Rolling coverage of all the day’s political developments as they happen, including Philip Hammond’s evidence to the Treasury committee about the autumn statement and Brexit
No 10 lobby briefing - Summary
Afternoon summary
Hammond’s evidence to the Treasury committee - Summary
7.53pm GMT
In principle certainty is always preferable to uncertainty. But if it’s a certainty of something very unfavourable then that’s not quite so good.
There could be quite significant physical infrastructure changes that need to be made at ports of entry and exit not only in the UK, but in continental Europe as well. There might be a need to train large numbers of people in anticipation of more intensive procedures at borders ...
It is true that in certain conceivable outcomes there would be a very substantial increase in the numbers of customs submissions and customs inspections. We are talking about - in EU trade - perhaps five times as many submissions and inspections being required. It could certainly add hundreds of millions of pounds to the cost of operating the customs services.
Programmes like science, technology, research and development, academic exchange programmes are hugely beneficial to this country and countries across Europe. We would very much hope we will be able to agree a format which allows us to continue to participate in those programmes.
Just because you have a system of controlling immigration does not mean you have to use it to slam all doors shut. I can’t conceive of any circumstance in which we would want to impede or prevent the flow of highly-skilled, highly-paid people ... I don’t think it is highly-paid, highly-skilled people that cause concern among our own population about migration numbers.
We recognise that the substantial increase in funding that social care will receive over this parliament is back-end loaded and we recognised that local authorities are challenged to deal with that pattern, that profile.
It is the case that local authorities in aggregate have been adding significantly to reserves. I think £9bn since the beginning of the last parliament. And local authorities will have to look at how they manage the situation to get from here to the very substantial increase in funding that will be available to them later in the parliament.
7.17pm GMT
Nigel Farage, the former Ukip leader, has been on LBC this evening. Asked about Philip Hammond’s comments about a transitional deal, he has accused the government of “backsliding”. These are from LBC’s Matthew Harris.
Nigel Farage re Phillip Hammond's comments on an EU transitional deal: "More backsliding...I don't like the look of it one little bit" [LBC]
Farage cont'd on Hammond's comments "Half Brexit is where they're going...I think theyre going to fudge & give us a Norwegian type deal" LBC
6.47pm GMT
It looks as if Philip Hammond might be treating himself to a pint after his committee appearance.
Phil Hammond and entourage making way from Commons to Number 11 via the Red Lion
6.33pm GMT
Correction: Earlier I said that Philip Hammond said a transitional deal might last longer than two years. (See 4.34pm.) Andrew Tyrie put it to him that two years was unlikely to be sufficient. I interpreted that as Tyrie meaning that a two-year transitional period would be insufficient, but, listening again to the exchange, it is clear that Tyrie was talking about the two-year article 50 period being insufficient.
Hammond said that “a longer period” would be necessary. But he was talking about a longer period than the article 50 two years, not a longer period than two years on top of that.
6.23pm GMT
Andrew Tyrie wraps up the session. He says it has been an interesting one.
I will post a summary shortly.
6.06pm GMT
Hammond says it is beyond doubt that some local authorities are facing challenges dealing with social care.
But he does not expect the Treasury to take charge of this, or issues like this. It will be for the relevant departments to take charge.
5.57pm GMT
Back in the committee Streeting asks why Hammond did not mention health and social care in the autumn statement.
Hammond says the government has agreed to give the NHS the money it needs for its five-year plan.
5.53pm GMT
Open Britain, which is campaigning for the UK to stay in the single market, has welcomed Philip Hammond’s comments about a transitional deal. It has released this statement from the Labour MP Stephen Kinnock.
It’s encouraging to see that Philip Hammond understands the need for a transitional deal to stop Britain falling into a hard, destructive Brexit that would take our economy over a cliff edge.
There is a growing consensus that agreeing a new trading relationship between Britain and Europe may take much longer than the two years specified by Article 50. Not signing a transitional arrangement would mean punishing tariffs which would hit British businesses and raise prices in the shops.
5.51pm GMT
Labour’s Wes Streeting, echoing the point made by Andrew Tyrie earlier (see 4.28pm), thanks Philip Hammond for publishing the distributional impact information that George Osborne refused to release.
Hammond says he has been able to publish this information by decile because new information is now available that was not available earlier to Osborne.
5.37pm GMT
The pound went up after Philip Hammond made his comments about a transitional deal, the FT reports.
The pound accelerates its gains after Philip Hammond repeats backing for transitional Brexit deal https://t.co/6gDcBSmd5v pic.twitter.com/y11Ag5eCqY
5.36pm GMT
Q: Michel Barnier and his European commission colleagues seem to be more interested in defending the integrity of the EU, whereas EU governments seem more interested in jobs. Do you agree?
Hammond says the commission is in charge of the negotiation. But member states will expect to have considerable influence over it, and the European parliament too. He says he expects all parts of the EU structure to have a role.
5.34pm GMT
Q: What might a transitional deal look like?
Hammond says during the two-year talks a clear end agreement could be agreed. But it could be decided to get there in stages.
5.33pm GMT
Chris Philp, a Conservative, is asking the questions now.
Q: The EU on average only spends 0.45% of GDP on international aid. France and Germany only spend 0.3%. The US only spends 0.2%. The OECD average is 0.28%. Could the government cut its aid spending.
5.31pm GMT
And here is Sky’s Faisal Islam on Philip Hammond’s transitional deal comments. (See 5.07pm.)
Strongest pro-transition words by UK minister, from Chancellor:
"Regulators" = @bankofengland.
"Thoughtful politicians" = most of Cabinet https://t.co/bAWt3r03FT
Also Hammond subtle shade over Brexiteer politicians who are anti-transition - apparently not "thoughtful" https://t.co/swvYiMBkdO
5.28pm GMT
Hammond says the decision to say the budget will be balanced, but in the next parliament, is a compromise. But it is the right one, he says.
5.24pm GMT
Here is the BBC’s Laura Kuenssberg on Philip Hammond’s transitional deal comments. (See 5.07pm.)
Also this avo Hammond near as dammit confirms there'll be transitional deal for leaving the EU cos article 50 can't do everything in 2 years
5.23pm GMT
Q: You want to get net debt below 90% of GDP by 2020-21.
Hammond says the rule is to get it falling by the end of the parliament. It is due to peak at just over 90%.
5.20pm GMT
The SNP’s George Kerevan is asking questions now. He is asking about the decision to increase the insurance premium tax.
Q: The OBR said there was a danger of this leading to people trying to avoid it through tax planning.
5.17pm GMT
Q: Should students be excluded from migration figures?
Hammond says they went over this the last time he was at the committee.
5.07pm GMT
Here is the key quote from Philip Hammond on the need for a transitional deal.
There is, I think, an emerging view among businesses, among regulators and among thoughtful politicians - as well as quite a universal view among civil servants on both sides of the English Channel - that having a longer period to manage the adjustment between where we are now as full members of the European Union and where we get to in the future as a result of the negotiations that we will be conducting would be generally helpful, would tend towards a smoother transition and would run less risks of disruption including, crucially, risks to financial stability which must be a fairly real concern ...
I don’t think we should approach this on the basis that we need transitional arrangements, because I think we can only get to a situation where we have a transition if there is a genuine meeting of minds on both sides of this negotiation ...
5.01pm GMT
Hammond announces that the government will donate the money raised from the VAT on the sale of the charity single being released to raise money for the Jo Cox Foundation to the foundation.
UPDATE: The Treasury has tweeted this.
.@PHammondMP confirms VAT on the sales of the Christmas single in memory of Jo Cox will go to the @JoCoxFoundation https://t.co/UbAxHHIzM9 pic.twitter.com/PAVIQAjnVD
4.57pm GMT
Rees-Mogg says that, although his mother-in-law was brought up in Wentworth Woodhouse, his family gains no personal benefit from Hammond’s decision to spend £7.6m on it in the autumn statement.
Hammond says he was not aware of the link when he made the announcement.
4.55pm GMT
Q: Do you accept unilateral free trade is advantageous to the UK consumer?
Yes, says Hammond, because that would reduce the cost of imported goods.
4.53pm GMT
Q: If the UK needed to spend more on border checks, would that be because of Britain’s decision to impose tariffs?
Hammond says it would not just be about tariffs. There would be other checks to be imposed.
4.49pm GMT
Back in the committee Jacob Rees-Mogg, the Conservative leave supporter, is asking questions now.
Q: What are your views on free trade?
4.46pm GMT
Philip Hammond’s comments about wanting a transitional deal put him at odds with David Davis, the Brexit secretary, who has played down the need for one.
At the end of last week the Financial Times (subscription) published the memo of a meeting Davis had with City of London Corporation about Brexit on 15 November. The memo was written by a City of London Corporation representative. This is what it says about Davis’s views on a transitional deal.
Stated that he was “not really interested” in the discussion around the arrangements, did not foresee any benefits and could be perceived as a delay to the process that is not something the Government can abide.
However, expressed concern that there is an argument that the stability of the EU could be compromised by the UK’s “sudden” departure from the EU — the regulatory upheaval and potential for systemic risk could result in serious negative consequences for the whole of the EU. Davis emphasised the PM’s conference speech, in which it was stated that the UK Government wants a strong UK and a strong EU. He went on to say that if the EU, rather than UK stakeholders, want to have transitional arrangements he would be “more in favour. I will be kind”.
4.42pm GMT
Hammond says not all EU funding is value for money.
He says he has committed to funding projects that get EU funding after Brexit. But he would want to know that they represent value for money, he says.
4.38pm GMT
Labour’s Helen Goodman asks if it is true that the government might have to spend hundreds of millions on beefing up customs arrangements after Brexit.
Hammond says it would depend on what the Brexit deal is, but he says it could end up costing the UK that much if new border controls have to be installed.
4.34pm GMT
Q: How long would it last?
Hammond says “quite significant” infrastructure changes might be needed at ports, in the UK and in the EU. And new staff might have to be hired. The more we go into this, the more we may conclude that the longer we need.
4.32pm GMT
Q: So this will be a key negotiating demand?
Hammond says he would not put it like that. He thinks it will be in the interests of both sides to reach an agreement on a transitional deal.
4.30pm GMT
Tyrie asks Hammond if he favours a transitional deal for when the UK leaves the EU.
Hammond says that would be “generally helpful” because there would be “less risk of disruption”.
4.28pm GMT
Philip Hammond, the chancellor, is giving evidence to the Treasury committee.
He starts by denying the claim in the Times that Theresa May stopped him from including a council tax increase to fund social care in the autumn statement. (See 9.08am.)
Chancellor Philip Hammond denies No.10 stopped him announcing more cash for social care in autumn statement: “No"
Philip Hammond denies any feud/split/row with Theresa May over social care "No" truth to the claims
4.13pm GMT
Now @mowat4ws is answering UQ on social care funding. Begins with tribute to 1.4m professional and 6m 'informal' carers
.@mowat4ws accepts and acknowledges social care system under pressure but points to different approaches by local councils
3.55pm GMT
Conservative former cabinet minister Lord Prior has died, the Press Association reports. He was 89.
Jim Prior served for five years in Margaret Thatcher’s cabinet where he was regarded as one of the leading “wets” who opposed her monetarist economic policies.
Originally appointed employment secretary when she became prime minister in 1979, he was moved to the post of Northern Ireland secretary two years later.
3.43pm GMT
Dr Caroline Johnson has just been sworn in in the Commons as the new MP for Sleaford and North Hykeham.
3.10pm GMT
Theresa May gave a speech to a Conservative Friends of Israel lunch today. Here is the full text and here are the key points.
Let me be clear: it is unacceptable that there is anti-Semitism in this country.
It is even worse that incidents are reportedly on the rise.
I couldn’t be clearer: the boycotts, divestment and sanctions movement is wrong, it is unacceptable, and this party and this government will have no truck with those who subscribe to it.
Let me be clear: no British taxpayers’ money will be used to make payments to terrorists or their families.
It is right that Priti Patel has called for an examination of aid spending in the Occupied Palestinian Territories to ensure that every penny is spent in the right places and in the right way.
When talking about global obligations, we must be honest with our friends, like Israel, because that is what true friendship is about.
That is why we have been clear about building new, illegal settlements: it is wrong; it is not conducive to peace; and it must stop.
On the 2nd of November 1917, the then foreign secretary – a Conservative foreign secretary – Arthur James Balfour wrote: “His Majesty’s government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country.”
It is one of the most important letters in history.
Prime Minister @theresa_may: Israel is "a thriving democracy, a beacon of tolerance, an engine of enterprise" pic.twitter.com/tY9bT4kOrE
2.13pm GMT
Yesterday Diane Abbott, the shadow home secretary and close ally of Jeremy Corbyn, predicted that Labour would improve its standing in the opinion polls in 2017. “I’m confident we’re going to close the gap in the coming 12 months,” she said. “We’ve had a pretty difficult 12 months, partly Jeremy’s enemies in the party, partly commentators, but we have the right policies and the right leader.”
In theory doing better shouldn’t be hard - because Labour’s current poll figures are terrible. Here are the latest Guardian/ICM figures which give the Conservatives a 14-point lead. (Admittedly that’s two points down on the ICM figures from two weeks ago.)
1.11pm GMT
There are three urgent questions in the Commons today.
3 UQs today - Care funding from @KeeleyMP 21st Century Fox bid for Sky from @KevinBrennanMP and UK policy in Yemen from Keith Vaz
12.56pm GMT
Here is a full summary of the Number 10 lobby briefing.
More broadly, we know what money alone is not the solution ... It is not all about money. There are other issues to be addressed alongside that ... We do think there’s a significant variety in how councils manage social care services ... We think it’s to do with management.
Our view on this is that the the UK is leaving the European Union. We have been taking the time to prepare for the negotiations because we want a smooth and orderly departure. Those remaining in the EU also need to have discussions about how they are going to handle the departure process. That is reasonable. We would expect that.
The prime minister is extremely concerned about how this is affecting commuters. It is an unnecessary strike that will cause major disruption. No jobs are being lost and no pay is being cut and yet millions of commuters are being affected. The transport secretary [Chris Grayling] has offered to talk to the unions to try to understand what it will take to reach a resolution. This offer has not yet been taken up.
Government has already done work with a number of sports bodies on governance. That’s why a new code for sports governance has been agreed that comes into effect next April. It’s for the FA to decide how they respond to that. They themselves have been clear that there are improvements to make to governance and they are committed to doing that.
What could be making news - May v Boris rift, social care crisis & Brexit confusion.
What is - leather trousers
FI Hill deserves a pay rise
12.13pm GMT
I’m just back from the Number 10 lobby briefing. Here are two of the key lines.
10.58am GMT
Amber Rudd, the home secretary, has announced that she is banning National Action, a neo-Nazi group, under the Terrorism Act 2000. It is the first rightwing group to be banned as a terrorist organisation, the Press Association reports.
Rudd said in a statement:
As home secretary, I am clear that the safety and security of our families, communities and country comes first.
So today I am taking action to proscribe the neo-Nazi group National Action.
10.49am GMT
At the end of last week the Guardian revealed Nicky Morgan, the former education secretary, had been disinvited from a meeting with Theresa May after criticising May for wearing £995 trousers.Yesterday we learnt that Morgan’s comments triggered an angry response from Fiona Hill, May’s co-chief of staff.
Today the Daily Mail, which is probably the most pro-May of all the rightwing papers at the moment, has leapt to May’s defence with a two-page hatchet job on Morgan. It starts:
Nicky Morgan was under attack last night for criticising Theresa May over her expensive taste in trousers – despite having a £950 handbag herself.
The MP – nicknamed Ms U-turn for her frequent changes of policy when she was Education Secretary – has been pictured on numerous occasions carrying the luxury oxblood brown leather Bayswater bag from upmarket brand Mulberry.
10.34am GMT
The King’s Fund, the health thinktank, has published a blog arguing that giving councils the power to raise more money for social care by raising the care precept is “deeply flawed” as a solution to the care funding crisis. Here’s an excerpt.
Our analysis of how the precept has been used by councils this year (2016/17) shows that it is deeply flawed as a way of securing sustainable funding for adult social care. It was used by 95 per cent of councils, but raised just £382 million – less than 3 per cent of what councils plan to spend on adult social care. It will not even cover the £612 million estimated cost of the National Living Wage this year, let alone demographic and other cost pressures. There is some evidence of public willingness to pay more for good care, but £23 added to the average annual band D Council Tax bill will not sort the social care funding crisis. Increasing the precept from 2 to 3 per cent would barely make a dent in this, and many councils will be mindful of the impact of council tax rises on working families with low incomes.
A second, deeper problem is how extra money raised by the precept is distributed, as the places with the greatest need for extra funding will raise the least through the precept. A reasonable proxy measure of social care need is the extent of income deprivation among older people. On this measure, the 10 least deprived council areas this year will raise almost two-and-a-half times as much from the precept as the 10 most deprived. The amount raised per head of the adult population varies from £5 in Newham and Manchester, to £15 in Richmond on Thames (£10 in the Prime Minister’s Maidenhead constituency). If anything, more deprived areas have suffered bigger cuts in spending, so the precept will widen existing inequalities. The government says it tends to equalise these differences through the new ‘improved’ Better Care Fund, but it is not clear how this will work in practice. If social care is part of the Prime Minister’s promise of a more equal country that works for everyone, then the precept is a poor policy instrument to achieve it.
10.06am GMT
Stephen Dorrell, who was health secretary in John Major’s Conservative government in the 1990s and chair of the Commons health committee in the last parliament, was also on the Today programme talking about social care. Here are the key points he made.
What we are talking about this morning is a cash shortage that is threatening the stability not just of local government but of the national health service. And unless we address this seriously we will simply see a developing failure of service across the range of local public services and people will suffer as a consequence of that failure ... People find they cannot have access to care homes so they end up in emergency departments, in A&E departments, in GP surgeries.
9.53am GMT
Here is more from the Today programme’s interview with Izzi Seccombe, the Conservative leader of Warwickshire county council and chair of the Local Government Association’s community and wellbeing board.
We need £1.3bn now because there is a shortfall by the end of 2020 of £2.6bn.
And the problem then is that you are trying to integrate health with social care, and yet your health system is based on national taxation.
9.33am GMT
The government has not actually denied the Times story. (See 9.08am.) “We’re not commenting on speculation,” a Number 10 source said. And, in response to a question about whether Sajid Javid, the communities secretary, would be announcing plans to let councils increase the social care precept, the communities department referred me to a statement the department of health issued overnight in response to the Times story. It just says:
We are giving local areas access to up to £3.5bn extra for social care by 2020. While many areas are already providing high quality services within existing budgets, the Better Care Fund, which brings together health and social care provision locally for the first time ever, will get additional funding in the next few months to raise standards further. This government is committed to ensuring those in old age throughout the country can get affordable and dignified care.
9.20am GMT
Yesterday the Observer published a big investigation highlighting the crisis in social care.
Here is the Observer splash.
Related: Shock figures show Tory plans are ‘making social care worse’
The Observer’s investigation reveals that the landmark government scheme designed to relieve the strain on overcrowded hospitals – the Better Care Fund – is failing to deliver its aims of keeping older people healthy at home and so cutting “bedblocking”, despite £4bn a year being poured into it.
Theresa May and the health secretary, Jeremy Hunt, have repeatedly claimed that the fund, and a separate policy of allowing councils to raise more money for social care by increasing council tax, are jointly addressing the spiralling problems in social care.
Related: Underfunded and overstretched – the crisis in care for the elderly
The government points to the introduction of the social care precept, a new measure allowing councils to charge an extra 2% on top of their council tax rates to pay for care services from this year. But new analysis by the King’s Fund exclusively for the Observer shows the precept will raise just 3% of what councils are already spending on social care this year. The 10 most affluent areas will raise more than twice as much as the 10 most deprived areas, further widening inequalities in older people’s access to care. Another source of extra funding, the Better Care Fund, will not kick in substantially for another few years.
9.08am GMT
The Times has a strong splash this morning (paywall). It says the government will this week announce plans to let councils put up council tax to fund social care. Its story starts:
Theresa May will back steep rises to council tax bills this week in an attempt to plug a gaping hole in social care funding.
Warnings of an “absolute crisis” in the industry have prompted the prime minister to drop her opposition to the increases, as the government strives to prove that it is facing up to the ballooning costs of caring for Britain’s ageing population.
TIMES: Social care forces Mayvto raise council tax #tomorrowspaperstoday #bbcpapers pic.twitter.com/zpsbKHaKH2
We’ve had some dialogue with ministers about this and the concern for us is the ability for this to actually fill the gap that we have for long now said that there is in social care.
Related: Raising council tax will 'increase postcode lottery' in social care
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