Conservative conference: Hammond pledges digital services tax on web giants

LIVEUpdated Philip Hammond speaks during day two of the Conservative conference.Photograph: Jeff J Mitchell/Getty Images Key events Show Live feed Show


Conservative conference: Hammond pledges digital services tax on web giants Michael Gove makes his speech. Photograph: Aaron Chown/PA

Michael Gove is the next speaker in the hall, and he is clearly in the mood to take on Boris Johnson's role as the delegates' favourite cabinet turn. The start of his speech has very little to do with the environment, his ministerial responsibility, and is instead firmly based on bashing Labour.

Gove spends some time condemning what he calls "unacceptable antisemitism" in the Labour party. It is notable that, unlike James Brokenshire, who spoke before, Gove does not mention tackling anti-Muslim hatred, something the Conservatives face accusations of harbouring[8]. More widely on Labour Gove said, applause:

This week, in this party, for the sake of our children, let us commit to unite so that the Moscow-loving, Hamas-hugging, high-taxing, moderate-bashing, job-destroying, national anthem-avoiding, NATO-hating, class war-provoking, one-man museum of economic folly that is Jeremy Corbyn, is never let anywhere near Downing Street.

Updatedat 2.57pm BST


Conservative conference: Hammond pledges digital services tax on web giants Conservative conference: Hammond pledges digital services tax on web giants The Leave Means Leave bus in Birmingham.

Photograph: Oli Scarff/AFP/Getty Images

The highlight of a chaotic and poorly attended Leave Means Leave lunchtime event in the city centre was a standoff between hard Brexit[10] campaigner Richard Tice and a noisy group of pro-remain demonstrators wearing blue t shirts patterned with the EU flag. Polly Ernest, from the Stand of Defiance European Movement (SODEM) claimed Tice's hands were shaking when challenged, and said he accused them of trying to support "a losers vote" in the form of a second referendum. Only a handful of journalists attended despite the offer of free alcohol from pub chain Wetherspoon's "non-EU drinks menu" and the promise of a short bus tour around the city of Birmingham, although that was not helped by the fact that PR agency involved only came on board at the last minute.

Nor was there any sign of Tim Martin, the Wetherspoon boss, who had billed as attending but in fact was not able to turn up until 4pm. Leave Means Leave plans to hold a string of rallies around the country in the coming weeks, including on on Saturday in Torquay where Nigel Farage and Jacob Rees-Mogg will share a stage and organisers hope almost 2,000 people will attend. Richard Tice, the organisation's chairman, said he was on a "save Brexit tour" in opposition to May's Chequers proposals "to focus on the message that no deal is no problem".


Conservative conference: Hammond pledges digital services tax on web giants Conservative conference: Hammond pledges digital services tax on web giants Jacob Rees-Mogg at the fringe event.

Photograph: Ian Forsyth/Getty Images

Jacob Rees-Mogg, the darling of the Tory grassroots, has said Brexiters must "get away" from the "Ukip-isation" of Brexit[12] in order to win back the votes of young people. "I think there's lots of failures of propaganda really that we have allowed Brexit to be about immigration or putting up barriers or not liking going on holiday in Europe. It's none of that.

It's about who runs your government, do you or somebody else," he said. "I think that's a really popular argument with young people and we need to get out there and make it and try and get away from the Ukip-isation of Brexit. I think the Ukip view, you may think it's odd for me to say, of some sepia tinted 1950s view of Brexit has never been my vision of Brexit.

Its about being a global nation rather than a narrow European one." Rees-Mogg, who has been viewed as a potential successor to May, said that it was time for the Tories to focus more on their domestic policy agenda. "Once we have delivered Brexit we have to get on with health and housing, we have to be saying to people 'we are going to improve your life'," he said.

In a swipe at the party leadership, he added: "What resonates with people is when you say 'we will make your lives a little bit better' and frankly we are not saying that at the moment."

[13] The afternoon speeches have begun, and first up is housing and communities secretary James Brokenshire. He begins with an emotional section about the lung cancer which forced him to step down from the cabinet at the start of the year:

Friends, it's been quite a year for me and today is a particular personal milestone.

When I addressed our conference 12 months ago, I didn't know it, but I had lung cancer... When you receive a cancer diagnosis, when you are forced to confront your own mortality head on, it makes you appreciate what's important... what makes life worth living. I know I couldn't have got through this period without the incredible love and support of my wife Cathy and our three children, Sophie, Jemma and Ben.

They've kept me positive, they've helped get me through surgery, through my recovery and back to strength. But I also know that if it wasn't for our amazing NHS I wouldn't be here today. They saved my life and in some way will have touched the lives of every person in this hall.

To all those who work in our NHS - thank you.


Lunchtime summary

And let me be clear today: the best way to tax international companies is through international agreements, but the time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement the UK will go it alone with a digital services tax of its own.

Our prime minister has been constructive and respectful. In return we heard jibes from senior leaders.

And we saw a starkly one-sided approach to negotiation, where the EU's theological approach allows no room for serious compromise. And yet we are expected to cast aside the territorial integrity of our own country. If the EU want a deal, they need to get serious.

And they need to do it now.

Updatedat 1.56pm BST

[18] Here's some more thoughts on Hammond's speech via Twitter:

George Eaton (@georgeeaton)

Philip Hammond's speech showed why the Tories are struggling to take on Corbyn: he identified problems with British capitalism but offered no answers.[19]

October 1, 2018[20] Pippa Crerar (@PippaCrerar)

I think this is really significant. Hammond says that while he doesn't think Labour's answers are the right ones, their questions needs a response.

Just a bit late to start worrying about left behind Britain though, isn't it?[21]

October 1, 2018[22] Isabel Hardman (@IsabelHardman)

Philip Hammond says this is one of the things Conservatives can tell their children. I imagine school playgrounds all over the country are erupting with excitement.[23]

October 1, 2018[24]

[25] Instant verdict on Hammond speech: It was certainly what pundits like to call "wide ranging" - usually a shorthand for a minister wandering off piste in an attempt to burnish their leadership credentials.

At this conference virtually every minister is on some manoeuvres of some sort, so perhaps not so much can be read into it. In fact, after the excitement of the chancellor's overnight attack on Boris Johnson[26], the speech was largely a much-as-expected defence of Chequers, of his economic record, and an attack on Labour, which the one notable announcement of tackling the tax schemes of web giants. In terms of outside comment, John McDonnell, the shadow chancellor, attacked the speech as showing a party that is "increasingly irrelevant and cut off from the real day to day life most people experience".

Adam Marshall, head of the British Chambers of Commerce, said firms would feel "heartened by the chancellor's forthright support for business as the foundation of both a strong economy and a strong society".

[27] Hammond ends with a robust defence of the government's (and thus his) economic record, and attacking that of Labour. He concludes:

I have set out my argument for the renewal of our economic creed to secure for Britain the benefit of the market economy for the years to come, to ensure it can respond to the concerns and meet the aspirations of the next generation.

Because Corbyn's plan offers no future for Britain, and it is our duty to provide a better answer - to make the case for the long term over the short term. For the substantial over the superficial. For evolution over revolution.

And that is it from the chancellor.


Hammond calls for 'digital services tax' on web giants

Conservative conference: Hammond pledges digital services tax on web giants Philip Hammond speaks.

Photograph: Christopher Furlong/Getty Images

Hammond has a long section of his speech devoted to the difficulties caused by the dominance of a handful of tech giants, and says that if there cannot be international agreement the UK could push ahead with its own "digital services tax". This would make it harder for companies such as Amazon to avoid taxation, something ministers have mooted before. He said:

Just as, in late 19th century America, concerns about the near-monopoly of Standard Oil and the railroad cartels led to the introduction of the world's first anti-monopolies legislation, so today, the expansion of the global tech giants and digital platforms, while of course bringing huge benefits to consumers, raises new questions about whether too much power is being concentrated in too few global technology businesses.

That is why I have asked President Obama's former chief economist, Jason Furman, to lead an expert panel to review the UK's competition regime, to ensure it is fit for the digital era. And it isn't just competition policy that needs updating. We can tell them how we have led the debate on reforming the international tax system for the digital economy, insisting that the global internet giants must contribute fairly to funding our public services.

And let me be clear today: the best way to tax international companies is through international agreements, but the time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement the UK will go it alone with a digital services tax of its own.

Updatedat 1.59pm BST

[29] One of the more curious parts of Hammond's speech came when he talked about EU opposition to elements of the Chequers plan.

"Mr Tusk says it won't work," he said. "But that's what people said about the lightbulb in 1878." If you're being pedantic, given Joseph Swan actually demonstrated the electric lamp in 1878, people could see for themselves that it would work.

[30] Hammond is now on the obligatory "attack Labour" part of the speech, saying Jeremy Corbyn and his party put "political ideology above real-world solutions for real people".

He says:

All they do is look it up in the socialist manual. Railways? Nationalise them.

Wealth? Confiscate it. Run out of money?

Just borrow more. Answers from a discredited ideology that will never solve real-world problems.

Updatedat 12.48pm BST

[31] Hammond is talking at length about technological change, saying it will "define the future of our country and our party" far more than Brexit[32].

This will involve reassuring people, he says:

I understand that my enthusiasm for driverless cars may not be so readily shared by someone who earns their living as a cab driver, and that home 3D printing may look more of a threat than an opportunity to someone who works for a parcel delivery firm. So we have to take our people with us, be open with them about the scale and nature of the change that is coming; about the disruption that change on this scale will inevitably bring; set out clearly the benefits that individuals and families will see from the digital age and how we will help them to prepare for it and deal with the consequences of it; reassure the very many who will worry about what new technologies mean for their job security, worry that the gains will be made by the few and that they will be left behind.

Conservative conference: Hammond pledges digital services tax on web giants Philip Hammond. Photograph: Stefan Rousseau/PA

Updatedat 12.48pm BST


After a slightly low-key introduction from Liz Truss, the chief secretary to the Treasury - we get praise for Philip Hammond and the obligatory joke about cheese - we now have the chancellor's speech.
[34] Hammond begins with some fairly general words about Brexit[35], stressing that even after departure the UK and EU will keep many strong cultural and economic links. He mentions the Chequers plan and has to wait for some applause from the crowd, which will presumably cheer Theresa May.

Updatedat 12.47pm BST


Back in the conference hall, in something of a change from the usual speeches, the business secretary Greg Clark is appearing via a video link from a Coventry factory, where he is wandering about and chatting to staff. There is some talk of humans and robots working together collaboratively, which will presumably delight my colleague, John Crace. Much of the rest of the audio is a bit muffled, so I'm not always sure what else he's chatting about.

Updatedat 12.46pm BST


Conservative conference: Hammond pledges digital services tax on web giants Conservative conference: Hammond pledges digital services tax on web giants Priti Patel.

Photograph: Ben Stansall/AFP/Getty Images

Priti Patel, the former international development secretary, has attacked the cabinet for failing to adequately apply the ideals of capitalism to government as Britain prepares to leave the EU. The MP for Witham said ministers had failed to "step up" and apply the values of Margaret Thatcher to policies or defend the free market from attacks by Jeremy Corbyn. At a Taxpayers' Alliance fringe meeting at the conference, she said:

I am really bored of Conservative politicians [speaking] about their love of the free markets, particularly those who are in government who have done nothing to change government policy.

The last time when the Conservative party was truly on the side of business was when we had exceptional leadership under Margaret Thatcher. My party really has to get itself together now, it's got to stop being so regressive in government, our politicians and ministers as well. If you have the privilege of being in government, you step up and apply Conservative values.

Patel also claimed suppliers operated as cartels within her former department:

In my last government department, I discovered that 90% of the budget was spent with 10 key suppliers which, in my line of work that's a cartel.

That has to be smashed up and that's exactly what I did in Dfid. I fell out with everyone in government about it particularly the Cabinet Office ... After Brexit[39], we need to encourage more diversity and greater market engagement.

Government has got to really scrub itself up, cut out the preferred suppliers. The whole culture is cronyism and it's interfering with the functioning of government.

Updatedat 12.46pm BST

[40] As the speeches go on in the hall, Theresa May and Philip Hammond[41] have been on a visit to meet some apprentices at a business in Birmingham.

Conservative conference: Hammond pledges digital services tax on web giants Theresa May and Philip Hammond meet some apprentices.

Photograph: WPA Pool/Getty Images

Updatedat 12.24pm BST

[42] As Chris Grayling addresses the conference - he has again apologised for the timetabling chaos on the railways[43], announced an easier compensation scheme for delayed passengers, and some new spending on A roads - Labour has sent out a swift response to Raab's speech. The shadow Brexit minister Paul Blomfield said:

Dominic Raab spoke for nearly 30 minutes, but he could have saved everyone's time and said just three words: nothing has changed.

The Brexit secretary offered no credible plan to break the deadlock in negotiations, no credible plan to avoid a hard border in Northern Ireland and no credible plan to protect jobs and the economy. It was a speech that offered no solutions on Brexit[44].

Updatedat 11.28am BST


Conservative conference: Hammond pledges digital services tax on web giants Dominic Raab at the Conservative conference. Photograph: Jeff J Mitchell/Getty Images

Raab also has some tough words for those seeking a second Brexit[46] referendum:

I'll tell you what's not democracy.

The efforts of a small, but influential group of senior politicians and establishment figures to overturn the result of the referendum. They want to stop us leaving. You can just picture them, sitting in an expensive advertising agency, discussing how to claim that black is white. 'Our research shows that the public doesn't like the idea of a second referendum.

That's all right - we'll rebrand it a people's vote. They might buy that. 'But there's a real sense that leave won fair and square.

Most people just want to move on. Don't worry - we'll bankroll a campaign to scare the wits out of them. Hang on - the Project Fear stuff didn't work too well first time around.

'That's because it wasn't scary enough.

This time we'll claim that no deal means patients won't get their medicines, mobile phone roaming charges will go through the roof and space debris will fall from the sky.'

Honestly, it would be pathetic if it wasn't so dangerous.

Raab also includes a long section about his father, who was among the Jewish people who fled the Nazis in Czechoslovakia, and attacks Labour over antisemitism.

Updatedat 10.58am BST

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  1. ^ Raab says EU needs to "get serious" on Brexit (
  2. ^ Hammond calls for digital services tax on web giants (
  3. ^ Hammond reiterates his criticisms of Boris Johnson (
  4. ^ 12.44pm BST12:44Hammond calls for 'digital services tax' on web giants (
  5. ^ 10.37am BST10:37EU needs to 'get serious' on negotiations, Raab says (
  6. ^ 8.44am BST08:44Philip Hammond reiterates his criticisms of Boris Johnson (
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  8. ^ face accusations of harbouring (
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  10. ^ Brexit (
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  15. ^ The chancellor, Philip Hammond, has warned of a UK "digital services tax" on monopolistic web firms if there is no international agreement on their tax policies, as part of his speech to the Tory conference. (
  16. ^ Dominic Raab, the Brexit secretary, has told the conference the EU must "get serious" over departure talks: (
  17. ^ Hammond has reiterated his criticism of Boris Johnson, saying again he does not believe the former foreign secretary will beocme prime minister, saying: "My position - I repeat it today - is I don't believe that will happen." (
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  20. ^ October 1, 2018 (
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