as striking as the lack of continuity. David Cameron left ministers in post as far as possible allowing them to master their brief. Ed Vaizey’s return to the backbenches tells a story about the new May government. Vaizey is an arch-Cameroon so was vulnerable to the cull. But he was a well-regarded as minister for culture and the digital economy, held the post for six years and loved the job. He was even respected by the arts world, which for a Tory minister is quite something. You might have thought he would survive. But he was sacked. He amusingly coined the phrase #vexit.

Reshuffle chat

The new Economic Secretary to the Treasury (City Minister) – Simon Kirby has no experience in banking or finance. But does have a business background – he established a local radio station in the Brighton area as well as being involved in the pub and nightclub business. He studied at LSE, which means he must be a decent sort.
Mark Garnier, long-standing member of the Treasury Committee finally gets a ministerial gig in the Department of International Trade. Slightly peculiar that given his finance background he didn’t end up in Treasury as the City Minister. I am beginning to wonder if the top of the shop has decided to keep bankers away from financial policy. Nevertheless he has an important role flying the flag and we wish him well.
Ros Altmann, the minister of state for pensions has gone, but the new minister, Richard Harrington, has the more junior rank of Parliamentary Under Secretary. Former pensions minister Steve Webb - who now works for Royal London - said he was ‘stunned’ by the news that the role had been downgraded. The DWP confirmed to the FT’s Jo Cumbo that Harrington would have the same responsibilities as Altmann. Aberdeen Asset Management’s Gregg McClymont (a former Labour pensions shadow) welcomed the appointment saying he was a ‘smart guy. Good on detail.’ Altmann is known for being outspoken. Now she’s outside collective responsibility she may present a challenge to the government from the Lords.
With the promotion of David Gauke to Chief Secretary of the Treasury, a well-placed reader in the Treasury told me that it’s time to #uncorkthegauke. His replacement as Tax Minister, Jane Ellison will have to fill the shoes of a genuine expert.
The new Business Enterprise and Industrial Strategy department sees Jesse Norman, previously Chair of the Culture, Media and Sport Committee join government for the first time. He’s best known for giving bankers a hard time during his stint on the Treasury Committee and pursuing the issue of doping in sport more recently as chair of the CMS committee. This is an interesting appointment – Old Etonian Norman is one of the intellectuals behind the Cameron project yet was never a minister under the Cameron leadership. His willingness to defy the party whip on issues such as Syria may have contributed to this.
Boris Johnson will have to share the Foreign Secretary’s grace and favour country residence Chevening with Liam Fox and David Davis. The PMOS told the BBC that “It reflects the fact that all those secretaries of state will, as part of their work, be meeting and engaging with and hosting foreign visitors and leaders.” She stopped short of saying that HMG will put it on Airbnb when it’s not is use to save money. Philip Hammond will move into a flat in number 10, Mrs May into number 11.
Going to be quite a few changes on Select Committees I should think – something to look out for.

Labour leadership

Colleague Simon Fitzpatrick writes…

At 5.00pm this evening the starting gun fired on the 48 hour race between the pro- and anti-Corbyn factions within the Labour Party to sign up as many ‘registered supporters’ as they can to save Jeremy or ‘Save Labour’, depending on their viewpoint. Since last year’s Labour leadership contest, the cost of registering as a supporter to get a vote has gone up from a bargain-basement £3 to an eye-watering 25 quid. Who says inflation is at record lows?

Meanwhile the Parliamentary Labour Party today held its first hustings, with Corbyn, Angela Eagle and Owen Smith all on the panel. As is now traditional for behind-closed-doors PLP meetings, it was being live-leaked throughout. According to the New Statesman's George Eaton, one former Shadow Cabinet member said that, of the ‘stop Corbyn’ candidates “Angela had the best lines” but “Owen had the passion and the policies”. The real battle at this stage is between these two to emerge as the clear ‘unity candidate’ to go on to a head to head with Jezza. Smith reportedly told the PLP that he’ll step aside if it becomes clear that Eagle has more MP nominations – a sure sign that he is confident he has more MP nominations – though Angela was quick to point out that the candidate with the fewest nominations is actually the incumbent leader.

Future relationship with the EU

Heads-up: The PM is going to Paris and Berlin on Wednesday and Thursday.

Brexit Secretary David Davis told Sky at the weekend that he wanted to a secure "generous settlement" for EU migrants already living in the UK. He said “They didn’t pick this circumstance, we did…We want to get a generous settlement for them. We want to do that at the same time we get a similarly generous settlement for British Citizens living within the EU.” However, he warned that the generosity of the settlement – leave to remain, pension rights – could lead to an influx of immigration. He said that a potential way to deal with that would be having a cut-off date after which new entrants to the UK would not be guaranteed such rights. That problem would be dealt with as we got closer to the time, he said.

A good piece from Wolfgang Münchau in the FT today which clearly and concisely sets out his interpretation of the UK’s Brexit options. I agree with his view that the Government appears to have all but ruled out EEA membership as a model (though no one has said it absolutely outright). He says the ‘master plan was as clear on the general direction as it was naive about the technical details’ – presumably referring to the David Davis withdrawal blueprint.

Emergency landing notwithstanding, BoJo has been in Brussels meeting European foreign ministers in his first major engagement as Foreign Secretary. He told the media that “We have to give effect to the will of the people and leave the European Union. But that in no sense means we are leaving Europe. We are not going to be in any way abandoning our leading role in European participation and co-operation of all kinds.” Interestingly, this Council meeting is the first time a US Secretary State has attended. The first glimpse of BoJo as serious politician? He has also given up his weekly Telegraph column (worth about 30 grand a month!) – this in itself will massively reduce foot in mouth potential.

YouTube genius CGP Grey has put together a fantastic video called Brexit, Briefly. Never one to shy away from a prediction, Grey says: ‘I give 30% odds to [this] option: literally nothing happens. The UK plays the stalling game forever, pretending to move forward while doing nothing. This politically tumultuous time becomes a trivia fact for a future video about how the UK has been in the process of “leaving” the EU for 100 years’. 1.2 million views already!

Liberal Democrats: moving on up

Tim Farron has expressed a huge vote of confidence in the future of his own party by proposing a new party. In what is clearly an overture to moderate Labour MPs he said that Tory and Labour parties sat in completely and utterly false and uncomfortable coalitions. The Guardian quoted him as saying that ‘in any other democracy in Europe those people wouldn’t be in the same party as one another – and quite a few would be in the same party as us.’ I wondered how long it would be before SDP 2.0 was floated by Farron. Naturally, the Lib Dem leaders does rather skirt the incoherence in the political philosophy of his own party – though with just 8 MPs now, it perhaps isn’t so much a problem as it used to be.

Scotland: to be continued

A fascinating dynamic in the Brexit discussion has emerged over the last couple of days. Talks between PM and FM happened at the end of last week with Theresa May saying that Article 50 would not be triggered until a UK-approach had been agreed. Nicola Sturgeon later suggested that this meant that Scotland had a veto over Brexit – a claim which was robustly knocked back by Team Theresa. Sturgeon later said that Scotland could hold another Indy Ref in H1 2017 if Art 50 was triggered There’s a lot going on here and we will come back to this in greater detail once things calm down a bit.

Trading places

TTIP is in trouble. Big trouble. In fact, according to Hans von der Burchard in the ever informative Politico, TTIP is politically dead.

At the same time Liam Fox is off to the US to meet Mike Froman, the US Trade Representative to talk about the potential for a UK/US deal. You can see a situation here where the lack of progress on TTIP may open the door to talks (though I am guessing the US could also use this as an opportunity to place pressure on EU leaders). Froman has said – quite sensibly – that the shape of any deal would be dependent on the shape of the UK’s future relationship with the EU.

Malcolm Turnbull, Aussie PM, has agreed to start talks with the UK on a trade deal after a discussion with Theresa May.

Companies and Markets

I attended outgoing MPC member Martin Weale’s valedictory talk for the Resolution Foundation this morning. The subject: Brexit – implications for monetary policy. Weale’s take is that the data on the economic impact of Brexit are mixed so far. He said the negative impact on trade would likely lead to a slowing of growth in the longer term. Nevertheless, with a weakened pound he stated concerns about a wage/price spiral developing (as Simon points out above, Labour membership price inflation has rocketed). He hinted that he did not think that the Bank should rush towards a rate cut. He was wary of negative rates, suggesting that the experience of Switzerland was that negative rates had caused mortgage rates to rise – the opposite of what was expected. Former MPC member Sushil Wadhwani was much more dovish – arguing that it was better to cut early and suggested that markets were in denial over the negative impacts of Brexit at present.

ARM Holdings, the UK designer of low-power chips ubiquitous in smart phones, is widely regarded as one of the UK’s finest high-tech firms. It is to be bought by Japan’s SoftBank for £24 bn. It represents a third of the market cap of the UK tech sector. The Chancellor, Philip Hammond, dispelled any concern about the UK protecting a national champion from foreign ownership saying that it showed Britain is open for business - and open to foreign investment.

Tweet of the day

Off topic, but Chris Heaton-Harris MP – a freshly minted Assistant Whip - regularly tweets appalling one-liners to his followers. Here is one of today’s examples: