Here are the main points from Philip Hammond’s evidence to the Lords economic affairs committee.

• Hammond admitted he was delaying scheduling the budget this autumn because there may have to be an emergency EU summit in November to finalise the Brexit deal. Asked about the budget timing, he said:

The situation this autumn is complicated by the fact that there are some very significant political events, including potentially one the timing of which is, as yet, indeterminate - the continued speculation that there may be a special European council in November. Clearly that makes it difficult to fix the date of another event in our own political calendar.

Last year, giving his annual evidence to this committee in September, Hammond used his appearance to announce the date of the budget in November. But he said he could not announce the date this year because of the Brexit complications.

• He dismissed the claim in the Economists for Free Trade report that the economy would benefit from a no deal Brexit that left the UK trading on WTO terms as “not sustainable”. The report was launched by Prof Patrick Minford this morning. (See 2.09pm.) Asked for his reaction, Hammond replied:

What [Minford] has done is assume a 4% benefit to UK GDP by unilaterally liberalising our trade system, ie abolishing our tariffs unilaterally, notwithstanding first of all that would leave us with no leverage to negotiate free trade deals with any third countries, which I think is the objective of many of his supporters. And notwithstanding studies done by others - the LSE, for example, found that the boost would be 0.3 percentage points, Open Europe found that it would be 0.75 percentage points.

His model makes no allowance for differences in quality [and] safety of imported goods, nor does it make any allowance for distance-related transport costs. And it assumes that all standards imposed on imported goods will be abolished.

He assumes that there are no additional non-tariff barriers to trade between the UK and the EU in a no deal scenario, which is frankly not plausible.

And then for financial service, he assumes that an equivalence arrangement delivering a similar affect to passporting will exist between the UK and the EU in a no deal scenari, notwithstanding the fact that we have heard very loud and clear noises to the contrary from some of our near European neighbours who have other aspirations about our financial services industry.

So I’m afraid I find I’m sure his model is very effective. But the assumptions that he makes are wildly out of line with assumptions that are used by other economic models and frankly I believe are not sustainable.

• Hammond said that, even if the UK left the EU in March next year without a deal, it would still have to pay some sort of “divorce bill”. Brexiters claim that, under a no deal Brexit, the UK would not be liable to pay any of the £39bn it has agreed to pay. Hammond said he did not accept that. He explained:

There are undoubtedly legal obligations that we have to the EU on exit. The quantum of those obligations may be open to discussion, even dispute, and would ultimately in the normal course of even be resolved through some arbitration which may take quite a long time ...

In the context of no negotiated exit, that agreement [to pay £39bn], like all the other agreements that were settled between December and March subject to the caveat nothing is agreed until everything is agreed, will fall. What will not fall is our legal obligation under international law to make payments of sums which were due to the European Union. But to quantify those sums could require a complex and time-consuming process of arbitration ...

If we were to say we are going to sit on our hands and pay nothing we would probably expect a very hard-nosed response from the other side.

• He said he expected the political declaration on the future trade relationship due to be agreed alongside the Brexit withdrawal agreement in the autumn to read like a “heads of terms” in a commercial contract. He explained:

It [the political declaration] will need to be specific enough to satisfy parliament, both parliaments, the UK parliament and the European parliament. And it will need to be be specific enough that the negotiating teams who then work up the detailed text are able to use it to guide their work. I would see this, the commercial world equivalent, a heads of terms, that is agreed and is initialled, and is clearly intended to bind the parties, but is not the detailed text ...

There is merit in having quite a bit of detail. But clearly we don’t have enough time to negotiate a full draft legal text in what will be quite a complex future partnership agreement.

Asked if this document would contain enough detail to explain what the “common rulebook”, as set out in the Chequers proposal, would actually mean in practice, Hammond replied:

On something as central to the proposition as that, we will need to spell out what it means.

• He said that the government’s green paper on social care being published later this year would contain “options” for reform - implying the government would not commit itself at that point to one particular system. (See 4.57pm.)

That’s all from me for today.

Thanks for the comments.

Lord Kerr, the former diplomat credited with drafting article 50, goes next. He invites Hammond to comment on the EFT report saying the UK would benefit from leaving the EU and trading on WTO terms.

Hammond says Prof Patrick Minford assumes there would be a 4% benefit to UK GDP from the UK getting rid of tariffs. But he does not take into account the fact that getting rid of tariffs would give the UK no leverage in trade talks.

He says the LSE have estimated the benefit from this effect at just 0.3%, and Open Europe have put the figure at 0.75%.

He says the Minford model makes no allowance for differences in quality and safety in imported goods.

He says Minford assumes that would be no new non-tariff barriers to UK-EU trade in a WTO scenario.

And he says Minford also assumes that an arrangement similar to passporting would apply in relation to financial service in a WTO scenario, even though EU countries would not accept this.

Hammond goes on:

The assumptions that [Minford] makes are wildly out of line with the assumptions that are used by other economic models, and frankly I believe are not sustainable.

Hammond is now talking about the timing of the budget.

He says the timing of the budget this autumn has been complicated by the Brexit uncertainty, and the possibility of an emergency EU summit on a date not arranged.

• Hammond admits EU may schedule emergency summit for Brexit deal to be finalised.

Philip Hammond, the chancellor, is about to give evidence to the Lords economic affairs committee. He normally appears before it once a year.

According to the committee, the peers particularly want to ask about: the Treasury’s Brexit forecasts, the future of the governor of the Bank of England, the government’s approach to student loan financing, and the economic case for HS2.

But they might also cover: the apprenticeship levy, and the decline in apprenticeship starts; the use of the Retail Prices Index as a measure of inflation; the dominance of the Big Four and challenges in the audit market; fiscal sustainability and demographic challenges; and social care funding.

There is a live feed here.

These are from my colleague Pippa Crerar.

Javid is now taking questions.

Asked about reports that Downing Street blocked a pay rise for the police, Javid says it would be wrong to say Theresa May blocked this. These decisions are taken collectively, he says.

And Philip Hammond has just told MPs that Mark Carney will stay on as governor of the Bank of England - but only for another seven months.

Until today Carney had been due to leave in June 2019.

The panel are now taking questions.

5 Live’s Andy Bell goes first. He says he would like to hear from Boris Johnson. What will happen if Theresa May persists with Chequers?

Johnson says he is passing the question back to the panel.

Q: So what will happen if Chequers goes through?

Patrick Minford says, if Chequers goes through, “economically - it’s the status quo”. But in political terms, it would amount to vassalage.

(My laptop battery is running now, and being the House of Commons, plugs are in short supply. If the blog goes dead, it will be because my laptop is out of juice.)

I’m in committee room nine in the Commons now for the launch of a report by Economists for Free Trade about how the UK could supposedly prosper if it leaves the EU without a deal and has to trade on World Trade Organisation terms. The European Research Group, the Tory faction pushing for a harder Brexit, has not yet published its alternative to Theresa May’s Chequers plan (which the ERG opposes), but this will probably be the next best thing.

It is a medium-sized committee room, and it is now chock-full, with journalists and Brexiter MPs. Sir Bill Cash is about four feet behind me, on my left.

Economists for Free Trade think the UK would do very well trading on WTO terms. Theirs is a view that is contested by mainstream economists, to put it politely.

Here is an extract from the press release sent out in advance.

Britain would be better off trading with the European Union under World Trade Organisation rules, according to a major new academic study of the likely impact of the failure of the UK and the EU to conclude a free trade agreement by the Brexit date of March 29^th next year.

A world trade deal under WTO rules would boost the UK’s trade with the rest of the world including Europe, lower domestic prices and boost inward investment, says the report produced by Economists for Free Trade (EFT).

It would also provide a significant uplift in UK economic growth over the next 15 years, raising Treasury revenues by £80 billion, enabling a combination of higher public spending and lower taxes.

In addition, if the EU insisted on slapping WTO tariffs on British exports and Britain responded in kind, because of the large EU trade surplus with the UK, the overall effect would amount to a staggering £13 billion a year boost to UK revenues.

Labour MPs have nothing to fear from activists criticising their performance, the shadow chancellor John McDonnell has said, arguing that a recent spate of no-confidence motions is little different to what has always happened in the party.

Speaking before his address to the TUC, McDonnell said he was against attempts to impose mandatory reselection for LabourMPs, but that people should not overreact. He told the Today programme:

I keep saying to people: don’t mistake democracy for division, because that’s what democracy is all about, people get up and say, this is what I feel.

He dismissed the idea that Labour had been infiltrated by hardliners who were seeking to push out MPs such as Frank Field – who has now quit the party whip – and Joan Ryan, both of whom have had no-confidence motions passed against them by local parties. Rosie Duffield, the new MP for Canterbury, was also threatened with such a move. He said:

We now have 500,000 members. It’s a huge, mass party now, and of course those members want to get involved in discussions about policy, and also they will reflect at times their view about the performance of their local MP.

And we’ve had a small number of incidents that we’ve seen – two or three – where parties have come together and they’ve expressed concern about the performance of their MP. That’s happened right the way through the history of our party. It’s nothing untoward.

Matthew Taylor, the former Blair adviser who led the Taylor review on modern working practices for the government (see 9.28am), was on the Today programme this morning talking about the Labour proposals. His review did not propose all “gig economy” workers getting the same rights as other workers from day one (which is what John McDonnell advocates). Taylor explained why:

If people ... got the full suite of employment rights on day one, in a sense they would not really be casual workers. And one would imagine that, if you were an employer and you were providing these rights on day one - rights, for example, to claim unfair dismissal, to maternity leave, things like this - probably then the employer would then, as a quid pro quo, expect you to give notice of leaving your employment ...

I think what you would see [under the Labour plan] is some of the casual work turning into long-term, full employment, which I guess is the aim of the Labour policy. I think you would almost certainly see some of those jobs going because, if employers were required to provide this full set of rights, they probably wouldn’t feel it was possible for them to create those jobs because of the kind of requirements that would be upon them.

And it is worth remembering that surveys consistently find that about two thirds of people who work in these ways, who work in short-term or temporary work, say that’s the way they want to work. They wouldn’t, for example, like to have have to give notice of the fact that they want to terminate that employment.

Taylor also told the programme that almost every other country in the world does have a category of “gig economy” worker in labour law who does not have the same rights as a full-time employee. And he also said he thought the Labour plan would be “very hard to implement”.

In a briefing note released this morning the Labour party gave more details of its plans to extend all rights to all workers from day one. It said:

Currently, all types of workers have the right to the following on day one of their employment: the national minimum wage; working time rights (including breaks, paid holidays and a limit on the working week); health and safety protection; the right to join a union; and protection from unlawful discrimination.

However, some rights have a qualifying period, which varies between different types of workers. For example, agency workers gain the right to equal treatment on pay, holidays and working time, and to improved pregnancy rights, only after 12 weeks in post.

Additional rights are only available to those workers classified as “employees” but not to workers classified as “limb b.” These include: sick pay; unfair dismissal protection; minimum notice periods to terminate; maternity/paternity/adoption leave.

Labour believes that differential treatment encourages employers to use ever more ingenious contracts in order to get out of obligations to their workforce. Labour will reverse this incentive by redefining the legal work relationship and getting rid of qualifying periods. This will give all workers equal rights on day one of their engagement. Stronger rights e.g. to a longer holiday allowance, may still be accumulated through length of service.

In the note Labour also said it would beef up enforcement of workers’ rights. It said:

Labour will strengthen enforcement of labour market rights by:

Empowering enforcement agencies to impose punitive fines on employers not meeting their responsibilities, helping to deter others from doing the same

Involving trade unions in enforcement e.g. by giving them a seat on the governing bodies of key enforcement agencies

Expanding and guaranteeing funding for the enforcement agencies to ensure they have the skills, personnel and resources to enforce workers’ rights

Abolishing ‘payroll companies’ (agencies which purport to employ workers who work for an end-user, so allowing the end-user to evade the responsibilities of employing the worker directly)

Abolishing zero hours contracts by requiring employers to guarantee minimum hours (not less than the average worked over the previous 12 weeks)

Giving genuine employment agencies and end-users joint responsibility for ensuring that the rights of agency workers are enforced

Rolling out sectoral collective bargaining across the economy

Strengthening trade union rights, because empowering people to claim their own rights in the workplace is the most effective means of enforcement

Establishing a Ministry of Labour, so that workers have a voice at the cabinet table.

When Theresa May became prime minister she asked Matthew Taylor, the former head of policy for Tony Blair who now runs the RSA thinktank, to head a review into “the gig economy”. His report, Good work: the Taylor review of modern working practices (pdf), was published last summer. Taylor summarises his proposals here. May spoke at the report’s launch, but she did not commit to backing all its recommendations and the government is still considering which of them it will implement.

In his speech to the TUC today John McDonnell will argue that the Taylor recommendations did not go far enough. He will say:

The answers to the gig economy won’t be found in the pages of the government’s Taylor report or in the months of consultation that have followed.

Because the report’s starting point is that flexibility must come at the price of insecurity. This is wrong.

Just because you don’t work regular hours doesn’t mean you can afford not to work when you are sick.

Just because you work several jobs doesn’t mean you can afford to lose one of them without warning.

Just because you value the freedom of independence or the convenience of flexibility doesn’t mean you have to forgo basic rights.

He will also argue that Taylor did not place enough importance on the role of trade unions.

Taken with our commitments to repeal anti-trade union legislation and strengthen trade union rights, to give workers a seat at the cabinet table by establishing a Ministry of Labour and to roll out sectoral collective bargaining across the economy what we are proposing to amounts to the biggest extension of individual and collective rights our country has ever seen, a plan that will irreversibly transform our workplaces and working lives.

And it has trade unions right at its heart.

Because even if the government adopt every positive recommendation in Taylor, it will not be enough. Taylor ignored a crucial lesson of history – that the most effective way to improve the lives of working people is through trade unions and collective action.

We won’t forget, because it’s the principle our movement was founded on.

John McDonnell, the shadow chancellor, got a new press officer recently and the guy is obviously doing a pretty good job. McDonnell has received a lot of broadly positive coverage in the press recently (including this lengthy interview/profile in the New Statesman by Jason Cowley, which is well worth reading), and when I came into the office this morning at one point McDonnell appeared on BBC News and Sky at exactly the same time, while simultaneously his voice was coming out of the radio because he was being interviewed on Today. Wall-to-wall John McDonnell - perhaps, this is what life will be like under socialism. Alternatively, he’s just learning how it feels to be Jacob Rees-Mogg.

McDonnell was being interviewed about the speech he will be giving at the TUC conference later, and his main announcement is that Labour would ensure that casual workers in the “gig economy” would get the same rights as proper employees from day one. It is not entirely clear how much this goes beyond what was promised in Labour’s 2017 manifesto (pdf), but there is nothing wrong with restating and updating policy, and McDonnell is saying that, combined with other promises, Labour would be offering “the biggest extension” of workers’ rights ever seen in the UK. He will tell the TUC:

Our manifesto, For the Many not the Few, published a full nine months before [the government’s Taylor report on modern working practices], contains a simple set of policies that would put a complete stop to exploitation in the gig economy.

First, shift the burden of proof, so that the law treats you as a worker unless the employer can prove otherwise.

Second, extend full rights to all workers including so-called “limb b” workers entitling everyone in insecure work to sick pay, maternity rights, and the right against unfair dismissal from day one of their employment.

Third, properly resource HMRC and fine employers who break the rules so that people get the rights they are entitled to.

It’s not rocket science.

When employers use legal loopholes and weak enforcement to duck their responsibilities close those legal loopholes and strengthen enforcement.

When technology creates new employment relations extend regulation to keep pace.

And when the balance of power shifts so dramatically away from workers as it has done today it’s time for us to tip it back.

Taken with our commitments to repeal anti-trade union legislation and strengthen trade union rights, to give workers a seat at the cabinet table by establishing a Ministry of Labour and to roll out sectoral collective bargaining across the economy what we are proposing to amounts to the biggest extension of individual and collective rights our country has ever seen, a plan that will irreversibly transform our workplaces and working lives.

I will post more from McDonnell’s interviews soon.

Here is the agenda for the day.

9.30am: Theresa May chairs cabinet.

9.30am: Unemployment figures are published.

9.30am: Lord Hall, director general of the BBC, gives evidence to the Commons culture committee on the gender pay gap at a hearing in Manchester.

10am: Chloe Smith, the constitution minister, gives evidence to public administration and constitutional affairs committee about voter identification.

11am: The Conservative Brexiter Jacob Rees-Mogg speaks at the launch of an Economists for Free Trade report on what would happen if the UK leaves the EU without a deal and trades with the EU on World Trade Organisation (WTO) terms.

11.30am: Philip Hammond, the chancellor, takes questions in the Commons.

3.35pm: Hammond gives evidence to the Lords economic affairs committee.

Around 4pm: John McDonnell, the shadow chancellor, speaks to the TUC conference in Manchester.

As usual, I will also 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 post a summary at lunchtime and another when I finish, probably around 5ish after the Hammond and McDonnell events finish.

You can read all today’s Guardian politics stories here.

Here is the Politico Europe round-up 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.

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