Brexit

Julian Smith has his work cut out as Chief Whip. As well as trying to stop Tory MPs firing off letters to 1922 Committee chairman Graham Brady, Smith must try and keep both Tory Remainers and Tory Brexiteers in line. In a bid to do this, Smith met with the European Research Group – the all-powerful Brexit wing of the Conservative party – this week to try and ease concerns that the government is about to water down the version of Brexit it is seeking. Now Jacob Rees-Mogg is chair of the ERG, the group is seen to have greater potential for trouble. So, what was his strategy? Serving cake. A Victoria sponge cake was brought out to keep the rebels at bay – reports that the cake was homemade are yet to be confirmed or denied.

The good news is that the latest civil service analysis of the most likely impact of Brexit is more optimistic than previous civil service estimates of Brexit’s consequences for the British economy. The bad news is that they’re still pretty gloomy. The best case scenario, modelled for officials at the Department for Exiting the EU, envisages a two per cent hit to GDP by the 2030s. The worst, trading in a 'No deal is better than a bad deal' environment, suggests an economy eight per cent smaller than would otherwise be the case.  As Brexit bonuses go this seems on the thin side. No wonder the reaction to Buzzfeed’s scoop on the latest analysis is an exercise in proving the reality of confirmation bias.

There are many things to worry about with Brexit, but the terms of the transition should be pretty low down that list. The transition was always going to have to be off-the-shelf (if you could negotiate a bespoke transition, you might as well do the final deal) and as long as it is time-limited, it shouldn’t be a problem. Indeed, it should help smooth out Britain’s exit from the European Union. Bill Cash’s urgent question today was another sign of how some Tory Eurosceptics are becoming more and more concerned about the terms of the transition, and how it will make Britain—in effect—a non-voting member of the EU. Jacob Rees-Mogg’s charge that it makes Britain a ‘vassal state’ has resonated with many of them.

How much trouble is Theresa May in? Just three weeks ago, it looked as though the Prime Minister was at her strongest point since the disastrous snap election. Now, the BBC 10 o'clock news is leading on questions about her survival – with reports of irrepairable drift, Brexit rifts. The Sunday papers are filled with a deluge of negative headlines depicting a party out of control – including on-the-record criticism from Conservative MPs. Former minister Theresa Villiers has gone on the airwaves to warn that the Prime Minister could be about to sell a lie on Brexit. What's more, reports claim that the influx of letters to Graham Brady continues to rise. Although there is still no obvious successor to May, something has changed in the mood of her party in the past week.

Boris Johnson and Philip Hammond are further apart on Brexit than anyone else in the inner Cabinet. But there is one thing they agree on, I say in The Sun this morning. In the last 10 days, both of them have expressed their frustration to close allies that Theresa May won’t make a decision; that Britain is at a nation-defining moment in its history and that there is no real leadership. Their interventions are an attempt to provide that leadership, to give people an idea of what Brexit will be like. Absurdly, the Brexit inner Cabinet did not meet this week despite the fact that there is not yet a detailed UK position on what trade deal it wants with the EU. This lack of a position is creating the vacuum that both Boris and Hammond are trying to fill.

A decade ago, bankers were not merely the masters of Davos, but the ‘masters of the universe’. No one calls them that any more. It is a mark of how far the global economy has shifted that the market capitalisation of Goldman Sachs was this week overtaken by that of Netflix, the online entertainment company. The world’s five largest companies are now all in the field of technology and the internet: Apple, Google, Microsoft, Amazon and Facebook. Ten years ago, none of them made the top five: the masters, then, were Exxon, Walmart, China National Petroleum and the Industrial and Commercial Bank of China.

There’s renewed speculation in Westminster that Britain might end up staying in the customs union. The CBI is calling for the UK to stay in a customs union with the EU and Labour is expected to move to backing customs union membership soon. The argument goes that because customs union membership does not require free movement, it is compatible with the referendum result. Big exporting businesses tend to like the idea as it would ease most of the bureaucratic problems in moving goods around post-Brexit. But I don’t think Theresa May will go for this idea. If Britain stays in the customs union, then it can’t do comprehensive free trade deals with other countries; all it could do would be services only agreements.

This post first appeared in the Spectator's Evening Blend email, a free round-up and analysis of each day's politics. Sign up for free here. Why is Boris Johnson quite so keen on improbable-sounding bridges? The Foreign Secretary became obsessed with the idea of a ‘garden bridge’ across the river Thames when he was Mayor, a project that was cancelled by his successor Sadiq Khan after it became clear that public money would be needed to build the structure, which would then not always be open to the public. Unabashed, Boris is now suggesting something much bigger and more eye-catching: a bridge across the Channel to France. Johnson was talking about major infrastructure projects when he suggested the bridge, which is apparently technically possible.