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Brexit: Gauke hints he may rebel ahead of knife-edge vote intended to stop no-deal prorogation - live news Brexit: Gauke hints he may rebel ahead of knife-edge vote intended to stop no-deal prorogation - live news
(31 minutes later)
And here is an extract from what the OBR report says about a no-deal Brexit.
In Chapter 10 we carry out a fiscal ‘stress test’ that quantifies the impact on the public finances of a particular no-deal, no-transition Brexit scenario, namely the less disruptive of the two presented by the IMF in its April 2019 World Economic Outlook. While it is a scenario, rather than a forecast, it is nevertheless useful for exploring the channels through which the public finances might respond in the case of a no-deal Brexit.
Heightened uncertainty and declining confidence deter investment, while higher trade barriers with the EU weigh on exports. Together, these push the economy into recession, with asset prices and the pound falling sharply. Real GDP falls by 2% by the end of 2020 and is 4% below our March forecast by that point. Higher trade barriers also slow growth in potential productivity, while lower net inward migration reduces labour force growth, so potential output is lower than the baseline throughout the scenario (and beyond). The imposition of tariffs and the sterling depreciation raise inflation and squeeze real household incomes, but the monetary policy committee is able to cut bank rate to support demand, helping to bring output back towards potential and inflation back towards target.
Borrowing is around £30bn a year higher than our March forecast from 2020-21 onwards. Lower receipts – in particular income tax and NICs (due to the recession) and capital taxes (due to weaker asset prices) – explain most of the deterioration. These are partly offset by lower debt interest spending (thanks to lower interest rates and RPI inflation) and the revenue raised customs duties (which are treated as EU rather than UK taxes in the baseline). Higher borrowing and the assumed rollover of Term Funding Scheme loans leave public sector net debt around 12% of GDP higher than our March forecast by 2023-24.
The OBR also says this stress test is “by no means a worst-case scenario under a no-deal, no-transition Brexit”.
The Office for Budget Responsibility’s 300-page Fiscal Risks Report is here (pdf).
My colleague Graeme Wearden is covering the publication of the Office for Budget Responsibility’s Fiscal Risks Report on his business live blog here.
No-deal Brexit 'would send UK into recession', forecasters fear - business live
The blog also has a link to a live feed from the OBR’s press conference.
This is from Sky’s Ed Conway.
Breaking: @OBR_UK warns that a no deal Brexit could cause leave a £30bn hole in the public finances
MPs trying to use parliamentary votes to stop a no-deal Brexit have not had much luck recently. Last month the government comfortably defeated a Labour attempt to allow backbenchers to take control of the Commons timetable which, if passed, might have allowed a bill opposing no-deal to be passed. Last week the Speaker refused to call a Dominic Grieve amendment that would definitely prevented the next prime minister proroguing parliament in the autumn to facilitate a no-deal Brexit. Grieve also lost votes on two other related amendments. But he did win a vote on a move saying the government would have to publish fortnightly reports in the autumn on progress towards restoring the power-sharing executive in Northern Ireland. He acknowledged that this on its own would not necessarily stop an autumn prorogation, but he said he hoped peers would beef it up in the Lords. But even this relatively anaemic amendment only passed by one vote, and that was just because a government whip, Jo Churchill, forgot to cast her vote.MPs trying to use parliamentary votes to stop a no-deal Brexit have not had much luck recently. Last month the government comfortably defeated a Labour attempt to allow backbenchers to take control of the Commons timetable which, if passed, might have allowed a bill opposing no-deal to be passed. Last week the Speaker refused to call a Dominic Grieve amendment that would definitely prevented the next prime minister proroguing parliament in the autumn to facilitate a no-deal Brexit. Grieve also lost votes on two other related amendments. But he did win a vote on a move saying the government would have to publish fortnightly reports in the autumn on progress towards restoring the power-sharing executive in Northern Ireland. He acknowledged that this on its own would not necessarily stop an autumn prorogation, but he said he hoped peers would beef it up in the Lords. But even this relatively anaemic amendment only passed by one vote, and that was just because a government whip, Jo Churchill, forgot to cast her vote.
Last night the House of Lords did beef up the original Grieve proposal, by passing an amendment saying there would have to be debates on those fortnightly reports mandated by Grieve. Whether this would stop a new PM proroguing parliament is a matter of debate, but at the very least it would provide stronger legal grounds for a court challenge against a decision to prorogue.Last night the House of Lords did beef up the original Grieve proposal, by passing an amendment saying there would have to be debates on those fortnightly reports mandated by Grieve. Whether this would stop a new PM proroguing parliament is a matter of debate, but at the very least it would provide stronger legal grounds for a court challenge against a decision to prorogue.
Today the government will try to reverse that decision in the Commons. At one level it is just a dispute about a narrow procedural amendment, but of course this has become a contest about whether or not parliament should be willing to contemplate a no-deal Brexit.Today the government will try to reverse that decision in the Commons. At one level it is just a dispute about a narrow procedural amendment, but of course this has become a contest about whether or not parliament should be willing to contemplate a no-deal Brexit.
Based on how MPs voted last week, the government should have a decent chance of winning. But last night Newsnight’s Nicholas Watt reported that some pro-European cabinet ministers were considering resigning so that they could vote against the government.Based on how MPs voted last week, the government should have a decent chance of winning. But last night Newsnight’s Nicholas Watt reported that some pro-European cabinet ministers were considering resigning so that they could vote against the government.
Breaking: I have learnt that some cabinet ministers are giving serious consideration to resigning tomorrow to vote in favour of preventing the next prime minister from suspending parliament. No final decisions made yet on resignations. More at 22:30 on Newsnight@BBCNewsnightBreaking: I have learnt that some cabinet ministers are giving serious consideration to resigning tomorrow to vote in favour of preventing the next prime minister from suspending parliament. No final decisions made yet on resignations. More at 22:30 on Newsnight@BBCNewsnight
“It would be to support a possible vote in parliament that would effectively block the next prime minister from suspending parliament” – our political editor Nick Watt on rumours that major ministers may decide to resign tomorrow@nicholaswatt | #newsnight pic.twitter.com/9vnH9MV5ld“It would be to support a possible vote in parliament that would effectively block the next prime minister from suspending parliament” – our political editor Nick Watt on rumours that major ministers may decide to resign tomorrow@nicholaswatt | #newsnight pic.twitter.com/9vnH9MV5ld
And this morning David Gauke, the justice secretary, refused to rule out rebelling over this issue. He did not say he definitely would resign (and on many occasions pro-Europeans ministers have threatened to quit over Brexit only to back down at the last minute). But instead of just saying that he would support the government, he told the Today programme that he had not yet made up his mind. This is what he said when asked how he would vote:And this morning David Gauke, the justice secretary, refused to rule out rebelling over this issue. He did not say he definitely would resign (and on many occasions pro-Europeans ministers have threatened to quit over Brexit only to back down at the last minute). But instead of just saying that he would support the government, he told the Today programme that he had not yet made up his mind. This is what he said when asked how he would vote:
I will have to see what the precise amendments are and we’re hearing what the whipping will be and the arguments for that so I’m not in a position to necessarily say.I will have to see what the precise amendments are and we’re hearing what the whipping will be and the arguments for that so I’m not in a position to necessarily say.
But what I would say is the idea that parliament should be suspended in October - a period where it always sits, parliament has always in recent years sat at that time of year - at a crucial point in this country’s history, if you like, that parliament should not be able to sit, should not be able to express its opinion and its will, I think would be outrageous.But what I would say is the idea that parliament should be suspended in October - a period where it always sits, parliament has always in recent years sat at that time of year - at a crucial point in this country’s history, if you like, that parliament should not be able to sit, should not be able to express its opinion and its will, I think would be outrageous.
I very much doubt that any prime minister would in fact suspend parliament in these circumstances but I can understand the concerns that a lot of my colleagues have.I very much doubt that any prime minister would in fact suspend parliament in these circumstances but I can understand the concerns that a lot of my colleagues have.
Gauke, of course, expects to be sacked by the new prime minister (almost certainly Boris Johnson) next week. So he does not really have much to lose.Gauke, of course, expects to be sacked by the new prime minister (almost certainly Boris Johnson) next week. So he does not really have much to lose.
I will be covering the debate in full.I will be covering the debate in full.
Here is the agenda for the day.Here is the agenda for the day.
9.30am: David Gauke, the justice secretary, gives a speech on sentencing.9.30am: David Gauke, the justice secretary, gives a speech on sentencing.
9.30am: Crime figures for England and Wales are published.9.30am: Crime figures for England and Wales are published.
9.30am: The Office for Budget Responsibility publishes is Fiscal Risks Report.9.30am: The Office for Budget Responsibility publishes is Fiscal Risks Report.
10am: The Alternative Arrangements Commission, an independent body set up to look for alternatives to the Northern Ireland backstop, publishes its final report.10am: The Alternative Arrangements Commission, an independent body set up to look for alternatives to the Northern Ireland backstop, publishes its final report.
Around 12pm: MPs debate the Northern Ireland (executive formation) bill. As Jessica Elgot reports, the government will seek to overturn a vote in the Lords adding an amendment to the bill intended to make it harder for the next PM to prorogue parliament in the autumn to facilitate a no-deal Brexit.Around 12pm: MPs debate the Northern Ireland (executive formation) bill. As Jessica Elgot reports, the government will seek to overturn a vote in the Lords adding an amendment to the bill intended to make it harder for the next PM to prorogue parliament in the autumn to facilitate a no-deal Brexit.
As usual, I will be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to publish a summary when I wrap up.As usual, I will be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to publish a summary when I wrap up.
You can read all the latest Guardian politics articles here. Here is the Politico Europe roundup of this morning’s political news. And here is the PoliticsHome list of today’s top 10 must-reads.You can read all the latest Guardian politics articles here. Here is the Politico Europe roundup of this morning’s political news. And here is the PoliticsHome list of today’s top 10 must-reads.
If you want to follow me or contact me on Twitter, I’m on @AndrewSparrow.If you want to follow me or contact me on Twitter, I’m on @AndrewSparrow.
I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.
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