Downing Street plans to lift the pay cap – starting with the lowest paid and the hardest to recruit

‘Theresa May will lift weary state workers’ seven year pay cap this month as the centre piece of a fresh bid to reconnect with angry voters. No10 aides are drawing up a series of major policies away from Brexit to try to win back the PM’s authority to stay on in No10. The Sun can reveal that the “jewel” in the package will be ending the 1% cap on rises for all public sector workers. But because of the huge £4bn a year cost of the move, it will be done gradually over two years. Under one plan favoured by ministers, the lowest paid and professions with the biggest retention problems – such as nursing and senior leaders across the civil service – will see the first rises, from April next year. Pay hikes of at least the rate of inflation, currently 2.6%, will be authorised by ministers. That would see the pay of the average nurse of £31,600 a year go up by at least £820. A police constable on £28,000 will see a rise of £730 minimum.’ – The Sun

>Today: Nadhim Zahawi’s column: Why the basic rate of income tax for younger people should be cut

Brexit 1) Barnier intends to ‘teach’ the British people about the price of leaving the EU

‘Brussels Brexit chief Michel Barnier yesterday threatened to teach Britain a lesson for leaving the EU, as the row over demands for a £90billion divorce payment boiled over. In an incendiary intervention, Mr Barnier said he wanted to use Brexit to ‘teach the British people and others what leaving the EU means’. Tory MPs branded the EU’s chief negotiator ‘patronising and arrogant’ – and said his comments showed Brussels was starting to panic about the loss of Britain’s financial contributions to the EU. The former French cabinet minister denied that he was trying to ‘blackmail’ the UK, but vowed to ‘educate’ British voters about the price they would pay for daring to leave the EU. ‘There are extremely serious consequences of leaving the single market and it hasn’t been explained to the British people,’ he told a conference in Italy. ‘We intend to teach people… what leaving the single market means.’’ – Daily Mail

  • The Eurocrats don’t want a deal – Dominic Lawson, Daily Mail
  • Brussels’ financial demands included funding bear breeding in the Pyrenees – Daily Mail
  • The UK is set to offer £1 billion a year for continued involvement in science programmes – The Times
  • The EU’s high-handed imperial ambitions caused Brexit – Nigel Biggar, The Times
  • We’ll pay a reasonable bill, but we won’t be taken to the cleaners – The Sun Says

>Yesterday: ToryDiary: Our survey. Almost three in four Party members want any Brexit implementation plan to finish before the next election

Brexit 2) Mandelson: It’s time for ‘trench warfare’ against the Government’s plans

‘Ministers, lacking a clear majority, will enter the minefield of the repeal bill with the opposition benches more united against them. This paves the way for serious, gruelling political trench warfare. It also means that only a small rebellion by Conservatives would be needed to defeat the government and force them to change course. We should not overestimate the insurrectionary tendencies of pro-European Tories. They, like all MPs, feel the pull of loyalty to party. But on issues from Euratom to customs union membership, we are seeing that there are those on the government’s own benches willing to speak out and make common cause with those from other parties. The House of Lords, which feels emboldened given the government’s electoral failure in June, will likewise make sure it has its say.’ – Peter Mandelson, The Times

  • Flint cautions Labour MPs against wrecking Brexit legislation – Daily Mail
  • Starmer claims the Opposition is ‘united’ – The Sun
  • Osborne’s one-man propaganda sheet isn’t helping – Trevor Kavanagh, The Sun
  • Davis says the repeal bill is the best way to ensure legal continuity – The Times
  • Brexiteer MPs threaten to rebel over Henry VIII powers – The Sun
  • Trade minister quits – The Times
  • It’s bad enough that we’re going to have to pay for your pension – The Sun Says

Brexit 3) Leavers still want skilled migrants, and Remainers want unskilled migration to fall

‘Leave voters want skilled workers to still be able to come into Britain whenever they want after Brexit, a survey has found. Seven out of 10 who backed Britain’s EU exit at the referendum last year think free movement should continue for Europeans with ability. At the same time, there is strong consensus among both Remain and Leave voters to stop as many unskilled voters from coming to live in the UK when we leave the EU. The ICM poll commissioned by the British Future think tank found a total of 86% of all voters want high-skilled EU migration to stay at the same level as now or increase. But 64% – including 50% of Remain voters – say they would like low-skilled EU immigration numbers reduced. In a new report, British Future calls on ministers to design the post-Brexit immigration system to reflect the consensus.’ – The Sun

  • EFTA court president pushes benefits of Norway model – The Guardian
  • Smaller lenders welcome the chance to cut red tape – FT

>Today: Simon Randall on Local Government: Freedom from EU procurement rules will be a huge Brexit prize

May uses reshuffle threat as both stick and carrot

‘Theresa May is using the threat of a reshuffle to bring Tory troublemakers into line as she seeks to tighten her grip on Downing Street. Conservative Campaign Headquarters had expected the prime minister to overhaul jobs in the government after the party conference next month. However, she is now thought more likely to delay the shake-up, using her ability to reward supporters and punish rebels to reassert her authority after angering some MPs by vowing to lead the party into the next election. The threat will be seen as an attempt to rein in ministers with whom No 10 has clashed, including Sajid Javid, the communities secretary, Andrea Leadsom, the Commons leader, and Liam Fox, the international trade secretary. Jacob Rees-Mogg, a surprise contender for the leadership, is being lined up for a ministerial job to test his suitability for higher office.’ – The Times

>Today: ToryDiary: Our survey. Over half of Party member respondents think May should quit as leader before 2022.

>Yesterday: Richard Ritchie: Was the election result really such a disaster for the Conservatives?

Ministers consider action against Fixed Odds Betting Terminals

‘Ministers are planning a clampdown on ‘crack cocaine’ gambling machines after Chancellor Philip Hammond backed down over the issue. Fixed-odds betting terminals (FOBTs) have long caused concerns among campaigners including the Church of England over the ‘devastating’ effects they have on users. But the issue has caused a split between the Treasury, which fears losing the tax takings from bookmakers’ profits, and the Department for Digital, Culture, Media and Sport (DCMS). Mr Hammond now appears to have backed down after he confirmed that a long-awaited review of the betting industry’s use of the machines will be published this autumn…Last month, reports quoted Whitehall sources saying that the Treasury feared that cutting the stakes would prove ‘financially crippling’ and wanted the review scrapped.’ – Daily Mail

Hammond to meet elected mayors in the hope of kickstarting the Northern Powerhouse

‘Philip Hammond will meet the elected mayors of Manchester, Liverpool and Tees Valley on Monday, as the government seeks to rebut criticism that it has neglected the north of the England. Mr Hammond will place particular emphasis on increasing productivity in the region, saying that Brexit makes it “even more important that we support the Northern Powerhouse to reach its full potential”. The meeting comes after accusations that UK prime minister Theresa May’s former advisers had deliberately undermined devolution to the north out of spite for her fierce critic, the former chancellor George Osborne. The “Northern Powerhouse” project was first championed by Mr Osborne, but has looked increasingly vulnerable since he was sacked by Mrs May last summer. Criticism of the government has been reignited in recent months, after the transport department cancelled plans to electrify some rail routes and put other schemes under review, while backing Crossrail 2, a £30bn project in London.’ – FT

  • Coastal towns’ economic plight revealed – The Sun

Masterton: Scottish Tory MPs will display ‘sharp elbows’ and fight their corner

‘“I think it’s important that the voice of Scottish Conservatism is being heard and we don’t just fade into the background,” he says, hinting towards the groundwork that has already been laid for parliamentary tussles to come. “There will be times when it is necessary for us to pull together, but we’re not going to be shy about recognising the fact that there are 13 of us here and sometimes elbows need to be sharpened.” Following Ms Davidson’s intervention, he has the impression that Scottish Conservatives “have a clearer idea” of what they want to achieve and are quietly aware of the weight carried by 12 votes for a government with a working parliamentary majority of 13. There could, for example, be lines in the autumn budget or “big policy areas where we have to say ‘no sorry this doesn’t work for Scotland, you need to listen to us’ and it’s so important for people back in Scotland to see that because for so long the nationalists have claimed they alone spoke for Scotland”.’ – The Times

  • SNP plans even higher public spending, despite massive deficit – The Sun
  • Leading headteacher warns of impractical guardianship policy – Daily Telegraph

The battle for the Scottish Labour leadership gets personal

‘A Left-wing trade unionist and Jeremy Corbyn supporter has confirmed he is standing for the Scottish Labour leadership amid claims it would be disastrous to pick him because he is a privately-educated Englishman. Richard Leonard, an organiser for the GMB union for 20 years, said he was putting his name forward because Scotland needed “a united Labour Party committed to real and bold change”…Anas Sarwar, his expected moderate opponent for the leadership, said the contest was about “electing a leader who can serve our country as the next First Minister of Scotland.” Their interventions came as it emerged that internal party critics of Mr Leonard, who attended the private Pocklington School in York, are questioning whether Scots would vote for an English First Minister…The controversy follows personal attacks on Mr Sarwar, who comes from a wealthy family and sends his children to private school.’ – Daily Telegraph

  • Corbynites are trying to change Labour’s rules for factional advantage – John Rentoul, The Independent
  • They plan to only require the support of ten per cent of MPs to get on the leadership ballot – The Independent
  • RMT accused of targeting strikes for maximum disruption – Daily Mail
  • Councils threaten fines for putting your bin out too early – Daily Mail

Foges: The reason we have poor leaders is that too many MPs are mediocre

‘Shouldn’t the talent pool in the Commons be rich with prime ministers-in-waiting? What has gone awry on the parliamentary production line? The ascent of May and Corbyn, and the dearth of popular candidates to replace them, suggests something that feels rather rude but important to state: overall, the calibre of MPs is not as we would wish it to be. There are, of course, many exceptional MPs… This is not a blanket denunciation of MPs, but we do have a problem in that increasing numbers of them seem to be rather mediocre. What do I mean by mediocre? Not unintelligent or incapable, only mediocre when set against the standards we should expect…All those who become members of parliament should be genuinely exceptional: fiercely intelligent, insightful, authoritative. This is not an accurate description of many of today’s MPs.’ – Clare Foges, The Times

The US puts ‘total annihilation’ of North Korea on the table in response to latest weapons test

‘Donald Trump kept open the option of a retaliatory strike against North Korea last night after Pyongyang tested what it said was a hydrogen bomb that could be mounted on an intercontinental missile. He also threatened to sever trade ties with China as the White House wrestled with how to respond to Kim Jong-un’s detonation of a powerful new atomic weapon. Asked if he planned to attack North Korea, Mr Trump said: “We’ll see.” James Mattis, the US defence secretary, said that the “total annihilation” of North Korea was an option, albeit one that Mr Trump was keen to avoid. “We have many military options, and the president wanted to be briefed on each one of them,” Mr Mattis said outside the White House after the president had met his national security team. “Any threat to the United States or its territories, including Guam, or our allies, will be met with a massive military response — a response both effective and overwhelming.”’ – The Times

Merkel and Schulz clash over Turkey and refugees

‘German Chancellor Angela Merkel has said she wants to end Turkey’s application for European Union membership. While debating with her Social Democratic Party rival in elections being held later this month, Merkel said she will ask the EU to call off membership talks with Turkey, amid rising tensions between Berlin and Ankara.’I don’t see them ever joining and I had never believed that it would happen,’ she said during a televised debate, adding that she will speak with her EU counterparts to see if ‘we can end these membership talks’. She added: ‘The fact is clear that Turkey should not become a member of the EU.” – Daily Mail

  • Schulz failed to land a knockout blow – FT

News in Brief

  • Ancient hominid footprints in Crete challenge assumptions about our early history – The Times
  • Forthcoming investigation into suspicious deaths at NHS hospital – Daily Mail
  • Seven-hour standoff in Birmingham prison – Daily Telegraph
  • Think tank urges shorter degrees to end student ‘Ponzi scheme’ – The Sun
  • Bad habits leave men with older hearts – The Times
  • Palmerston wins the battle of the Whitehall mousers – The Sun