The 2017 Grenfell Tower fire in London was the result of ‘decades of failure’ by central government, the public inquiry into the catastrophe has found. The Guardian’s John Harris looks at the findings of the report with the social affairs leader writer Susanna Rustin. And, as Labour continues to warn ‘things will get worse before they get better’, we are joined by the economists James Meadway and Ann Pettifor to discuss whether a painful period of austerity-lite is the only way through the storm
Continue reading...Category Archives: Economic policy
Labour MP pushes for watchdog to assess PFI costs under budgets bill
Stella Creasy says she wants to put school and hospital debts and impact of trade deals ‘on nation’s books’
A senior Labour backbencher is seeking to have liabilities from schools and hospitals built under private finance initiative (PFI) deals scrutinised under a new budget responsibility bill.
Stella Creasy, who has tabled two amendments to the bill, said this would help highlight the scale of debt incurred. She also wants trade deals such as the post-Brexit arrangement with the EU to fall under its remit, arguing these can have an even greater fiscal impact.
Continue reading...Voters believe Labour on UK’s woes, but not on its proposed fixes
Keir Starmer struggling to sell his remedies for the problems facing Britain after Tory mess
The prime minister is struggling to communicate how his government will address the significant problems facing the UK. While the public readily accepts that the last government left a mess, selling Labour’s remedies as necessary or fair is proving more challenging.
The incoming government’s first job was to assign blame for the country’s current woes. This proved relatively easy, given the last government’s unpopularity and the Conservatives’ poor campaign.
Continue reading...Keir Starmer takes a political gamble with message of bad news
Past Labour PMs – Blair, Wilson, Attlee – have tended to arrive in power accentuating the positive
Sir Keir Starmer could perhaps have timed it better. On the day that Oasis, the band that symbolised the mood of sunny optimism that swept Tony Blair to power in 1997, announced their reunion, the prime minister’s message to the nation was that things would get worse before they got better.
Politically, it is quite a gamble. There haven’t been all that many Labour governments in the past 125 years, but they have tended to arrive in power accentuating the positive. That was true of Blair in 1997 and true of Harold Wilson in 1964.
Continue reading...Rachel Reeves planning to raise taxes and cut spending in October budget
Chancellor insists she still has large black hole to fill despite stronger-than-expected growth in first half of 2024
Rachel Reeves is planning to raise taxes, cut spending and get tough on benefits in October’s budget amid Treasury alarm that the pickup in the economy has failed to improve the poor state of the public finances.
With the latest official set of borrowing figures out on Wednesday, the chancellor is insisting she will still have a substantial black hole to fill despite stronger than expected growth in the first half of 2024.
Raising more money from inheritance tax and capital gains tax.
Sticking to plans for a 1% increase in public spending even though it would involve cuts for some Whitehall departments.
Rejecting pressure to scrap the two-child benefit cap.
Changing the way debt is measured to exclude the Bank of England.
Continue reading...UK economy continues recovery from recession with GDP growth of 0.6%
ONS data shows strong performance in second quarter with service sector helping drive growth
Britain’s economy has extended its recovery from recession after recording growth of 0.6% in the three months to June, handing a boost to the chancellor, Rachel Reeves, in the run-up to the autumn budget.
Figures from the Office for National Statistics (ONS) show gross domestic product continued to grow in the second quarter, after a rise of 0.7% in the first three months of 2024. The reading matched the forecasts of City economists.
Continue reading...Liz Truss leaves stage over ‘I crashed the economy’ lettuce banner
Former PM says ‘that’s not funny’ when remote-controlled banner is unfurled behind her at event in Suffolk
Liz Truss left the stage abruptly at an event to promote her own book after campaigners unfurled a banner behind her that was emblazoned with the phrase: “I crashed the economy” below a picture of a lettuce.
The former prime minister, who lasted 45 days in office, was in Suffolk on Tuesday discussing the US presidential election when the campaign group Led By Donkeys lowered its remote-controlled banner with a huge picture of a lettuce.
Continue reading...Jobs market and pay growth are cooling off, large UK employers and recruiters warn
Survey reveals net fall in permanent jobs last month amid lengthening slowdown in employment market
The UK’s largest employers have warned the jobs market is cooling amid a slowdown in wage growth in July and a fall in vacancies, extending an almost two-year downturn in hiring demand for permanent staff.
Figures from the Recruitment and Employment Confederation (REC) and the accountancy firm KPMG showed a fall in permanent staff placements in July as large employers made more redundancies and hired fewer new starters.
Continue reading...Anyone hoping for lower interest rates any time soon will be dismayed by RBA chief’s media conference
Governor Michele Bullock makes clear any expectation of interest rate cuts this year ‘not aligned’ with bank’s present thinking
Those hoping for lower interest rates soon – whether stressed borrowers or those in the Albanese government itching for an early election – would have been dismayed by the Reserve Bank of Australia governor Michele Bullock’s media conference on Tuesday.
The RBA board had just wrapped up the eighth meeting under her leadership and considered just two options for its key interest rate: “hold for some time” or another rate hike. A rate cut was not up for discussion.
Continue reading...Greens say Labour should focus more on building council homes and that new housing plan is flawed – UK politics live
Rayner says housing target system will raise number of homes planned to 370,000 and confirmed targets will be mandatory
Balls, who, of course, is a former Labour cabinet minister, and a former shadow chancellor, questions whether Reeves is right to suggest that Jeremy Hunt is wholly to blame for the black hole. He says that other cabinet ministers and departments drew up the spending plans that she says were unfunded.
Reeves repeats the point she has been making all morning about how the public were misled. (See 8.06am.)
Continue reading...Winter fuel payments to be restricted as Reeves says there is £22bn spending shortfall – UK politics live
Chancellor suggests budget, on 30 October, will involve tax rises and cuts to spending and benefits
Downing Street has refused to comment on a report saying junior doctors are being offered a pay rise worth about 20% over two years.
In a story for the Times, Steven Swinford reports:
The British Medical Association’s (BMA) junior doctors committee has recommended an offer that includes a backdated pay rise of 4.05 per cent for 2023-24, on top of an existing increase of between 8.8 per cent and 10.3 per cent.
Junior doctors will be given a further pay rise of 6 per cent for 2024-25, which will be topped up by a consolidated £1,000 payment. This is equivalent to a pay rise of between 7 per cent and 9 per cent.
As we’ve said before, we’re committed to working to find a solution, resolving this dispute, but I can’t get into detailed running commentary on negotiations.
We’ve been honest with the public and the sector about the economic circumstances we face. But the government is determined to do the hard work necessary to finally bring these strikes to an end.
Continue reading...Hospital and road projects face cuts to plug £22bn fiscal hole, Reeves says
Social care and winter fuel payments also targeted as chancellor accuses Tories of covering up scale of fiscal shortfall
Rachel Reeves has scrapped the social care cap and curbed winter fuel payments, as well as announcing big cuts to hospital and road projects, as she seeks to plug what she called a £22bn hole in public spending that was “covered up” by the Conservative government.
In a statement to the Commons that mixed detailed economics and partisan politics, the chancellor justified the cuts with the repeated mantra: “If we cannot afford it, we cannot do it.”
Continue reading...How bad are Britain’s finances? Five questions on the state of the UK economy | Phillip Inman
Several factors restrict the Labour government’s room for manoeuvre in its agenda for growth
The economic outlook is improving, but a recovery from last year’s recession will be long and arduous without a boost to public investment.
Continue reading...Rachel Reeves to delay some of Tories’ ‘unfunded’ road and hospital projects
Chancellor attempts to plug £20bn hole in spending but will commit to above-inflation public sector pay rise
Rachel Reeves is to delay a number of “unfunded” road and hospital projects on Monday as part of the Treasury’s anticipated plans to plug an apparent £20bn hole in spending left by the Conservatives, while committing to an above-inflation public sector pay rise.
The chancellor is expected to argue she has inherited capital projects that are “unfunded with unfeasible timelines” as part of her Treasury audit report to the Commons. The audit will be seen as an indication of the government’s early commitments and priorities.
Continue reading...NatWest takes £24m hit from abandoned ‘Tell Sid’-style campaign
Bank left with costs from Sir Trevor McDonald-fronted campaign after early election halted rollout
NatWest was forced to spend £24m on the former Conservative government’s aborted “Tell Sid”-style campaign featuring Sir Trevor McDonald, which would have resulted in a chunk of the bank’s state-owned shares being sold to the general public in a highly anticipated privatisation drive.
The price tag emerged when the bank released its second-quarter results and announced it was snapping up a number of mortgages from the smaller rival Metro Bank for £2.4bn.
Continue reading...Mandatory housing targets at core of economy-focused king’s speech
Planning reforms and transport policies included in package of more than 35 bills as Labour prioritises growth
Local councils will have to adopt mandatory housing targets within months under planning reforms to be unveiled on Wednesday as part of Keir Starmer’s first king’s speech, which the prime minister says will be focused on economic growth.
Starmer will introduce a package of more than 35 bills on Wednesday, the first Labour prime minister to do so in 15 years, as he looks to put the economy at the centre of his first year in office.
Continue reading...Labour will not boost military spend without economic growth, says minister
Comments come as PM begins two-day US visit to urge Nato member countries to increase defence spending
The Labour government will not increase spending on the military unless it is also able to grow the economy, the armed forces minister has said, as Keir Starmer comes under pressure to say when Britain’s defence spending will hit 2.5% of GDP.
Luke Pollard said on Wednesday the government wanted to hit the target promised by the former prime minister Rishi Sunak, but would not be able to do so without economic growth.
Continue reading...Keir Starmer and Angela Rayner to kickstart new era of devolution
On fifth day in office, PM and deputy will meet England’s regional mayors as Labour draws up new bill for king’s speech
Every area of England should take over key powers from Westminster, Keir Starmer will say as he and Angela Rayner declare an end to the “levelling up” agenda and look to kickstart a new era of devolution.
The prime minister and his deputy will meet every regional mayor in England on Tuesday on just their fifth day in office, as the party draws up a devolution bill to be launched as part of next week’s king’s speech.
Continue reading...Labour to seek ‘stable position’ with Europe rather than reopen Brexit debate
Shadow business secretary says trying to rejoin single market or customs union would cause ‘more difficulties’
Labour would rather have stability in the UK’s relationship with Europe than try to seek accelerated economic growth by rejoining the EU’s single market or customs union, the shadow business secretary has said.
Addressing the British Chambers of Commerce (BCC) conference on Thursday, Jonathan Reynolds acknowledged that Brexit had been “very difficult for businesses” because it had erected trade barriers, but said reopening the debate would be worse.
Continue reading...Sunak defends decision not to take immediate action against Tories in betting scandal – as it happened
Prime minister faces claim Tories are ‘stealing the candlesticks’ on the way out of government
After a passage in his speech attack Labour on familiar grounds, Rishi Sunak also hit out at Reform UK.
[Reform UK] are not on the side of who you think they are.
Reform are standing candidates here in Scotland that are pro independence and anti monarchy.
Continue reading...