Article 2TE21 Tory/DUP deal in doubt as DUP says it 'can't be taken for granted' - Politics live

Tory/DUP deal in doubt as DUP says it 'can't be taken for granted' - Politics live

by
Andrew Sparrow
from on (#2TE21)

Rolling coverage of the day's political developments as they happen, including Philip Hammond, the chancellor, giving his Mansion House speech.

4.22pm BST

In Belfast other DUP sources said that "backbiting from Tory backbenchers" against their party had stiffened their resolve to "dig in."

They said complaints by Tory MPs about having to deal with the DUP had gone down badly.

4.07pm BST

Here is the Financial Times' Sebastian Payne's take on Philip Hammond's Mansion House speech (paywall). And here is an excerpt.

Although one suspects Mr Hammond believes in a soft or partial Brexit - remaining the single market and/or customs union - he stuck to Mrs May's programme, albeit with a plea for a very gradual transition. "We'll almost certainly need an implementation period, outside the customs union itself, but with current customs border arrangements remaining in place, until new long-term arrangements are up and running," he said. Hard Brexit with a soft landing, in other words.

Those hoping for radical change will be disappointed. It was an illusion to think that a weak Conservative government would take the risk of changing tack, even with its leadership woes. Although it is very much business as usual, it is welcome to see the chancellor back and able to urge some caution about what lies ahead.

4.00pm BST

According to Sky's Ireland correspondent David Blevins, the Tory/DUP talks do not seem to be going particularly well.

Sky sources: DUP urging government to give "greater focus" to negotiations. "Party can't be taken for granted." 1/2

Sky sources: "Negotiations haven't proceeeded in a way that DUP would have expected." 2/2

3.43pm BST

The Scottish Government has published a written request from DUP leader Arlene Foster asking that it restrict gay couples from Northern Ireland converting their civil partnerships to same sex marriages in Scotland, the Press Association reports.

The publication comes days after Foster said she had no recollection of sending such correspondence to the administration in Edinburgh.

The letter, written in September 2015 when Foster was Stormont finance minister, urged then Scottish local government minister Marco Biagi to exclude Northern Ireland-based couples from legislation that enabled people in civil partnerships to convert those unions to same sex marriages.

When I was a minister DUP's Arlene Foster wrote to me asking us to curtail access of Northern Irish citizens to Scottish same-sex marriages.

But in a radio interview last week, the former Stormont first minister denied sending such a letter.

"I'm not quite sure what he [Biagi] was referring to but it certainly wasn't a letter from me and I've no recollection of a letter from me," she told BBC Radio Ulster's Inside Politics show.

3.35pm BST

Karen Bradley, the culture secretary, has said that she will announce her provisional decision on whether or not to allow Rupert Murdoch's 21st Century Fox full control of Sky by Thursday next week. In a statement, she said that she has now received reports from Ofcom assessing the takeover on the grounds of media plurality, Fox's commitment to broadcasting standards and whether its executives are "fit and proper" owners. She has also received an assessment from the Competition and Markets Authority (CMA).

Bradley said:

The decision before me now, which I am required to take acting in a quasi-judicial capacity, is whether - taking account of the specified public interest grounds - it is, or may be the case, that the merger operates, or may be expected to operate, against the public interest and therefore whether or not to refer for a fuller phase 2 investigation by the CMA. I will consider these reports in detail before coming to an initial view on whether or not I am minded to refer the merger.

I will aim to make my initial 'minded to' decision, publish the CMA and Ofcom public interest reports - in line with the requirements under the Enterprise Act 2002 - and return to parliament to make an oral statement by Thursday 29th June. There will then be an opportunity for representations to be made before I take a final decision.

3.15pm BST

Asked to comment on the sacking of Gerard Coyne (see 2.47pm and 3.12pm), a Unite spokesman said:

The decision is subject to a right of appeal to Unite's executive council, and the union will be offering no further comment on the matter.

3.12pm BST

Gerard Coyne has issued a statement about his sacking. (See 2.47pm.) He says he is the victim of a "kangaroo court" and of a "stitch-up".

I have been notified by email that I have been sacked from my position as West Midlands regional secretary of Unite the union following a disciplinary hearing held at Unite's London office on June 15th.

I am deeply disappointed but not surprised at my dismissal. When you are in a kangaroo court, you are rarely surprised by the outcome.

2.56pm BST

According to the Evening Standard's Kate Proctor, the government has dropped plans to scrap free school meals for all infants. The proposal was in the manifesto, but it won't be in the Queen's speech tomorrow. Ministers have accepted that, without a majority, it would not be possible to get the measure through the House of Commons.

2.47pm BST

Gerard Coyne, the senior Unite official who challenged Len McCluskey for the leadership of the union but narrowly lost, has been sacked, my colleague Rajeev Syal reports. Coyne was told that he must leave the union after 28 years for the alleged misuse of data.

Here is Rajeev's story.

Related: Unite official who lost to Len McCluskey in leadership race 'sacked'

1.42pm BST

Our Labour manifesto come out [in the speech] absolutely loud and clear. So it was fair and managed migration, it was about a jobs-first Brexit, it was about no deal being a very, very bad deal for the UK. [Hammond] has even said today he would look remaining within the customs union.

I thought the speech was fine. It was straightforward - not much to disagree with in it.

[In] four years time the question arises, of a general election coming up, I've then got to make a choice; do I let one of my very able younger colleagues take over or do I do what William Gladstone did, quite a while ago, he became prime minister when he was 82, I think, way beyond my years. Winston Churchill did in his mid seventies. I mean these things happen, some of the brightest and most interesting people in British politics recently have been relatively old. You remember Bernie Sanders in America as well. I think age is a surety, if you feel old. I don't feel old. I feel young and energetic and I'm very much up for a contest.

It is also important that immediate steps are taken to preserve evidence if there is a risk of it being destroyed by those holding it. The relevant authorities, whether pursuant to an inquiry or to a criminal investigation should be considering whether those powers of seizure need to be exercised now as a matter of urgency. I strongly suggest that immediate legal advice is obtained as to how material should be preserved and the process of that material being reviewed for the purposes of disclosure to core participants so that there are not a lengthy delays relating to disclosure to core participants, as have occurred in other recent inquiries.

I would also urge you to require that there will be an interim report published this summer. Not only is this crucial for community confidence, but it will allow for the swift implementation of any urgent steps that need taking as regards fire safety in similar buildings across the country.

Surely ... when you already have credible evidence to justify updating ... the guidance ... which will lead to the saving of lives, you don't need to wait another three years in addition to the two already spent since the research findings were updated, in order to take action?

As there are estimated to be another 4,000 older tower blocks in the UK, without automatic sprinkler protection, can we really afford to wait for another tragedy to occur before we amend this weakness?

1.02pm BST

The Times' Sam Coates has written an interesting take (paywall) on Philip Hammond's speech. Here's an extract.

Although technically the chancellor did not breach any collective government positions on Brexit or the economy, it is inconceivable that [Hammond] could have delivered such a speech before the botched general election a fortnight ago.

Mr Hammond took aim at a series of Mrs May's core beliefs: the need to bear down heavily on migration, the damage caused by globalisation, the ease with which the public spending taps can be turned on, and the need for a full "transition" deal rather than Mrs May's "implementation" phase.

12.44pm BST

The Institute of Directors has welcomed Philip Hammond's Mansion House speech. Allie Renison, its head of EU and trade policy, said:

Business leaders will welcome the pragmatic approach taken when talking about Brexit in his Mansion House speech. There were no big surprises, but the focus on jobs and the economy is a step towards shoring up shaky business confidence. The chancellor reiterated the government's intention to leave the EU customs union, which always seemed likely in the long-term, but crucially showed some flexibility on pushing for an orderly process to do so. The emphasis on the need for an early agreement on transitional provisions - as opposed to sorting this out toward the end of the negotiations - is positive. Firms will need to know, at the latest by next summer, whether there will be substantive changes to trade and migration arrangements in order to have time to activate any contingency plans.

12.28pm BST

Number 10 has sent out a (characteristically dull) read-out from this morning's cabinet meeting. Here it is. It's from a spokesman.

In this morning's cabinet meeting, ministers discussed upcoming parliamentary business, including tomorrow's Queen's Speech which heralds an historically important two-year session to help deliver the legislation for a successful Brexit.

Ministers also discussed the awful events of the past week. The prime minister expressed her appreciation of the police and emergency services for their bravery and professionalism.

12.00pm BST

It is day 2 of the talks in Belfast aimed at restoring the power sharing devolved government in Northern Ireland. Day 1 has been described as "reasonably constructive" by one senior Irish official.

Both the Irish foreign minister, Simon Coveney, and the Northern Ireland secretary, James Brokenshire, are not at Stormont for the all-party discussions today. Coveney is holding Brexit talks at the EU in Brussels while Brokenshire has commitments in London. However, the parties, most notably Sinn Fein and the Democratic Unionists, will continue talking today.

11.51am BST

Sir Vince Cable is leaving open the option of only serving as a caretaker leader, the BBC's Norman Smith reports.

Vince Cable leaves open option of serving as two year caretaker leader of @LibDems

11.42am BST

According to the BBC's Chris Mason, Sir Ed Davey, the Lib Dem former energy secretary, will announce later this week if he is standing for the party leadership.

Asked if he will also be running for the leadership of the Liberal Democrats, the former Energy Secretary Sir Ed Davey has just told me...

... "I'll be letting you know later in the week."

11.13am BST

Sir Vince Cable, the Lib Dem business secretary in the coalition who has just been re-elected to parliament after losing his seat in 2015, has announced in a blog for Lib Dem Voice that he is running for the party leadership.

Here is an extract.

There are big opportunities ahead. The Conservatives are in disarray and in retreat. The Labour Party outperformed expectations but complacently believes that 'one more heave' will see it into office. But an economic policy based on offering lots of free things lacks economic credibility and will be found out. Investing in infrastructure, rather than borrowing for everyday running costs is credible. There is a big space in British politics which I am determined that we should occupy.

10.56am BST

John McDonnell, the shadow chancellor, has put out a statement about Philip Hammond's speech, saying Hammond effectively admitted austerity would continue. McDonnell said:

The chancellor has made clear this morning that the message remains the same - austerity will continue. The Tories have learnt nothing from the general election, and the last seven wasted years of economic failure. The Conservatives have no understanding of the depth of suffering, stress and insecurity their long austerity regime has caused.

And we have seen the chancellor again trying to distance himself from the position of his prime minister on Brexit. It just shows further disarray at the top of government. The fact that there is clearly such a serious split between Number 10 and 11 is very worrying and only helps to undermine our country ahead of the Brexit negotiations.

It further shows just how weak a position Theresa May is in. And raises the serious question of: how can she negotiate Brexit when her own chancellor is so publicly disputing her position on Brexit and briefing against his own cabinet colleagues?

10.40am BST

Mark Carney's speech (pdf) was a fairly classy production, involving footnotes, graphs and sarcasm. Here are the key points.

Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK's economic prospects.

The sterling ERI has fallen close to 20% from its November 2015 peak. Since then, UK-focused equity prices have fallen by over 2%. In contrast, broader equity price indices such as the FTSE 100 and S&P 500, which more heavily reflect global economic considerations, are almost 20% and 40% higher respectively (in sterling terms). UK 10-year real government bond yields have fallen 115 basis points; by contrast 10-year real government bond yields in the US are down by around 25 basis points only.

Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.

Markets have already anticipated some of the adjustment. Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans. Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.

As spare capacity erodes, the trade-off that the MPC must balance lessens, and all else equal, its tolerance for above-target inflation falls. Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.

From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.

In this environment, the UK is running a historically large current account deficit. On the positive side, the deficit is funded in domestic currency and financial reforms have increased the resilience of the UK system, thereby making larger imbalances more sustainable. But the UK's deficit has also been associated with markedly weak investment and latterly with rapid consumer credit growth. This is not an imbalance that is, as yet, funding its eventual resolution.

Moreover, despite the large depreciation around the referendum, the extent to which the UK's deficit has moved closer to sustainability remains an open question, one whose answer depends crucially on the outcome of the Brexit negotiations.

Fragmenting liquidity would drive up costs somewhat in the remaining market as well. On current volumes, almost 90% of swaps are traded by non-EU firms and could remain in the main UK-based liquidity pool. Given the size of this market, the impacts could be expected to be much smaller, although not insignificant.

Fragmentation is in no one's economic interest. Nor is it necessary for financial stability. Indeed it can damage it. Fragmenting clearing would lead to smaller liquidity pools in CCPs, reducing the ability to diversify risks and diminishing resilience. And higher costs would reduce the incentives to hedge risks, increasing the amount of risk that the real economy would have to bear.

9.59am BST

Here is some more Twitter reaction to Philip Hammond's speech.

From Paul Mason, the Guardian columnist

Hammond signalled no further loosening of fiscal policy this morning - here's what that will mean https://t.co/xLMrvrIu88

astonishing: Hammond barely mentioned any benefits to Brexit at all. Spoke about it as if he were mitigating a natural disaster.

Extraordinary speech from Hammond. given up pretending he thinks there are benefits to Brexit. Confirmation that May's authority has gone.

Hammond has basically just given the most enormous two fingers to the idea that no deal is better than a bad deal.

it's rare that politician's jokes make me laugh, rarer still for an economics gag. but Hammond on Osborne's contribution to employment data!

"we have the strongest employment growth since blah blah, and that's even if we only count George Osborne once" - better first time perhaps.

9.40am BST

Here are the main points from Philip Hammond's Mansion House speech.

Just as the British people understand the benefits of trade - so, too, they understand how important it is to business to be able to access global talent and to move individuals around their organisations.

So, while we seek to manage migration, we do not seek to shut it down.

Let's be honest, we are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability, and supervisory oversight.

We can have no truck with that approach.

Funding for public services can only be delivered in one of three ways:

Higher taxes;

Britain has benefited from globalisation.

But we must not turn a blind eye to the growing tide of hostility to it in parts of the developed world.

9.15am BST

I'm sorry the comments were left off earlier. That was an oversight. They are on now.

9.08am BST

This is what Philip Hammond, the chancellor, said in his speech about how Britain would have to abide by EU customs union rules for a period after Brexit.

So, how do we achieve this "Brexit for Britain"? ...

By agreeing frictionless customs arrangements to facilitate trade across our borders - and crucially - to keep the land border on the island of Ireland open and free-flowing.

8.59am BST

The pound has fallen to a one-week low against the US dollar, as Mark Carney declares it is too early to raise interest rates.

The Bank of England governor is telling the Mansion House audience that the UK economy isn't strong enough to handle higher interest rates, especially as we don't know how the Brexit talks will proceed.

Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.

From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.

The pound falls after Mark Carney says it's not yet time to raise interest rates in Britain https://t.co/8l0x5mr7gl pic.twitter.com/TBHvfg4q3h

Related: Pound dives as Mark Carney gives Mansion House speech - business live

8.48am BST

The Carney speech involves some hardcore macroeconomics. Nothing wrong with that, of course, but rather than do it minute by minute, it is probably best if I just summarise from the full text.

I've got a full text of the Hammond speech too, so I will summarise that first.

8.45am BST

This is what Carney said about Brexit.

Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK's economic prospects.

Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change. Indeed, in such exceptional circumstances, the MPC is required to balance any trade-off between the speed with which it returns inflation sustainably to the target and the support that monetary policy provides to jobs and activity.

8.43am BST

The full text of Mark Carney's speech is now here (pdf), on the Bank of England's website.

8.41am BST

Mark Carney, the governor of the Bank of England, starts by referring to the recent terrorist attacks, and to the murder of Jo Cox last year. We must respond by building a Brexit that works for all.

He turns to Brexit, and warns that people face weaker real income growth. It is not time for an interest rate rise, he says.

Mark Carney makes direct link between Brexit process & "weaker real income growth" - people poorer. "Not yet time" for interest rate rise

8.38am BST

Here is some snap reaction to Philip Hammond's speech.

From Dan Roberts, the Guardian's Brexit editor

Hammond tells Mansion House speech that City is already on receiving end of "protectionist" tactics from Europe - "disguised as regulation".

Feels like Hammond is toning it down on Brexit this morning. Has he had his spreadsheet locked?

Hammond in summary:
- Jobs & prosperity the priority for Brexit
- Immigration is good
- Customs union arrangements should stay for some time

8.33am BST

Hammond says Britain can get a Brexit deal that puts jobs first.

Yesterday was a confident start, he says.

8.32am BST

Hammond asks how Britain can achieve a Brexit that works for the people.

He identifies four priorities.

8.26am BST

Hammond is now turning to Brexit.

He says the government set out its view in the prime minister's Lancaster House speech.

8.24am BST

Hammond says the government does not want to "turn inward" after Brexit.

But trade arrangements must work for the benefit of the UK.

Whilst we seek to manage migration, we do not seek to shut it down.

8.22am BST

Hammond says it may be beneficial to maintain a relationship with the European Investment Bank (EIB) after Brexit.

But he says he will not take that for granted.

8.21am BST

Hammond says the government wants to drive up productivity.

He says if productivity goes up by just a quarter of 1%, over 10 years that will add 67bn to the economy.

8.18am BST

Hammond says people are "weary of seven years of hard slog" (ie, austerity).

But if the government wants to spend more, it can only do so three ways.

8.15am BST

Philip Hammond, the chancellor, has just started giving his Mansion House speech. He was due to give it last week, but it was cancelled after the Grenfell Tower fire.

Instead he is now, unusually, giving it in the morning.

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