The 2017 Parliament: End of Term Report - Maitland/AMO€¦ · policy-makers in Whitehall and Westminster influencers. Listening is the order of the day for government. Much ministerial

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The 2017 Parliament: End of Term Report

Title Introduction

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On July 20th, Parliament broke up for summer recess. MPs have returned to constituencies, ministers have embarked on trips to foreign capitals, and Brexit talks trudge on. Whilst backbench MPs take time to reacquaint themselves with their constituencies, senior ministers are globetrotting to create the PM’s new “global Britain. This is partly due to the complexities of Brexit and the necessity to be face to face with decision makers around the world. However, it is also revelatory of the nature of the current parliamentary situation. Whilst Parliament is in session, senior ministers must be close by to vote as every vote in a hung parliament matters. Of all of the changes brought on by the turbulence of the election result, none is so profound as the new opportunities for business to engage with politicians, policy-makers in Whitehall and Westminster influencers. Listening is the order of the day for government. Much ministerial and civil service effort is now turned towards constituencies and sectors across the country in trying to understand what businesses want from Brexit. In a similar vein, the Prime Minister has recently set up an advisory group of senior business leaders to deliberate on how Brexit can be managed in a way that is good for business and the wider economy. MPs and ministers are all ears—keen to find ways that they can help chart Britain’s course in what are likely to prove a challenging next few years (and shore up their votes at the same time). Although it is something of a cliché; conference season, now just around the corner, is make or break for the leaders of both main parties. With big policy divides for the Conservatives and Labour, influential figures in both parties have come up with very different solutions to the great exam question of our time: how to get through Brexit united and come out of the next general election as the governing party.

On the Labour party’s agenda: the possibility of new rules that would make it easier for candidates who are unpopular with the parliamentary Labour party to get elected. The motion that could be debated if passed would mean only 5% of MPs and MEPS would need to nominate someone to run as leader. It is currently 15%. Up in Manchester, the PM will speak to party members and staff bruised by the snap election and confused by how such a popular leader in April lost a majority in June. Maitland Political have put together this briefing note on what we think are the most important things to have happened over the past few months and a look ahead to what we can expect from the politicians when they return in the Autumn. We will be producing our morning monitor every week day and keeping you up to date on Twitter @MaitlandPol. To subscribe for the Maitland Political Daily Briefing, please contact [email protected].

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The general election, if anything, made Brexit more, rather than less contentious. Firstly, it was widely expected that Philip Hammond would be sent packing after the election. In May’s government, he was the most cautious to Brexit , the keenest to find a way to build a transitional deal, and the least likely to borrow the sound bite “no deal is better than a bad deal”. Since the PM failed to win her majority, she lost her ability to sack the Chancellor. Now, Hammond has appeared on national TV saying that the consensus in the Cabinet is forming around the idea of a transitional deal that could include continued membership of the single market, and possibly even the customs union if we keep freedom of movement.

Although the Cabinet may desire a transitional deal with the Commission, it is of course not up to them to create it. Whilst the Commission have long supported the idea of transition deals for countries who are yet to join the EU, this is uncharted territory; the commission will be very wary about softening their approach to the free movement of goods, capital, services, and labour.

Fabian Zuleeg the Chief Executive and Chief Economist of The European Policy Centre said last week that “reality will bite” the UK soon; “The assumption that the EU27 are willing to accept any deal to avoid Brexit is misguided. Not only are there red lines that they will not cross, but the clock is ticking as well. The time left to strike a deal is limited. It is for the UK to come up with workable solutions as otherwise the UK will end up with no deal at all. While this is also negative for the EU27, it is seen as the UK’s choice and not something that needs to be avoided at all costs.”

Concluding the second round of talks last week, Michel Barnier and David Davis appeared to have been at two different meetings. While both sides agreed that the UK should outline in the next session how it intends to maintain the Common Travel Area with the Republic of Ireland, Barnier also expressed his team’s concern about a lack of clarity on Britain’s position on a number of issues, notably the UK’s financial obligations, which he said was crucial to proceeding in other areas. Davis has only a few months to make significant advances before the EU considers whether or not sufficient progress has been made to allow discussions to move on forward on the EU’s future relationship with the UK.

The Prime Minister’s precarious position has brought about a reappraisal of her attitude towards the businesses she once shunned during her first months in office. Coupled with a parliament filled with tough campaigners empowered by the government’s lack of a majority, there is clearly space in which to influence ministers above and beyond the engagement process as part of the Brexit negotiations.

The road ahead:

• 28 August – Third round of Brexit negotiations

• 18 September – Fourth round of Brexit negotiations

• 24 September – German Federal election

• 24 – 27 September – Labour Party Conference

• 1 – 4 October – Conservative Party Conference

• 9 October – Fifth round of Brexit negotiations

• 19 – 20 October – European Council summit

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Brexit—Under the Surface

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Brexit Key Issues

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The Customs Union

The Customs Union gives EU countries the benefit of shared weight in agreeing trade deals with other countries. It makes the movement of goods around several countries seamless. Customs unions cut out bureaucracy and cut down the costs of manufacturing complicated and important goods. It also sets a common external tariff, meaning that the tariff for goods coming from outside the union are subject to the same cost at point of entry.

However, it is only membership of the Customs Union that makes it impossible for a country to conduct its own trade deals. That Britain, as a country, should have the ability to negotiate its own trade and “take back control” was one of the most significant arguments during the EU referendum. Many are therefore bemused that this particular debate – remain or leave the Customs Union - has flared up since the general election.

The Single Market

The European Union's single market is an extremely effective form of supranational trade co-operation. As well as eliminating tariffs, quotas or taxes on trade, it also includes the free movement of goods, services, capital and people. The single market strives to remove so-called "non-tariff barriers" - different rules on packaging, safety and standards are abolished and the same rules and regulations apply across the area.

Remain supporting MPs on all sides of the House are still holding out hope that they can keep Britain in the single market and there is overwhelming support from business to do so. However, it is still not clear whether it is even possible for Britain to continue to have tariff free access to the single market, due to the fact that it could leave Britain under the jurisdiction of the European Court of Justice and it may need to keep to the current policy of freedom of movement. Irish border Another sticking point is the clash between the desire to maintain a frictionless border between Northern Ireland and the Republic of Ireland, and the practicality of the solutions proposed thus far. The Irish government has rejected British proposals that would see extensive surveillance technology deployed to monitor the land border as “unworkable”. The new Irish Taoiseach, Leo Varadkar, wants immigration and customs checks moved to air and sea ports, effectively making the Irish Sea, and entry points in Northern Ireland, the new border between the UK and the Republic. This could pose a further dilemma for No10 as the DUP has threatened to block the change. EU citizens Achieving a settlement on the rights of EU citizens living in the Britain is a priority for both sides. Barnier has described a “fundamental” disagreement between the UK and EU over the European Court’s role in protecting citizens’ rights. The European Parliament’s Brexit Steering Group, led by former Belgian PM Guy Verhofstadt, has warned the UK that it will “continue to push for full rights for EU citizens…it is a core mission of the European project to protect, not to diminish, the fundamental rights of all citizens.” Withdrawal Bill When Parliament returns, the government will begin the struggle to pass the Withdrawal Bill. The legislation, formerly known as the Repeal Bill, is designed to convert EU legislation into British law. The Bill has proven controversial for the significant powers it provides ministers to change aspects of legislation deemed obsolete by leaving the EU. Brexit Secretary David Davis has pledged to “work with anyone” to ensure the Bill is passed, but faces stiff opposition from other parties and some Conservative backbenchers.

Title Business in a hung Parliament

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A fresh relationship with business Without her former chiefs of staff Nick Timothy and Fiona Hill, who helped keep business relations on a more distant footing than had been the case in the Cameron years, Theresa May has acted to repair the damage by opening her door to the concerns of the UK’s business community. This can be attributed to both the efforts of the Chancellor, emboldened and keen to assert his vision of a softer Brexit, and the economic realities beginning to emerge from the EU negotiations. Business Council May has reached out with the creation of a new Business Council. Established in the wake of the fallout from election, the Council is a forum for senior corporate figures to discuss the government’s key economic objectives, namely improving productivity and increasing investment, as well as the ever present topic of Britain’s withdrawal form the EU. Speaking at the launch event in Downing Street this month, May “emphasised her desire to listen to the views of businesses” and to “channel their experience”. The first meeting included the heads of five business lobby groups—CBI, IoD and BCC, EEF and FSB—and seven leaders of companies with a big interest in maintaining open markets and regulatory harmony between the UK and the EU—Ralf Speth of Jaguar Land Rover, John Pettigrew of National Grid, Paul Manduca of Prudential, Luke Johnson of Risk Capital, Kathryn Parsons of Decoded, Dave Lewis of Tesco and Roger Carr of BAE Systems.

Parliament Treasury and Business Committees Commons select committees have grown in importance over the past few years and their role in holding ministers to account will only grow as far-reaching policy and legislative changes resulting from Brexit become clear. Two of the key figures here will be Nicky Morgan and Rachel Reeves, chairs of the Treasury and Business Committees respectively. Morgan, a Remain supporter, was dropped from the government by May and has subsequently been a vocal critic form the backbenches—an attitude that can be expected to continue in her new role as she scrutinises the government’s approach to the economy. Reeves, meanwhile, is an experienced frontbencher hailing from Labour’s moderate wing and will likely be a prominent advocate for the

concerns of business.

Government

Title Treasury Select Committee

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• Education Secretary (2015 – 2017) • Former Treasury Minister and Minister for Women and Equalities • President of the Bright Blue think-tank

Rt Hon Nicky Morgan MP (Conservative, Loughborough)

• Treasury Committee member (2015 – 2017) • Former Shadow Work and Pensions Secretary • Former Shadow Chief Secretary to the Treasury

Nicky Morgan is the first female Chair of the Treasury Committee, beating competition from five other Conservative colleagues, including former minister Stephen Hammond and the popular Jacob Rees-Mogg.

Morgan left government after Theresa May’s victory in the Conservative leadership election last year. She had initially backed Michael Gove in the contest. She is generally seen as being on the left of the party given her support for remaining in the EU and patronage of Bright Blue, a liberal-conservative think-tank. In her address to MPs, she said that it would be “more important than ever to forge a wide consensus on Brexit and for Parliament to question Ministers on their decisions”. As well as inquiries into Brexit, Morgan has said that she wants to widen the scope of the Treasury Committee beyond financial services and has cited tax policy and consumer issues as areas that will get increased attention.

Business, Energy and Industrial Strategy Committee

Rachel Reeves MP (Labour, Leeds West)

Reeves stated that her priorities are to ensure the “best possible industrial strategy”, securing a sustainable energy policy, boosting productivity and improving support for small businesses. In addition to this, she wants to pick up the work of the Taylor Review by “looking at the future of work in an environment of new technology and ever growing competition.” She believes that “business’ voice has been lost” in the Brexit debate and wants to ensure they are included. Reeves also intends to address social justice issues and “shine a spotlight on diversity at the top levels of our businesses and tackle the gender, disability and BAME pay gaps”. She wishes to see the Committee get out of Westminster to visit local enterprise partnerships, businesses and workplaces across the UK.

In her statement for the position, Rachel Reeves emphasised her background as an economist at both the Bank of England and the British Embassy in Washington, and spoke of her ability to work across party lines and be “constructive, evidence-based and diligent in the work I do”.

Title Social Media and Politics

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An estimated 46.8 million people were registered to vote at the June 2017 UK Parliamentary general election—the largest electorate for a UK-wide poll, with about half a million more voters registered than at the 2015 general election. From the time Theresa May announced on April 18th her intention to ask Parliament to approve a general election to the deadline to submit online voter applications on May 22nd , almost 70% of new online voter registrations were made by people under 34.

With the surge in young, enthusiastic voters joining the ranks of the British electorate, it’s becoming impossible to ignore the increasing role that social media and data are having on politics—the unexpected rise of Jeremy Corbyn’s Labour party should not have come as a surprise. Sam Jeffers, co-founder of ‘Who Targets Me’, a Google Chrome extension that allows users to see which campaigns are spending money to target them, said “The Tories were advancing further into Labour territory but weren’t defending their own marginals…in the final stages we saw lots of Labour ads in Hastings and Rye [where the home secretary, Amber Rudd, almost lost her seat], but no Tory ads.”

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