Labour minister resigns over EEA amendment

Laura Smith has resigned from her position as Shadow Minister for the Cabinet Office allowing her to vote against the EEA amendment, instead of abstaining.

In a statement, the MP for Crewe and Nantwich stated: “After much reflection, I have resigned as Shadow Minister for the Cabinet Office to vote against remaining in the EEA. I will always put my constituents in Crewe & Nantwich first”

4 Labour PPSs have also resigned to defy the whip on this vote.

The government won the vote to reject the EEA amendment by 327 votes to 126 – a majority of 201.

Around 75 Labour MPs defied their whip to vote for it with approximately 15 defying the whip to vote against it.

More follows

Soubry- MPs changed voting intentions after threats from Brexiteers

Anna Soubry today stated that she knew at least one MP who was not voting as they wanted to on the EU withdrawal bill due to threats to them, their staff and their family.

The speaker said no MP should be subject to threats but Miss Soubry’s comments have worrying implications especially as the issue of Brexit resulted in the murder of Jo Cox just before the referendum.
The Sun and other tabloid papers ran headlines urging MPs to not vote against the government but today the government has lost one minister over Amendment 19 that would give a meaningful vote on whether to accept the deal struck by the government.
Miss Soubry did not mention which MPs had been threatened and no one has come forward saying they have been threatened however in the polarised landscape of Brexit it does not seem unlikely.

Rail nationalisation – A factcheck

A poll conducted by The Independent has revealed that 58% of the British public believe privatisation of the railways to be a failure. The  poll also found 64% would support bringing them back into public ownership, and only 19% would oppose it. This is evidence that the British public overwhelmingly back Jeremy Corbyn’s plan to bring the railways back into public ownership.

It’s not difficult to see why. Lately, there has been chaos on private operators, with Govia Thameslink Rail (GTR) and Northern Rail struggling to cope with timetable changes. This has left thousands of passengers stranded due to delays and cancellations. More than 15,000 trains were cancelled or delayed in May alone.

However, even if the private operators were actually running trains, it would still be better to have public ownership of our rail operators. It would cut the cost to the taxpayer and help create a better quality of service.

We currently pay huge subsidies to the private rail operators. The rail operators, mainly private companies like Virgin, or foreign governments, receive £4.2bn in subsidies from the British government per year. Adjusted with inflation, this 3x times than what was paid when train operators were under public ownership. For every 1km you travel on a train, our government pays 5.1p to a private operator. The franchise system works by the government topping up private companies balance books if they don’t meet their target revenue. Private operators have made a profit of £3.5 bn in the last 10 years of operation. Money that could be used elsewhere in the public sector.

This profit incentive for the train companies also causes further problems. In a normal market, prices are in theory kept low by competition. But competition doesn’t exist in the rail industry. If you want to get from Warwick to London you have to go on Chiltern Railways for example. Private firms with monopolised markets has led to rampant price increases. A one way ticket from London to Manchester has increased by 238%, from £50 in 1995 to £169 today. The UK has the most expensive rail prices in Western Europe, with British passengers spending 6x times more than their European counterparts.

We are therefore paying private companies to rip off passengers. It is a mad system that needs changing.

It therefore makes logical sense to bring the operators into public ownership and make the profits ourselves. The recently nationalised East Coast Main Line delivered a profit of £217 million in 2013. Money that can either go into investment or back into the treasury. Why continue to subsidise private corporations and foreign governments to provide us with shoddy public transport?

It must be remembered that we already own the infrastructure. The main complaint about National Rail when they were in operation was that they didn’t spend enough on infastructure. Network Rail, a publicly owned company, now owns the infrastructure, and provides this service in an acceptable way. The problems that faced our public railways 50 years ago would not be problems today.

It’s also worth noting that not only does the UK have some of the highest rail prices in Western Europe, but it also has the most delays and cancellations. In a fixed period, 83% of trains in Britain ran within five minutes of their schedule. In Germany, this figure was 92%.

The reason for this superior service is accountability. We have seen this week the ease in which the government can lay the blame on operators and Network Rail, and how other institutions can blame the government. With the government directly responsible for the railways, they will be held accountable by commuters and voters.

Finally, the most efficient train operator in this country is TFL, a publicly owned operator. An excellent example of the great service a publicly company can provide.

Nationalise the railways, and we will all reap vast benefits.

Government makes £2bn loss on sale of RBS shares

Overnight the government has sold 925m shares in the majority public owned RBS for £2.5bn. The sale represents a £2.1bn loss at the rate of 271p, compared to 500p a decade ago, which has not been traded above since 2010.

The National Audit Office (NAO) states that the true break-even price is 625p. This itself has never hit this since 2008, and could lead to an overall total loss of over £30bn.

The government still owns 7.5 billion shares, and this latest sale covers 7% of the ownership of the bank. The first batch of shares to be sold after Alistair Darling and Gordon Brown had to intervene in 2008 was in 2015 for 330p raising £1.9bn. After this latest round, taxpayers’ stake in the bank has lowered from 70.1% to 62.4%.

Ostensibly, this loss needs to be measured over what the catastrophic scenario would have been without the bailout out in the first place which cannot be denied when the banking world of a decade ago is judged. RBS was arguably the biggest bank in the world at the time and the Labour government originally was forced to step in to save a crisis, not to attempt to make a profit. Over the past decade the bank has been restructured, and now operates more as a domestic bank, for example RBS now operates in nine countries as opposed to thirty-eight. However, such vast scale restructuring has led to the bank shrinking in size by more than half, leading to between 50,000-60,000 job losses.

Despite these damaging figures, both the government and RBS appear satisfied with the mornings conclusions. Jon Glen, Treasury Economic Secretary argued that it is “unrealistic” to think Britain should hold on to RBS shares until taxpayers can recoup their investment, and Chancellor Phillip Hammond sees the sale as helping to put the “financial crisis behind us”. Hammond also argued that the government should not be in the business of owning banks, and that the proceeds of this sale will go towards reducing the national debt and help to “build an economy that is fit for the future.”

But this it is virtually impossible for the public to feel self-assured in these comments. Especially after the worries amongst financiers earlier in the year that there was potentially another crash on the way, looking at America particularly, which do not seem to let up following President Trump’s latest protectionist trade policies.

Amongst the Chief Executive of RBS Ross McEwan’s pleasure at the largest stakeholder selling more of its share, he is under the impression that RBS is now a simpler, safer bank that is focussed on delivering for its customers and its shareholders. Indeed so, in February the bank reported an annual profit of £752m, this was its first for a decade and a sharp turnaround from the £6.95bn loss the previous year.

Yet on the Today programme this morning, Ian Gordon, a Banking Analyst at Investec, not only reiterated the gloomy news for the public that there is no chance of ever breaking even on its investment, but RBS have further plans to downsize to hit a cost-income ratio target of 50%. This will add to the £40bn already spent by RBS on conduct and restructuring cost, which has not only consumed the £45 billion bailout fee, but together with bad debts has destroyed the value of the business, and could lead to more job losses. Gordon concluded that because of this, RBS is still an inefficient bank and the most optimistic and aggressive target, should all the markets act favourably, would be 2023 for selling off all remaining shares.

Frustratingly, Jane Sydenham, an Investment Director at Rathbone, sees the present as a good time for the government to sell these shares because the economy is “reasonably strong” due to low interest rates which are slowly rising. This may be good for the banks, but similarly was thought over ten years ago, and, looking at the uncertainty in America and the rise of populism across Europe, it remains difficult for faith to be placed in the current economic system going forward.

Despite positive sounds coming from the world of finance, not only is it clear that the public will not be refunded directly, judging from the mixed reception it is still clear that everything is very unclear. At the turn of the year there was talk of another crash. And comments from Sydenham about the economy growing and interest rates being low mean nothing to people whose wages cannot compete with inflation.

Analysis from Iwan Doherty- Editor in Chief

Privatised profits and nationalised losses. When the Labour Party rail against policies for ‘the few’ this is what they mean. RBS has been making losses at the expense of the taxpayer for the last decade, but as soon as it posts a profit it is boxed up to be sold. The policy is corrupt and will only enrich a few people and will hit our pockets.

The chancellor says we cannot hold onto our shares. Nonsense. George Osbourne promised that the Treasury would make a profit on bailing out the banks. We are set to make a £25bn loss. This from the party of fiscal responsibility.

The loss is a spectacular failure by the Tories and another reminder of how the rich and powerful use their influence to tip the tables in society. It is another reminder of the Global Financial Crisis when the economic establishment made us pay up for their mistakes.

Gordon Brown Calls for a Second Referendum

 

Gordon Brown has become the latest in a string of high profile political figures in the UK to call for a second referendum on Brexit. According to the Daily Express, Brown plans to ‘re-enter the political fray next week joining senior Labour figures trying to thwart Brexit‘. This move was met with suspicion from those both within the Labour Party and those outside of it; time will tell how much of an influence it will have on policy of the Labour Party and the country.

It is no secret that the former Labour leader has been a long-time supporter of the European Union and has clashed with current leader, Jeremy Corbyn, over the issue and he has previously put pressure on Corbyn to change party policy.

There are arguments that almost two years on from the Referendum, people are more aware of the complexities of the issue and many who previously voted to leave have indeed now changed their minds. The referendum itself was never legally binding and so for many, it is vital to have a new, less binary, referendum which sets out the specific areas of EU policy such as membership of the Customs Union or Single Market. However, there is criticism that even with a more detailed referendum, the outcome may not be hugely successful. Opponents of the first referendum, and indeed referendums generally, would argue that they are confusing for an electorate and such important issues should not be put to the ordinary voter.

It is perhaps true to say that a majority of British people are at this point getting rather fed up with the constant talk of Brexit. Though it is indeed a critical issue and undeniably the most important issue to face the country for years, to start the whole process again with a second referendum may be detrimental to the cause that those in favour of it are fighting for.

There are further issues with demanding a second referendum in terms of the logistics of such a referendum. Since the 23rd June 2016, there have been significant changes in the politics of the United Kingdom and, at the very least there would be questions as to who would actually lead either side of the debate. Looking at the leaders of the two largest political parties, Theresa May and Jeremy Corbyn, who both campaigned for remain, it would be difficult to imagine them both leading the Remain campaign a second time round.

It is no secret that the Conservative Party has a considerable level of Euroscepticism within it and for Mrs May to come out and lead a campaign to remain in the European Union in 2018 could spell the end of her leadership of the Party. 

On the other side of the political spectrum, Corbyn is not the ideal candidate to lead a renewed charge back to the EU either. He and many of his vocal supporters have been Eurosceptics their entire career, and to limp back to the EU now would not suit their long-term political ambitions.

The other contender to lead the Remain side would be Liberal Democrat leader, Vince Cable. The Lib Dems are arguably the only completely pro-EU major Party in Britain and would be an obvious choice to lead the campaign to remain. However, they have enjoyed limited electoral success in recent elections and they are still facing the hangover from the coalition years. It is clear, that a second referendum would cause major splits in what is already a fragile political landscape.

Overall, it is not untrue to say that for many, the call for a second referendum coming from a previous prime minister is not something that will go down particularly well. Every time a political figure from previous years appears on the current political system, the British public tends to react with suspicion and often hostility. To call for a second referendum on the UK’s membership of the European Union is a bold move for Gordon Brown. There are endless arguments against a second referendum and in the words of Brenda from Bristol, ‘Not another one!’.

Article 127: The possible savior from a Hard Brexit

In what was clearly a campaign of misinformation, the British public was mistakingly assured that a vote to leave the EU meant leaving the Single Market, despite the promise in the Conservative manifesto stating otherwise. However, as the Brexit debacle deepens it has become clear that this was not the case. Far from it. Indeed, what Brexiteers have failed to mention is that our membership of the European Union is separate to that of the Single Market. It is not governed by Article 50, but Article 127- a different agreement altogether.

For those not aware of such a caveat, Article 127 derives from the 1994 European Economic Area Agreement. Here, the EU extended Single Market membership to three non-EU nations: Lichtenstein, Iceland, and Norway. As a result, these nations were given access to the free movement of people, goods, and services from a range of other EEA participants.  The United Kingdom, in its own right, is a signatory to this agreement and is also a member of the EU.

In recent months, much debate has surrounded whether the government actually needs to trigger Article 127 to cease membership of the EEA, or as Brexiteers have argued, withdraw automatically under Article 126 (1) of the Agreement. Unlike Article 127, under Article 126 the “Agreement shall apply to the territories to which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty, and to the territories of Iceland, the Principality of Liechtenstein and the Kingdom of Norway.”

Unsurprisingly, the ambiguity of such legal jargon culminated in a dispute between the UK Government and Single Market Justice (SJM) campaign in 2017. This group has claimed that because the UK is a separate ‘contracting party’ (under Article 127), leaving the European Union does not automatically result in a cessation of EEA membership. As a result, it is viewed that because British EEA membership is enshrined in UK law through Parliament’s 1993 Agreement Act, then triggering Article 127 would require parliamentary approval.

Initially, the government seemed to accept the argument. Upon challenging the Government through the Divisional Court on the topic of Article 127, the SMJ reported that the Government accepted that Article 126 does not “give rise to the termination of the EEA Agreement ipso jure”. Yet, surprisingly, the Department for Exiting the European Union seemed to somewhat u-turn, stating that the EEA Agreement will “no longer be relevant for the UK“, “it will have no practical effect” and therefore “we do not envisage a vote”.

Taking stock of this and our constitutional arrangments, it is clear the UK is indeed a separate ‘contracting party’ to this agreement. This can be seen in the fact that EU membership is enshrined within the 1972 European Community Act, not the 1993 EEA Agreement Act- an entirely separate piece of legislation. With this in mind then enacting Article 127 must require a vote that bears no influence on or link to the Withdrawal Bill.

With the House of Lords adding amendments to keep the UK within the EEA and the desire to stay in the EEA growing due to increasing problems with economic stability and the Irish Border, the legal ramifications of Article 127 could yet keep the UK in the Single Market.

Scrap the ‘Madness’ of the employment cap says BMJ

The Editor of the UK’s most prestigious peer-reviewed medical journal has described the government’s current cap on visas preventing doctors from entering the UK to take jobs in the NHS as “Madness’.

Fiona Godlee, editor-in-chief of The BMJ, made the remark as the magazine launched a campaign to ‘Scrap the Cap’ by demanding an urgent review of immigration policies so that doctors from outside the European Economic Area who have been offered jobs in the NHS can take up their posts.

According to the journal, more than 1500 visa applications from doctors with job offers in the UK were refused entry between December 2017 and March 2018 as a result of the Home Office’s cap on the number of tier 2 visas issued to workers.

The campaign launches with a petition to Parliament aimed at demonstrating the strength of feeling against ‘red tape’ that prevents qualified doctors from overseas working here and comes as NHS trusts across the country have disclosed details of the number of medical posts that have been unfilled due to the Home Office rejecting visa applications.

Examples cited include University College London Hospitals NHS Trust, which has filed 19 tier 2 visa applications for eight doctors from outside the EEA since January 2018 of which none have been accepted, and at Nottingham University Hospitals, 18 doctors have had their tier 2 visa applications refused since December 2017, leaving increasing numbers of gaps in rotas including in specialties like spinal medicine, ENT, and neurosurgery.

It is anticipated that the number of tier 2 visas allocated each month will be reached for the sixth month in a row in May. The result is, say The BMJ, that hundreds of NHS posts will remain unfilled, putting extra pressure on overstretched staff and threatening the care of patients.

In a press release Fiona Godlee said:

“There’s a sort of madness in the current restrictions. The UK has always relied on and welcomed doctors from overseas. Now, just when we most need them, we are putting roadblocks in their way, and wasting precious money, time and international goodwill.” 

The campaign comes after the British Medical Association, 12 medical royal colleges, the organisation NHS Employers, and other professional bodies co-authored a letter to the home secretary, Sajid Javid on May 3, asking for the cap to be reviewed. The letter urged the government to exclude from the allocation process applications from workers in roles on the UK shortage occupation list, including nurses and some medical specialties.

The Royal College of Physicians, The Royal College of Paediatrics and Child Health, and the Royal College of Radiologists have indicated their support for The BMJ’s campaign, as has NHS Employers and the British International Doctors’ Association.

This latest concerted intervention by the professional medical community will re-ignite concerns about NHS understaffing and keep the spotlight firmly on immigration and staff recruitment issues in Post-Brexit Britain.

Homelessness and expense: The reality of the private rented sector

In the summer of 2017 the BBC aired ‘The Week the Landlords Moved In’? Indeed, The launch of the life-swap series was ironically contemporaneous with the Grenfell Tower tragedy, a disaster that continues to dominate the political agenda. The show focussed on exposing the problems with the private rented sector. 

In episode 1 when we meet Linda, the dichotomy between the ‘have’s’ and the ‘have-nots’ becomes clear, and we begin to understand the extent of the sector’s principal failings- affordability. Even holding down three jobs, this private tenant struggled to heat more than one room whilst facing a serious, yet regular shortfall in rent.

Despite narrowing the wider issue in its documentary form, the programme does highlight some harsh realities of the private rented sector. In exploring areas such as affordability and abject living conditions, ‘The Week the Landlords Moved In’ encapsulates all that is wrong with the current state of the sector. As time has progressed, its impacts have become increasingly more profound and widespread. Indeed, due to the lack of affordability, the loss of private tenancy remains the largest cause of homelessness in the UK, with over 18,500 households facing eviction from a privately rented home in 2016.

According to statistics derived from Shelter, the housing charity; private rents in 55% of local authorities in England are unaffordable. If this wasn’t chilling enough, the charity underlined its findings by stating that 38% of families with children have had to cut back on food purchases just to keep up with rent payments. Surely, it is morally objectionable that a choice between food or shelter still remains in 21st century Britain?

Undoubtedly the situation is dire. However, the private rented sector can serve a purpose. In the view of the former Housing Minister Grant Shapps, private landlords play an essential part in the provision of affordable housing, so much so that the government removed much of the regulatory red tape surrounding the sector. The former Minister also stated that the Government needed to play a more active role in house building. This has fallen to its lowest levels since the 1920s, meaning the dependency on private landlords is greater than ever. Indeed, with an increasing population, a lack of readily available social sector housing private landlords have found themselves in a highly favourable position. 

However, it is not only landlords that are to blame. The government has also failed in its role. We are currently experiencing a twenty-four year low in government house building (only 32,000 were built to the year of March 2016). Clearly then, the issue is not about the existence of private landlords, but the way in which they are allowed to operate. Indeed, for whilst the PRS is thriving, many tenants renting in this sector view it as simply unsustainable.

Having access to safe, affordable housing is fundamental, especially those who find themselves in the rental market. It is unsurprising then that such a right is recognised in Maslow’s hierarchy of needs as part of the foundation. Yet, it is becoming clear that there is still much to be worked upon if private renting is to remain sustainable. Indeed, according to the English Housing Survey, private rents consume 35% of household income; the highest of any bracket.

With these facts being recognised, it is important to more rigorously regulate the private rented sector. Indeed, efforts could be made to introduce a national body in which all private landlords are subject to. But perhaps most important of all is the need for the government to meet the demand of housing. The state must start building affordable homes once again or the problem will only worsen. 

EU label Tory Brexit strategy a ‘fantasy’

Negotiations with the EU have once again hit a dead-end as the EU labelled Theresa Mays proposals a ‘fantasy’ and that her latest customs plan would halt progress. The UK is still unable to overcome the problem of the Irish Border.

A senior EU official said the UK still lacked negotiating positions on a wide variety of issues and that it was “chasing the fantasy of denying the consequences of Brexit in a given policy area”.

If talks continue like this, a Brussels official close to Brexit negotiations warns that there would be no progress by the June meeting of the European Council.

News that Theresa May wants to align the whole UK with the customs union and single market on a time-limited basis until 2023 as a backstop to solve the Irish border issue was particularly poorly received in Brussels.
People familiar with the talks confirmed that this policy had already been raised by UK negotiators and that European Commission’s negotiators have already rejected the plan before its public announcement.

It would also mean the UK would take 7 years to exit and fully implement its Brexit plan.

“The regulatory alignment option is not available on the all-UK basis because it would amount to selective participation on the single market,” the senior EU official said, adding that the backstop “cannot be time-limited”.
“A backstop that would be strictly time-limited would defeat the purpose of a backstop,” they said, before making clear that the Prime Minister’s plan for a UK-wide backstop would have to be withdrawn if progress is to be made at the June European summit.

Analysis from Iwan Doherty- Editor in Chief

The Conservatives continue to be unable to solve the Irish Border problem, the EU know they have the UK caught between ‘securing its borders’ and satisfying the Good Friday Agreement. Theresa May’s commitment to end freedom of movement is causing her headaches, that not even watering down Labour’s plan can solve.

With the Customs Partnership now rejected May may have to turn to the plan outlined by Keir Starmer in creating a customs union with the EU or stay in either the customs union or the single market. However stronger Brexiteers might now opt to move to a Canadian style trade agreement with the EU, but fitting the Good Friday Agreement into Brexit is proving very challenging. Theresa May must be thankful that Stormont remains empty and therefore unable to pick the gaping holes in her plans.

The Brexiteers in her cabinet, however, are less than useless. The architects of Brexit have yet to bring 1 idea to the table and that former Remains are now doing all the work is a testament to how ridiculous Brexit has become.

To end this dispute, put the ball in the EU’s court.  Ask what they want to do to solve the Irish Border problem. If Westminster hasn’t got any ideas maybe Brussels does. The EU doesn’t want a hard border in Ireland, and tackling the problem from that direction will come to better results.

Brexit is looking softer by the day, and with EEA membership seemingly discarded, the future of our economy seems to be slipping into an abyss whilst reclaiming nothing from the EU.

Theresa May caught lying over Brexit….. again

It has been revealed that the UK is legally bound to pay it’s £39bn Brexit divorce bill before the details of a trade deal with the EU are agreed. This is a change to Theresa May’s promise that “nothing is agreed until everything is agreed”. This statement alluded to the fact that if Britain were to not get a trade deal it would not pay it’s divorce bill, a statement that has turned out to be completely false.

MPs will be asked to authorize the payment when they vote on the withdrawal deal in Parliament later this year. With the withdrawal agreed the EU would have no obligation to pursue a trade deal. The EU will include a political declaration to pursue a trade deal within the agreement but will be no legal obligation to do so.

Most independent auditors believe the divorce bill will be higher than the estimated £39bn.

Meanwhile, The Cabinet remains divided on Theresa May’s customs partnership, that would see the UK collect tariffs on behalf of the EU and include a time-limited customs backstop, which would keep the UK aligned with the EU on customs.  However, it is rumoured that this proposal will be rejected by the EU if the backstop would cease to exist in 2020.

Analysis from Iwan Doherty- Editor in Chief

The Conservatives lying to the population is not new. In recent cases, it has been to try and help their image but time and again this government has been caught lying over Brexit, not because they need to hide the truth but because they themselves don’t know what the truth.

We have seen this administration fail to grasp the basics of negotiating with the EU. Even those who have campaigned to leave the EU all their political career do not understand its basic internal and external economic workings. This has caused them to be disappointed by the realities of Brexit, whilst being completely outmanoeuvred by the EU.

Our lead negotiator David Davis showed his complete lack of understanding of the EU single market when he stated: “a UK-German deal would include free access for their cars and industrial goods, in exchange for a deal on everything else”. This is not possible under EU law. You negotiate deals with the EU, not individual countries.

Incompetence is driving us towards a Brexit cliff with no plan for what comes after. The complete idiocy and blindness of the government when negotiating Brexit has caused us to have countless problems whilst failing to exploit the advantages Brexit could hold.