Another careless aide has been snapped in Downing Street flashing a Treasury briefing about no deal Brexit planning. The planning has been dubbed ‘Operation Yellowhammer’ and appears to show penny-pinching mandarins at the Treasury encouraging departments to fund no deal planning through “internal reprioritisation”, despite £3 billion having already been set aside for no-deal planning in the last budget by a reluctant Philip Hammond. Some speculation that it was accidently on-purpose rather than cock-up…
UPDATE: It now emerges that the indiscreet note-carrier was not a hapless aide but in fact Treasury Minister John Glen. Either he’s cunning or a bit of a clutz…
Guido can reveal that Chancellor Philip Hammond has hired Sonia Khan to join his team as a media SpAd working alongside Poppy Trowbridge. Hammond’s other media SpAd Giles Winn will be moving into a broader SpAd role. Khan has held a number of press roles around Whitehall, most recently press secretary to Liam Fox in the Department for International Trade. She is also an alumna of the Taxpayers’ Alliance. At least there is now one tax cutter in the Chancellor’s office…
All eyes on Boris’ whereabouts, which cannot yet be reported for security reasons, though it’s worth noting he is not the only Heathrow Cabinet critic who is missing tonight’s vote. Philip Hammond has long opposed a third runway, telling the Telegraph in 2010 that the idea was “Dead. Dead as a Norwegian parrot”. In 2015, he told his constituents he backed expanding Gatwick instead:
“London’s role as an international air transport hub can be maintained without additional runways at Heathrow. A second runway at Gatwick, plus enhanced transport links between the airports and better transport links to London will create a ‘virtual’ hub airport, maintaining Heathrow’s role in the local economy without expanding it.”
Hammond has sent a solitary tweet backing the government this morning, but we know what he really thinks. He will be defying the three line whip when he misses the vote in Mumbai tonight…
After a month of think tank launches and relaunches, op-eds and policy papers discussing the new radical policies the Tories need to win the next election, Ruth Davidson and Philip Hammond have come up with the uninspiring, unoriginal idea of high taxes, new regulations, more intervention, more borrowing and more public spending.
Ruth today says the Tories have cut taxes far enough and demands more money for the NHS, presumably funded by tax rises or extra borrowing. Her call comes the day after Tax Freedom Day, the point in the year at which the average person starts to actually keep what they earn rather than pay it to the state in taxes. That day now comes later than at any time since 1995 – even worse than under New Labour. Government spending is at £30,000 per household. There is room to solve the housing crisis and make sure the NHS is properly funded while bringing down overall spending and lowering taxes.
Hammond, meanwhile, is planning a speech arguing that Thatcherite free market capitalism is no longer fit for purpose and that greater state intervention is needed to win over young voters attracted to Corbyn. This is such a lazy analysis of the the 2017 result. The ‘youthquake’ theory has been largely debunked, polls are showing a clear trend towards young voters now preferring the Tories to Corbyn, and under 25s are more likely to think the government taxes and spends too much already. As are 25-39 year-olds and 25-49 year-olds.
Ruth and Hammond’s blunt big state approach is not new, it’s not original, it’s not radical, it is the same, tired, old ideas of more taxes, more spending and more regulation. Not only does it concede ground to Labour and play Corbyn’s game – and he can always promise more spending and regulation than the Tories – it doesn’t even correctly identify the direction in which young voters want to see the country to go. Will Tory members and voters really go for it?
Liz Truss’ Instagram is a thing of wonder – at the launch of Freer the other night she defended the rights of “young people to put pictures of themselves on the internet”. Alas it turns out not everyone is a fan. Liz recently snapped this selfie of the Treasury team sitting on the frontbench in the Commons. Guido hears Phil Hammond, a stickler for the rules which dictate photos cannot be taken on the parliamentary estate, did not expect it to appear online and made his feelings about the breach known to the photographer. Hammond takes Insta very seriously – a private account called ‘Terrier About Town’ follows the lives of the Chancellor’s two dogs Rex and Oscar. Any journalist who attempts to follow is immediately blocked. Who called the fun police?
Spreadsheet Phil delivers a surprise box office finale to the Spring Statement with his blistering reply to John McDonnell. The Chancellor made the point McDonnell is still refusing to apologise to Esther McVey over his infamous “lynch” comments, and also picked him up over Russia Today. Phil ya boots…
2/5 When Mr. Grant says ‘The Treasury is determined to keep us in the Customs Union’ does he mean the Chancellor or officials? If the Chancellor, it is a breach of collective responsibility, if officials, against their duty to implement Government policy #TreasuryGate
3/5 When Mr. Grant refers to ‘unpublished papers’ on the Customs Union, who commissioned these and authorised him to be told? Again, if officials, improper for them to tell a partisan think-tank leader before most of the Government or Parliament #TreasuryGate
The Mogg has a point here. As Guido pointed out yesterday, Charles Grant of the Centre for European Reform did say that the Treasury is trying to bounce the government into a softer Brexit. That is either a breach of Hammond’s collective responsibility or the civil service’s duty to implement government policy. Isn’t that the more important story?
The new Treasury-led Brexit forecasts have to be read in the context of their record at predicting what would happen in the immediate aftermath of a Leave vote.
The HMT prediction for GDP 3 months after the referendum was that “the UK economy would fall into recession” and contract up to -1%. It grew +0.5% in this period.
The Treasury told us: “The analysis shows that immediately following a vote to leave the EU, the economy would be pushed into a recession, with four quarters of negative growth.” The reality has been positive growth every single quarter since.
HMT forecast that in the two years following a Leave vote GDP would fall between -3% and -6%. GDP grew by 1.9% in 2016 and 1.8% in 2017, with better than expected growth in the final quarter. There is now no recession forecast.
On unemployment, they infamously said it would rise by between 500,000 and 820,000 in the immediate aftermath of the referendum. Unemployment fell again last week to a four-decade low.
And the Treasury said government borrowing would rise by up to £39 billion immediately after the vote. Instead borrowing for the financial year to date is down 12% on the same period last year. That’s the lowest year-to-date total since 2007.
Why would anyone believe the people who predicted this nonsense ever again?
Speaking in Davos Philip Hammond has called for a Brexit which brings only “very modest” changes, sees continued close alignment with EU rules and regulations, and the continued free movement of people. Hammond praised the ultra-Remain CBI, before arguing that he didn’t want to see any serious material change in our relationship with the EU:
“We are taking two completely interconnected and aligned economies with high levels of trade and selectively moving them, hopefully very modestly apart…”
And on free movement:
“We want to maintain the closest possible relationship in people to people exchanges”
The Chancellor also mocked May:
“I’m told a walk in the mountain air was what encouraged the PM to call the general election last year so I’m hoping she stays indoors this time”
“As we came into Davos, there was an avalanche warning yet the foreign secretary isn’t even here.”
If the change to our relationship with the EU is only “very modest”, if we continue with high alignment with EU regulations and the “closest possible” outcome on free movement, what is the point of Brexit? How is that delivering on the referendum result? Number 10 slapped down Boris for going public with policy demands that haven’t been agreed by Cabinet this week. Will they slap down Hammond too?
UPDATE:The backlash begins. A Whitehall source tells Guido:
“Hammond is the most tin eared politician in the U.K. He has no following in the Conservative Party and bears the imprint of the last City special interest who sat on him.”
UPDATE II: A second Whitehall source says:
“People voted to take back control yet Hammond clearly wants to keep control in Brussels. His high alignment plan pushed by ultra Remainers would be a disaster – making us a submissive rule taker. This unsanctioned intervention should slapped be down hard.”
UPDATE III: And a third Whitehall source:
“Hammond should stop listening to the CBI and other EU flunkies and start listening to the 17.4million people who voted to leave the EU. If he doesn’t then he may as well hand the keys to the Treasury to McDonnell now.”
David Davis says Philip Hammond was “not right” to suggest Britain would pay exit money to the EU under any circumstances. Hammond made the comments in a select committee appearance earlier this week. DD said on Marr this morning:
“It is conditional on an outcome… it is conditional on an implementation period, a trade outcome and also the other elements of the treaty, security, foreign affairs…”
Philip Hammond has confirmed to the Treasury select committee that the Cabinet still hasn’t discussed what the Brexit end state will look like, i.e. whether it will be the convergence non-Brexit preferred by him, Jeremy Heywood and Olly Robbins, or a real Brexit in which we properly diverge from the EU. It has been 18 months since the referendum, it’s mad the Cabinet has not even discussed what Brexit Britain will look like. If the government has no idea on the end state, are they even ready to move onto the next stage of talks?
UK Chancellor Hammond late for regular finance ministers meeting because of technical problems with his plane, I am told. All other ministers are in. He’s due here imminently. pic.twitter.com/bOQDPWHDqr
Today’s Times has a belter of a story about the MoD banning Philip Hammond from using RAF planes and helicopters until the Treasury settles his jet-setting bills. An epic tale of briefing and counter-briefing after Team Hammond dubbed Defence Secretary Gavin Williamson “Private Pike” in the Mail on Sunday.
Yesterday Hammond was late for his meeting with EU finance ministers – journalists were told “because of technical problems with his plane”. Were the technical problems that the RAF wouldn’t let him on board?