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Labour leadership: Owen Smith proposes £3bn wealth tax – as it happened

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Rolling coverage of all the day’s political developments as they happen, including Owen Smith’s Labour leadership speech

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Wed 27 Jul 2016 18.53 EDTFirst published on Wed 27 Jul 2016 04.21 EDT
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Afternoon summary

  • Theresa May has said she has an “open mind” about what trade relationship the UK should have with the EU, and does not just want to copy an existing model. (See 2.36pm.)

That’s all from me for today.

Thanks for the comments.

Theresa May receives a ceremonial welcome at she arrives in Italy to meet the prime minister Matteo Renzi (right) Photograph: Serrano'/AGF/REX/Shutterstock

3 politics books reviewed

One of the perks of my job is that I get sent a lot of new politics books. Here are three that I have not mentioned in the blog already which I would recommend.

How to Win a Marginal Seat by Gavin Barwell - Dozens of books about politics get published every year but there are surprisingly few that cover the mechanics of what it takes to get elected. Barwell won Croydon Central for the Tories in 2010 with a majority of just under 3,000 and in this campaign memoir he writes about the tactics he employed to keep his seat in 2015. (They worked - he beat Labour by 165 votes.) It’s candid, highly readable and even, if you like electioneering, moderately gripping. If you want to become an MP you should definitely read it, but anyone interested in the craft of politics can learn from it too.

Sample extracts:

I could tell from the responses I received [to mass emails sent out to constituents] and from the number of people who unsubscribed which ones were a hit and which ones irritated people. The lesson was clear: the emails needed to be personal, setting out my views instead of just repeating the party line. They also needed to be timely - about something that people might just have seen on the news or a current local issue.

There was one policy in our manifesto, however, that was making a difference on the doorsteps: our promise to give tenants of housing associations the right to buy their homes at a discount. Council tenants already had this right, but for the last 30 years most new social housing had been developed by housing associations and their tenants did not, which seemed unfair. We would put this right.

I suspect that if I had conducted a poll right across my constituency this would not have been one or our more popular policies. However, the people who did not agree with it tended not to be Conservative supporters or, if they were, they didn’t object to this policy strongly enough to change the way they voted. For people who lived in housing association properties, on the other hand, it was a vote-deciding issue.

Gavin Barwell campaigning in Croydon Central with Boris Johnson Photograph: Teri Pengilley (commissioned)

Reflections: Conversations with Politicians by Peter Hennessy and Robert Shepherd - This is a collection of the transcripts of 11 Radio 4 interviews conducted by Hennessy, with a brief introductory essay. The interviewees are: Shirley Williams, Jack Straw, Norman Tebbit, Neil Kinnock, John Major, Roy Hattersley, David Steel, Margaret Beckett, David Owen, Nigel Lawson and Clare Short. Hennessy is the zoologist who went to live in the safari park - he’s the pre-eminent historian of postwar government who got himself a seat in the House of Lords, enabling him to study his subjects close up - and as a result these interviews are unusually informed and revealing. They have all been broadcast, between 2013 and 2015, but reading them as a collection highlights certain common themes, not least the fact that quite of few these figures believe that despite holding high office they managed to change very little.

Sample extracts:

(From Jack Straw’s interview)

I had lots and lots of training [for taking decisions about authorising decisions to intercept a passenger plane in the event of a British 9/11] and I carried on that responsibility right until the end of the government in 2010. There was one terrifying Boxing Day when we were having lunch with friends in the Cotswolds, as we usually do on Boxing Day, and Downing Street got hold of me. I was put through to the control and they told me they couldn’t find the prime minister, but they’d got this aeroplane, a passenger plane, coming in to land. They’d lost all contact with it, and did we scramble planes? So for about 20 minutes, I was the man who was having to decide whether to send the fighters up, and I got them ready, then Tony took over and by that stage, after lots of signals to this aeroplane, the pilots had woken out of their stupor and got back in contact with the control tower. But we could have taken that plane down.

(From Norman Tebbit’s interview)

It was not Churchill that created Nato, it was Attlee ... Ernie Bevin in particular, one of the truly great men of British politics, in my judgment ... There is no doubt whatsoever in my mind that in any really great contretemps that Attlee and Bevin and I would have been on the same side.

Peter Hennessy. Photograph: Sean Smith/The Guardian

The European Union: A Citizen’s Guide by Chris Bickerton - It is quite a feat to write a scholarly book about the EU that’s clear, original and highly readable, but Bickerton has managed it. It’s a thematic history of the EU, with particular focus on its democratic shortcomings. It was published shortly before the EU referendum, but it deserves to outlast the Brexit campaign - although obviously the title will need to be changed if this ever gets reprinted

Sample quotes:

Only when texts [of EU laws] reach the third reading are they debated in plenaries, with the political partisanship of MEPs driving the debates. Only a fraction of draft laws ever reach that stage. The legislative life of the EU is centred around small and select clusters of people, meeting behind closed doors and hammering out agreements that both sides can be happy with. It is no coincidence that the parliament’s greatest triumph, the Spitzenkandidat process, was the result of a behind-the-scenes coup d’etat and carried out by a select few parliamentarians. That is one reason it had no discernible effect on raising the turnout at European elections.

Whereas Eurosceptics in the past had believed in the glory and honour of their national political traditions, today they are more likely to believe that their national political establishments are run by, and for, crooks. The term ‘Euroscepticism’ - describing a stand-alone ideology based on hostility to the process of European integration - has lost its object. It has become reabsorbed into the changing political currents of the European continent.

EU flags flutter outside the EU Commission HQ in Brussels. Photograph: Francois Lenoir/Reuters

Central Bank of Ireland says Brexit will have 'negative and material' impact on Irish economy

Brexit is putting the brakes on Ireland’s economic bounce-back, the country’s banking chiefs have warned. As the Press Association reports, Dublin’s Central Bank has downgraded forecasted growth over the next two years as a result of the shock referendum result. In its latest quarterly report, it said the UK’s decision to leave the EU will inflict a “negative and material” blow to Ireland’s economy, presently the fastest-growing in the bloc.

The close relationship between the Irish and UK economies creates a particular exposure for the Irish economy from Brexit. Both in the short-term and in the longer-term, the economic impact of Brexit on Ireland is set to be negative and material. Quantifying the impact with much precision, however, is difficult.

Here is a short Labour leadership reading list.

Me: Is being anti-austerity a new thing.

Caller: No he has always been anti austerity.

Me: Oh. It doesn’t seem to be working. But also hasn’t the Labour Party always been anti-austerity?

Caller: No Jeremy has changed that

Me: But didn’t Gordon Brown in 2009 bring all the G20 leaders together and commit them all to a growth plan to get us out of the financial crisis rather than to all cut back. I thought Labour had been anti-austerity since 2009?

Caller: Well I don’t remember that, but Ed Balls.

Me: What about Ed Balls?

Caller: Well he was arguing for cuts

Me: Isn’t that what john Mcdonnell is arguing for?

Caller: No

Me: But hasn’t john mcdonnell said he wants to have the same fiscal rule as Ed Balls?

Caller: I’m not sure but...

Me: I think they have both said that they want to eliminate the current budget deficit but leave space for borrowing for capital?

Caller: Yes but there is a much bigger emphasis on investment, john mcdonnell wants to invest

Me: What in?

Caller: Well in growing the economy

Twentieth-century social democracy was always about electing other people to do our bidding. It’s the parliamentary road to socialism we have heard about recently (rather than the revolutionary road). And this is underpinned by the role MPs played in that process.

But that worked when MPs and the central state could make the political weather. Increasingly, we can’t. Increasingly, power is both global and local, with corporations and citizens – not with MPs.

Changes that are being enhanced by technological innovation (social media being a case in point) are happening at an increasing rate. The top-down, vertical power relationships of the past are being replaced by a more evenly distributed, bottom-up variety.

It could be reasonably argued the current fault line between the “membership” and the parliamentary Labour party (PLP) is in fact a symptom of this changing power relationship.

So let me be clear – Corbyn is the best candidate because, in his own way, he understands some of the economic and moral challenges we face, and is the product of a deep desire for something new.

Smith says Labour should fight to keep UK in EU

And here’s the quote from Owen Smith’s Q&A when he said Labour should fight to keep the UK in the EU.

I also think time is now right for Labour to argue, even in parts of the country, like mine and like here where the referendum went against us, where people voted to leave, let’s see the truth of what this Brexit is going to look like. Let’s wait til we’ve got to the end of the 18 months or so when we’ve negotiated - tough negotiation, not the sort of hard Brexit we’re likely to see from the Tories - let’s negotiate for the sort of European relationship people want in this country, and then let’s trust them again, either in a second referendum or in a general election. Because I think we’ve got to fight in Labour to be in Europe still. I fundamentally believe we are better off in Europe and I’m going to fight for it. Jeremy [Corbyn] might not want to fight for it, but I’m going to fight for it.

In answer to a later question, Smith made it clear that he thought that, if there was a second referendum, one of the options should be remaining in the EU. (See 11.44am.)

The Shrewsbury 24 campaign has defended John McDonnell’s record on employment rights. Responding to Owen Smith’s comments earlier (see 2.55pm), a spokesman for the campaign said:

It is thanks to the guidance and hard work over many years of John McDonnell MP that our campaign to overturn a miscarriage of justice for the Shrewsbury 24 pickets has been so successful. With his support we have raised the profile of our case which is 43 years old. He has always made time to discuss any problems which we have faced even though he is a busy constituency MP. We need more MPs like him.

Here is the Labour MP Jess Phillips on Owen Smith’s comment about wanting Labour to “smash” Theresa May back on her heels.

I don't like the terminolgy of smash very much but lets be honest it is a clumsy way of saying outperform, I like the heels bit less tbh

— Jess Phillips MP (@jessphillips) July 27, 2016

I will speak to Owen when I see him and I expect deeds lots of deeds on women, that is what matters.

— Jess Phillips MP (@jessphillips) July 27, 2016

Owen Smith apologise for saying Labour should 'smash' Theresa May back on her heels

Rowena Mason
Rowena Mason

Labour leadership challenger Owen Smith has apologised for saying Labour should do more to “smash” Theresa May back on her heels.

After criticism of his choice of language, a spokesman for Smith said:

It was off script and on reflection it was an inappropriate choice of phrase and he apologises for using it.

The Jeremy Corbyn campaign has responded to the claim that Corbyn and John McDonnell have not been working on policies for employment rights. A spokesperson for Jeremy for Labour said:

Employment rights have been front and centre for John McDonnell in the past 10 months as shadow chancellor and throughout his campaigning life. He launched the Institute of Employment Rights “Manifesto for Labour Law” on 28 June, which included a policy to reinstate the ministry of labour. Jeremy Corbyn has also proposed reinstating the Ministry of Labour, notably during last year’s leadership campaign.

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Owen Smith says shadow cabinet has been 'devoid of ideas'

Back to Owen Smith, and this is what he said during the Q&A after his speech when it was put to him that John McDonnell has been saying that he proposed setting up a ministry for labour. Smith replied:

All I would say, and I don’t know whether the rest of the room wants to correct me, but it passed me by. I think it passed the country by, if John announced that he was going to do something about employment rights and create a minister for labour. So it was a very sotto voce announcement that he made.

And, truthfully, that’s the problem. We have not been strong enough in taking the fight to the Tories. We have been a weak opposition over the last nine months. John and Jeremy, for all their good intentions, have been weak.

And worse than being a weak opposition, we have not laid out, I think, in anything like the detail a credible prospectus for government. Let’s be clear. Two weeks ago now I announced that we should have a £200bn investment programme, a Keynesian investment programme ending austerity. For the last nine months Jeremy has just been walking around the country saying he wants to end austerity without describing at all what he wants to put in its place. And John McDonnell says I’ll see your £200bn and I’ll raise you three for £500bn. Well, fine, if he wants to be even more ambitious than I am, that’s great.

But I’m not going to be blown of course from doing what I think is right. And if John agrees with me, that just marvellous.

Smith was referring to these plans McDonnell announced last week.

Then, when asked if any of this was discussed in the shadow cabinet when he was a member, he replied:

Not once. Not once in the last nine months in which I’ve served in the shadow cabinet have I heard a single debate being led by John McDonnell about a minister for labour. Not once have I heard a single debate led by John McDonnell about rights at work ... It has been devoid of ideas quite often. Now, there are lots of reasons for that. But I tell you straight; it’s about time Labour pulled its socks up.

Owen Smith speaking at the Knowledge Transfer Centre in Catcliffe, South Yorkshire Photograph: John Giles/PA

Theresa May's press conference in Rome - Summary

Here are the key points from the May/Renzi press conference.

  • May said she had an “open mind” about what trade relationship the UK should have with the EU, and did not just want to copy an existing model.

We have a very clear message from the British people in the Brexit vote, that they want us to bring in some control on free movement. They don’t want free movement rules for movement of people from the European Union member states into the UK to operate as they have done in the past. And we will deliver on that.

But, on the other side, we do of course need to ensure that we get the best possible deal in relation to trade in goods and services. And I’m looking at this with an open mind. I think we should be developing the model that suits the United Kingdom and the European Union, not adopting necessarily a model that is on the shelf already, but saying what is going to work for the UK and what is going to work best for the European Union in ensuring that we can maintain that economic relationship which has been of benefit to us in the past.

  • She said that she intended to be able to guarantee the rights of EU citizens living in the UK - provided the rights of Britons living on the continent were respected. She said:

On the issue that you raise of Italian and other EU citizens who are living in the UK, I want to be able to guarantee their rights in the UK, I expect to be able to do that, I intend to be able to do that, to guarantee their rights. The only circumstances in which that would not be possible would be if the rights of British citizens living in other EU member states were not guaranteed. But I hope that this is an issue we can address early on.

  • She called for further intelligence-sharing in Europe in the light of the recent terror attacks. She said:

Yesterday’s attack in northern France on an innocent Catholic priest in a place of sanctuary and peace was yet another brutal reminder of the threat that we all face. Following on from the atrocities in Nice and Germany, it reinforces the need for action both in Europe and on the wider global stage. In Europe, we must increase further our intelligence co-operation and share vital information swiftly and effectively, enabling us to better protect ourselves from these terrorists who seek to destabilise us.

Italian prime minister Matteo Renzi and Theresa May during a press conference in the garden of Villa Doria Pamphili in Rome. Photograph: Tiziana Fabi/AFP/Getty Images
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May says she has an ‘open mind’ as to what trade deal with EU will be best for UK

May says Liam Fox’s comments yesterday were about the interaction between customs unions and free trade agreements.

She says the Brexit vote was clearly a vote for controls over immigration. She will deliver on this.

But she wants the best possible deal on trade. She is looking at this with an open mind, she says. She will choose the best deal for the UK. It might not necessarily be the same as the model adopted by other countries.

  • May says she has an ‘open mind’ as to what trade deal with EU will be best for UK.

Renzi said Brexit is Brexit. The discussion cannot now be re-opened. If EU leaders were to do that, they would be rejecting the idea of democracy, she says.

And that’s it. The press conference is over.

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