Posts Tagged ‘mhp public affairs’

Scottish independence: Nicola Sturgeon goes for broke in bid for second referendum

Posted on: June 29th, 2022 by Tomas White

What’s happened?

Depending on your constitutional point of view, Nicola Sturgeon has either blindsided the UK Government with a great leap forward towards the promised land or has reprised her role as the Grand Old Duke of York to keep her agitated supporters on side.

Speaking at Holyrood yesterday, the First Minister said that the Scottish Government will legislate for a nonbinding referendum on independence to take place on October 19th 2023. Allied to this, the Scottish Government has written to the UK’s Supreme Court, asking it to rule on its legality. Hearings are expected to begin in September this year, with a ruling possible before the end of the year.

If the Scottish Government loses that court case – and indeed, the bulk of informed legal opinion suggests it will – Sturgeon said the next UK-wide General Election would become a “de-facto independence referendum”. Should the SNP and their fellow travellers in the nationalist cause, the Scottish Greens, win more than 50% of the vote, then they would claim that is a mandate to enter independence negotiations with the UK Government.

What does it mean?

Nicola Sturgeon has often been criticised by her nationalist critics for a tendency towards gradualism on the question of a second referendum. Yesterday’s move, a form of shortbread and circuses for the nationalist movement, has provided it with a renewed focus.

However, the legality of her gamble appear dubious. If in all likelihood, the Supreme Court rejects the Scottish Government’s legal case, the notion that a General Election result of 50.1% of the vote could be used as a surrogate for a legal referendum brings the SNP dangerously close to Catalan territory. Attempting to force the issue unilaterally has the clear potential to backfire both domestically and internationally – polling has suggested that just a third of Scottish voters view having a referendum anytime soon as a priority while the EU, as evidenced by its response to the illegal Catalan referendum of 2017, does not take kindly to separatist movements and potential membership candidates breaking conventional constitutional norms.

Sturgeon has in some ways amplified the element of risk which turned off so many voters from voting Yes in 2014. In setting out this breakneck timetable, it remains something of a moot point whether the Scottish Government and its civil servants will be able to provide a detailed plan encompassing currency, pensions, defence, trade, EU membership et al. given the many valid concerns which exist about their ability to discharge their relatively simple devolved obligations.

What next?

The UK Government remain implacable on the issue of another referendum and will likely use any Supreme Court ruling in their favour as the ballast for that opinion. The nationalists will obviously seek to spin this as the “Westminster establishment” keeping Scotland imprisoned in the UK against its will.

The unionist response will be interesting – while it would be easy for them to blank an unsanctioned referendum, they cannot do that to a UK-wide General Election. Arguably, they should pursue a degree of pugnaciousness to point out the flaws in the nationalist prospectus when it appears rather than simply ignoring this as a tantrum by a leader and a movement which has run out of road and ideas.

Equally, the return of the Scottish question as a key election issue at a time of rising English consciousness could give the Conservatives an unlikely boon in support. This is especially true if they are able to portray Labour and Keir Starmer as willing to form a “coalition of chaos” with the SNP – this is despite Starmer being at pains to bolster his unionists credentials during his time as leader. An overtly English campaign from the Conservatives would in all likelihood play very badly in Scotland to the detriment of unionism there.

Expect months of posturing ahead which will suck all the oxygen in Scottish political and public life towards it. Many will argue that this effort could be better directed towards some of the more pressing issues facing Scotland – it was not unnoticed that to make way for Sturgeon’s statement, a debate on Scotland’s drugs deaths was shunted down the Holyrood agenda yesterday.

Political Insider: Local Elections

Posted on: May 9th, 2022 by Tomas White

A historic result in Northern Ireland

For the first time in Northern Ireland’s history, the largest party at Stormont is a nationalist and republican one. The turbulence being felt in the aftermath of Sinn Fein’s victory will continue for weeks and months to come; it seems unlikely that the DUP, the second largest party, will enter into the power-sharing Executive anytime soon.

Jeffrey Donaldson, the DUP leader, has said that his party’s re-entry into the Executive is contingent on changes to the Northern Ireland Protocol. While there are noises emerging from Government about pushing for changes to the arrangement, these are unlikely to happen immediately, meaning Northern Ireland will be without devolved government for some months.

Some unionists are clinging on to the fact that there are more unionist than nationalist MLAs as a crumb of comfort, yet the historic significance of this event cannot be downplayed. If Sinn Fein also becomes a party of government in the Republic of Ireland, expect the drumbeat for a referendum on Irish unity to grow even louder.

The key constituency then becomes those who voted for the constitutionally agnostic Alliance Party – they returned their best ever number of MLAs at this election, suggesting Northern Ireland has entered an era of three-party politics.

Groundhog Day in Scotland

The immovable electoral force that is the SNP continues to grind on in Scotland. The party’s 11th election win in a row has heralded predictable calls for another referendum on Scottish independence, with the nationalist administration in Edinburgh set to start rolling out its revised prospectus in the months ahead.

However, the timing of that referendum remains up in the air – Nicola Sturgeon’s public assertion that it can take place by the end of next year is met in private with eyerolling by even some of her own loyal lieutenants.

On the unionist side of the fence, Labour will be buoyed that they have returned to second place and won back seats in their former Glasgow and West of Scotland heartlands. For the Scottish Conservatives, this election was final, firm confirmation that the Ruth Davidson era has been consigned to history – the loss of 63 councillors has only increased the pressure on Douglas Ross, who blamed Partygate for the reversals.

With the figures showing that Scotland remains almost evenly split on independence, with the unionists still only slightly ahead, the national question will continue to be the defining issue in Scottish politics.

Red flag continues to fly in Wales

In Wales, Labour continues to be the dominant political force, gaining a council and winning 66 more seats. Mark Drakeford will no doubt be pleased that his party won seats across the country, with Wales continuing to be Labour’s sturdiest electoral redoubt across the UK.

While Plaid Cymru will be pleased to have won three more councils, it is clear that they still have a long way to travel to shift the focus of Welsh politics onto the constitution in a similar way to Scotland and Northern Ireland.

In keeping with the national trend, the Conservatives had in their own words a “disastrous” election, losing control of Monmouthshire, meaning no Welsh councils are controlled by the party.

Energy Security Strategy: What Can We Expect?

Posted on: April 6th, 2022 by Tomas White

What is it?

The Strategy is focused on making the UK’s domestic energy sector fundamentally more resilient and, in the words of the Prime Minister, “wean the country off its dependency on Russian hydrocarbons”.

While Ministers are agreed on the importance of that objective, there have been clear divisions at Cabinet level on how best to achieve it. Predictably, the Treasury has expressed concerns about the cost of some of the flagship announcements such as more nuclear power stations, while there has been resistance from Nimbyish backbenchers and their allies in Government around more onshore wind farm developments.

All of this has contributed to a series of delays to the Strategy’s publication until it was finally signed off last week.

 

What’s going to be in it?

New nuclear reactors look set to be order of the day after years of inertia; the Prime Minister is an enthusiastic proponent, with BEIS Secretary Kwasi Kwarteng pointing to the example of France as a country which has derived energy independence from its strategic investment in nuclear over several decades. Six or seven new power stations by 2030 have been mooted, while a new company called Great British Nuclear will be established to support the small modular reactor sector. This is despite well-documented Treasury squeamishness about the cost.

Offshore wind is set to be the other big winner, with the Prime Minister keen on appointing a “Kate-Bingham like” figure to lead a substantial expansion of the sector. Solar is another green technology which will play a part, with financial incentives and planning changes to stimulate adoption set for inclusion in the plan.

There may also be a reprieve for the North Sea oil and gas sector, with the Prime Minister repeatedly stressing the importance of increased domestic production. Plans for further exploration would however open another front in Westminster’s ever terse relationship with Holyrood; only recently, the SNP Government – supported by the Scottish Greens – said a new oilfield near Shetland should not proceed.

 

What’s unlikely to feature?

Despite some enthusiastic briefing over recent weeks about a potential renaissance for onshore wind turbines – the bête noire of shire Tories – they seem likely to play a less prominent role based on the indications coming out from Government. A counteroffensive led by some backbenchers and their Cabinet allies, notably the Chief Whip Christ Heaton-Harris, who is a longstanding campaigner against onshore wind, appears to have won the day.

It therefore seems unlikely that the effective ban on new onshore wind farms introduced in 2015 will be scrapped in the Strategy, though a review of planning legislation could take place – Kwasi Kwarteng has been keen to emphasise the importance of “community consent” in shaping the delivery of any new developments included in the Strategy.

The science and safety of fracking, which has been enthusiastically championed by some Tory MPs, is to be reviewed again but is unlikely to emerge from the long grass this time round given the controversy which still surrounds it.

 

What happens next?

The Government have positioned the Strategy as essential for the long-term. However, given the problems posed by the cost-of-living crisis, its benefits may not be immediately clear to those people across the country dealing with spiralling bills.

As with the recent Spring Statement, goodwill is likely to be limited – Keir Starmer has already set out his stall, stating the Strategy needs to go harder and faster on hydrogen, onshore wind and tackling energy inefficient building stock.

However, with the emphasis particularly on nuclear, it does signal a step-change in the UK’s energy approach and presents an opportunity for business which seemed unlikely even a few months ago.

The PA team will provide a full summary of the Strategy, detailing key announcements and reaction, following its publication on Thursday.

Political Insider: Spring Statement

Posted on: March 23rd, 2022 by Tomas White
  • Basic rate income tax to fall by 1p to 19p by the end of this parliament
  • National Insurance threshold raised by £3,000, meaning first £12,570 of earnings are untaxed (though planned 1.25 percentage point increase in NI rates from 12pc to 13.25 from April still going ahead)
  • Fuel duty cut by 5p per litre for one year
  • Employment Allowance raised by £1,000 to £5,000, cutting tax bills for small businesses
  • Promise of future tax cuts for business to encourage investment in training, R&D and equipment

 

Nick Vaughan

Director and former Head of Operations for Boris Johnson

Chancellor Rishi Sunak entered this set piece in the political calendar on the back of sustained, carefully thought-through briefings into the Westminster commentariat from his team. Treasury advisors spent yesterday evening briefing about the “ballooning” interest payments of nearly £50bn on the national debt. This was designed to dampen the excitement in some quarters, and the more encouraging numbers on tax receipts and public borrowing would indicate headroom that might allow some fiscal loosening.

The view taken by those around the Chancellor is that – as people continue to watch the horrific scenes in Ukraine and with a country barely back to a “new-normal” post-pandemic – a sense of security and protection was the prescription required from this Spring Statement.

Given the last Budget was only in November, when arguably some of the toughest decisions were made, the Chancellor would originally have been looking at today’s Spring Statement as being a mere tickbox exercise, albeit with the “pain” of his previous tax hikes starting to kick in over the coming weeks. However, with a sizeable gulf opening up between wage growth and the rate of inflation – coupled with the unprecedented increases in energy prices and everyday living – a strong response to a very uncertain political and economic environment was required. So it was that Sunak announced – to significant cheers in the chamber – measures to reduce the impact of rising fuel prices on consumers and to slash VAT on energy efficiency measures. The decision to equalise NI and Income Tax thresholds – effective from the summer – was welcomed by the backbenches and will enjoy significant support from conservative commentators and policy influencers. So too, will the further measures to reduce the tax burden on small, struggling businesses.

The Chancellor was also keen to highlight the various signs of optimism in the economy – as he rightly should. Indeed, the employment figures are hugely impressive with numbers now back to pre-pandemic levels. And he was keen to focus minds on the future and on his overarching commitment to reducing the tax burden over the life of this Parliament – announcing a ‘tax plan’ to reassure backbenchers that he really means it. Setting out his priorities in this area – people, ideas, capital – helps him to frame the conversation around where taxes should most urgently fall.

The background to today was one of mounting stories of families going without food and heating. Last November, it was about cancelling the annual holiday, this spring it about whether you can keep your kids warm and fed. Political reality dictated that help would need to be put in place to help families to bridge the gap. The measures announced today are a temporary effort towards doing that with the tax plan providing the longer-term roadmap towards a lower-tax economy.

Yasmeen Sebbana

Account Director and former Head of Private Office and Forward Planning to Keir Starmer

In the weeks leading up to the Spring Statement Labour would have been planning to attack the Government on the cost of living crisis with a series of targeted criticisms designed to build up the narrative that the Conservatives in general – and Sunak in particular – are to blame for spiralling prices and rising taxes.

However the invasion of Ukraine has forced Labour into a position of constructive opposition similar to the one implemented by the Party during the first months of the pandemic. In her response to the statement today, Reeves reopened these core economic dividing lines to hammer home her message that the Government cannot solve the cost of living crisis, as they are the cause of it.

Labour believe they are on to something with their central economic message that Sunak is a high tax, low growth Chancellor. They feel this critique works on two levels. Firstly, any rise in National Insurance is the wrong decision for the Government to make at a time when the country is dealing with a cost of living crisis and that this is not mitigated by the raised threshold. Secondly, this low growth is a result of over a decade of Conservative mismanagement and that the planned tax rises are being used to prop this up. Reeves also reiterated her characterisation of Sunak as wasteful in overseeing £12 billion lost to fraud and unusable PPE. Instead, she argued, Labour would scrap the National Insurance rise, cut VAT on gas and electricity bills and pay for it with a one-off windfall tax on oil and gas producers.

Reeves’ response is – as always with Statement or Budget responses – part economics, part politics. By pinning the blame on the cost of living crisis as being a result of poor decisions made by the Conservatives, she is able to paint Sunak as a high tax, low growth Chancellor and position Labour as the Party who can now be trusted with taxpayers’ money. She also signals a marked shift from the previous Labour leadership’s focus on higher taxation and instead her emphasis on high-growth and ending waste creates space for Labour to set out their future spending priorities without, she hopes, needing to raise taxes to fund it.

Alan Tovey

Director and former Industry Editor at The Daily Telegraph

It wasn’t a Budget for business (because it wasn’t a real Budget, but a Spring Statement). But then the Chancellor’s hands have been tied not only by events outside his control – Ukraine, the aftermath of Covid, global supply chain issues – but also by Conservative pledges of fiscal responsibility.

He had little room to manoeuvre but did his best, offering up headline-grabbing promises to please voters of cheaper fuel and lower tax for hard pressed households.

But apart from a rise in the Employment Allowance from £4,000 to £5,000, meaning smaller companies will get relief on NI, there was nothing to move the dial.

Markets were unimpressed, but then they weren’t expecting much, so the FTSE 100 edged lower.

Worries that energy companies would be hit with a windfall tax proved unfounded. Despite references to Ukraine and how the UK’s best defence is a strong economy protected by a capable military, there was no arms spending bonanza.

Companies with large fuel costs aren’t exactly celebrating either. The 5p per litre cut in fuel duty helps, but considering diesel was at 125p a year ago and is now 167p, it hardly makes a dent.

Where Rishi did provide a glimmer of hope for business was – as ever – in the future. He acknowledged the UK’s low productivity, attributing it to lower investment, faltering innovation and poorly trained staff. He looks forward to talking with industry about how this can be improved, potential making cheaper investment in upskilling, equipment and R&D. But don’t expect any concrete details until the Autumn, when the (real) Budget comes.

Jamie Lyons

Head of Public Affairs and former Deputy Political Editor at The News of the World

The Chancellor woke up this morning to a slew of demands splashed across the papers.

The Daily Mail demanded Sunak “delve into his bag of tricks” and insisted he could spike the National Insurance hike.

The Sun called for cuts to tax, red tape, the civil service “blob” and bills.

The Mirror pleaded “We need your help, Rishi” pressing him to raise pensions and benefits, scrap the NI increase, and slap a windfall tax on oil and gas giants.

The i called for tax cuts to help businesses invest, while The Daily Express said it expected the Chancellor to help households suffering from the cost of living crisis at the same time as ensuring public services were on a sound financial footing.

For all the Treasury’s expectation management – with sources telling The Sun on Sunday “don’t expect him to pull a rabbit out of a hat. Maybe a few baby bunnies, no more” – the papers reflect what their readers are thinking. As the BBC’s Faisal Islam said, the public now expects more help from the Government than it used to.

But as Patience Wheatcroft wrote in the FT Weekend: “Imagine if the Chancellor decided to be frank about the impossibility of meeting so many demands”.

Sunak was never going to be able to satisfy all those demands. But despite the briefings that this would not be a mini-Budget, the scale of today’s measures mean it will be given the full Budget treatment in tomorrow’s papers.

Much of the focus will fall on the Chancellor’s tax plan. That plan will be set against Mr Sunak’s repeated insistence that he is a low-tax Chancellor. He did not give in to the pressure to scrap the NI hike, but he did take the sting out of it. That may be enough for some papers, but not all.

The FT’s Political Editor George Parker put the figures into perspective. The Chancellor is cutting NI by £6billion and income tax by £5billion. But that’s less than the £12billion he will raise by putting NI up next month.

The fuel duty cut will also be a key focus of tomorrow’s papers. A golden rule of Fleet Street is to only launch a campaign you know you can win. Papers want to demonstrate their influence and it will be splashed across the papers tomorrow as their triumph. The Sun is already reporting it as a “major victory” for its Keep it Down campaign.

As always there was enough in the statement for Tory-supporting papers to get behind while the

Labour papers will insist the Chancellor has not done enough.

There were some big announcements today, but there are some bigger challenges coming with a cost-of-living emergency. As the BBC’s Political Editor Laura Kuenssberg said many of Mr Sunak’s headline-grabbing pledged could soon feel like pretty small beer to struggling families.

MHP Mischief Makes Senior Hire In Booming Public Affairs Practice

Posted on: January 19th, 2022 by Tomas White

Max was previously a top aide to the chairman of the National Infrastructure Commission, where amongst other responsibilities he worked across government and devolved institutions on the strategic National Infrastructure Assessment. He has also held senior roles at Demos and Respublica think-tanks; and is a regular media contributor.

Wind-Cowie’s infrastructure expertise and his experience in research and insights will further boost MHP Mischief’s team which has recently made further hires from the Conservative Chief Whip’s office and Department of Health and Social Care, as well as the appointing ITN broadcaster Charlotte Grant and top Grayling adviser Craig Ling.

It comes at a period of real growth for MHP Mischief’s Public Affairs practice – which jumped four places in the most recent PR Week Top 150 ranking (rising from #12 to #8), and has been shortlisted as one of the PRCA’s Public Affairs Agencies of the Year for the past two years.

The team was recently reappointed by Wine Drinkers UK after helping the industry body secure a freeze in alcohol duty (something that has occurred only three times in the past two decades), and counts brands such as Atos, British Business Bank, South Western Rail, and Portman Group amongst its clients.

MHP Mischief’s Head of Public Affairs Jamie Lyons said:

“I am delighted Max is joining us. His real expertise in infrastructure, energy and industrials will be a huge benefit to our clients. And his understanding of the importance of qualitative and quantitative research will further enhance our offering.”

Max Wind-Cowie said:

“I am very excited to be joining MHP Mischief’s talented and committed Public Affairs team at this moment of growth for the practice. I’ve long admired the team for their campaign ethos and imaginative, effective approach to helping clients to thrive. I can’t wait to get stuck in.”

Political Insider: The Labour Reshuffle

Posted on: November 30th, 2021 by Tomas White

However, until now, Sir Keir hasn’t had the opportunity to stamp his authority on the party and shape the Shadow Cabinet in his own image. That changed with yesterday’s wide-ranging and much more extensive than expected reshuffle; the ultimate outcome of which was to promote Labour’s strongest Parliamentary and media performers, almost exclusively moderates, to senior positions.

Learning from the botched reshuffle in May – which was more widely known for the power struggle that emerged with his Deputy, Angela Rayner – yesterday’s reshuffle showed that Starmer is emboldened in his position and is no longer nervous about making some of the necessary changes required to make the Labour Party electable again.

No more is this evident than the very timing of the announcement, with news of the reshuffle leaking out just as Angela Rayner was preparing to deliver a keynote speech on standards in public life. While initially blindsided by the news, Rayner publicly approached the reshuffle with good grace – although today’s papers are well-briefed that she expected to be part of any reshuffle discussion…

Ed Miliband’s demotion from Shadow Business to a slimmed down Shadow Climate Change position was a shot across the bows for the former Leader who ruffled feathers with his recent book outlining a policy prescription to ‘go big’ and who clashed with the incumbent during party conference. Jonathan Reynolds, well-liked by business leaders in his previous Shadow Treasury position, replaces him.

The most prominent appointment is the return of Yvette Cooper to frontbench politics as Shadow Home Secretary. As one of Labour’s most formidable performers, Cooper brings necessary heft to Labour’s top team and is an importantly recognisable figure to the general public.

Meanwhile, Lisa Nandy was technically demoted from Shadow Foreign Secretary to shadow Michael Gove at the Levelling Up Department, but it is hard to find anybody in Westminster who doesn’t agree that this is a better use of her talents. Needless to say, this role will encompass one of the key policy battlegrounds of the next election. David Lammy, another Commons top performer, replaces her at Shadow FCO.

Yesterday’s promotions weren’t just for seasoned veterans. Wes Streeting and Bridget Phillipson were both promoted from junior shadow ministerial positions to Shadow Health and Shadow Education, respectively – suggesting that Starmer has an eye on the next generation. Expect both to be prominent media spokespeople for Labour in the years to come.

We are potentially only eighteen months away from a general election. Starmer has decided to put in place the team he wants to present to the country as the next government. Yesterday’s reshuffle went a long way to demonstrating that a more competent, moderate, and dare I say, new Labour Party is emerging from a torrid few years for the official opposition.

Nobody doubts that Labour still has a long way to go. Starmer’s dismissal of the left of the party and continued battles over matters such as the suspension of Jeremy Corbyn could cause him serious internal headaches in the future. His assessment, however, is that now is the time to turn away from these internal issues and face the public. With the government’s poll lead faltering, a series of by-elections in the offing and significant policy challenges ramping up, yesterday’s reshuffle may in the future be seen as a decisive moment on Labour’s path back to power.

Political Insider: Budget and 2021 Spending Review

Posted on: October 27th, 2021 by Tomas White

Listening to Rishi Sunak deliver the Budget and 2021 Spending Review, you would be forgiven for forgetting that the last 18 months have seen some of the most turbulent economic times with the UK’s public finances being left in a pretty precarious state.

In heralding the arrival of “an economy fit for a new age of optimism” the Chancellor seems to have taken close note of the Prime Minister’s boosterish attitude and concluded he wants a piece of the action.

That’s not to say some of his optimism is unfounded. The unexpected speed at which the economy has bounced back from the impact of the Covid-19 pandemic, with the OBR upgrading predicted growth for this year from 4% to 6.5%, provides the Chancellor with some of the flexibility he has used to announce significant spending commitments.

With this additional money burning a hole in his pocket, combined with greater receipts from the rise in Corporation Tax announced earlier this year, there is certainly something reminiscent of the Blair/Brown approach towards tax and spend.

The new spending includes £5.9bn to NHS England to clear the waitlist backlog, £6.9bn for a “local transport revolution”, a £3.8bn prison-building scheme, £5bn to remove cladding from high-risk buildings, £3bn for post-16 education, a £1.8bn regeneration investment to support housebuilding amongst a raft of other spending pledges.

With the economy expected to return to pre-Covid levels by the end of this year, total departmental spending will now increase by £150bn over the remainder of this Parliament, amounting to a significant 3.8% annual increase – certainly no return to austerity.

On the tax side, seeking to demonstrate some Thatcherite credentials and hoping to exploit the “Brexit dividend”, Sunak announced a total of £7bn of tax cuts for businesses, including a new 50% business rates discount for those in hospitality, retail and leisure up to a maximum of £110,000 in 2022, as well as a freeze on fuel duty and reforms to Tonnage Tax, Air Passenger Duty and alcohol duties.

There was a sting in the tail, however, with a three-year delay to the £22bn annual R&D spend target to 2026 and the Chancellor acknowledging that the tax burden is rising to its highest level as a percentage of GDP since the 1950s.

Overall, in doubling down on the Prime Minister’s commitment to make the UK an economy of higher wages, higher skills, and higher productivity the Chancellor has placed his flag firmly in the ground alongside Boris Johnson.

This will worry some of his Conservative colleagues, some who feel the drive towards higher wages will result in a self-perpetuating circle of rising inflation and rises in the cost of living, and others who remain concerned that the Conservatives will no longer be seen as the party of the small state and low taxes.

To that end, the Chancellor also announced new fiscal rules in the form of a new “Charter for Budget Responsibility” which will state that underlying net debt must be falling as a percentage of GDP and, in normal times, borrowing can only be for infrastructure investment, with day-to-day spending being funded only through taxation. Whether this will be enough to placate some of the Chancellor’s colleagues remains to be seen.

The elephant in the room is, of course, the next General Election.

Although not due until 2024 – in theory there are only two more Budgets before that – there is significant pressure to be making progress now, to getting shovels in the ground, so that come next polling day, those first-time voters who delivered the 2019 landslide can see the tangible benefits their vote led to.

The Chancellor and his team will probably be reflecting on a job done, whether it was done well or not remains to be seen and only after the finer detail of the Budget is pored over in the hours and days ahead.

Catch up on our budget analysis breakfast below:


The Labour View

Leader of the Opposition is a thankless job at the best of times. It is at its particular worst on Budget Day when due to the theatre of the event, the Leader of the Opposition is forced to respond to the Budget immediately after hearing it for the first time.

Today was made even more difficult for the Labour Party, and not just because Rachel Reeves, the Shadow Chancellor, had to stand in for self-isolating Keir Starmer at the last minute. No, it was made harder because a lot of Sunak’s Budget was in effect a repudiation of Conservative policy over the past decade – and indeed, it’s not hard to imagine vast swathes of it being delivered by a Labour Chancellor.

As it happens, Reeves made a convincing impromptu debut with a quick-witted opening reference to the Budget as one for ‘the bankers, sipping champagne on their short haul flights’, reflective of her skill as a seasoned Commons orator. Her response also provided a clear indication of where Labour is going to set its economic stall ahead of the next election. The party now recognises that it can’t out-spend a Conservative Party who has suddenly found common kinship with the Magic Money Tree, but it can promise better value spending and better-run public services.

The question which remains is whether this more technocratic argument will be enough to combat Boris Johnson – and now Rishi Sunak’s – boosterism.

The Detail

Current state of economy/OBR forecasts

  • Inflation is likely to rise, estimates suggest by an average of 4% over the next year. Explained by two global forces: (1) global economies reopening has made demand greater than supply; (2) global demand for energy has surged. It will be “months” before these problems can be “eased”
  • National actions to tackle the above: Transport Secretary announcing today new facilities for lorry drivers. Freezing vehicle exercise duty. Extension of HGV levy until 2023
  • OBR expect UK economy recovery to be “quicker” – UK will return to pre-Covid size at the beginning of 2022
  • Economy will grow by 6% in 2022
  • OBR expect unemployment to peak at 5%, original estimate 12%
  • Employment has grown by 3%
  • OBR forecast for business investment has been revised up for the next five years
  • OBR has revised down scarring assumption from 3% to 2%

Strengthening the public finances

  • Establishment of Charter for Budget Responsibility with two new fiscal rules “which will keep this Government on the path of discipline and responsibility”
  • The first rule is that underlying public sector net debt, excluding the impact of the Bank of England, must, as a percentage of GDP, must be falling.
  • The second is that “in normal times” the state should only borrow to invest in our future growth and prosperity.
  • 3% of GDP is on capital investment
  • The four fiscal tests set out by the Chancellor in the last Budget have been met, Sunak says
  • 0.7% of GDP spending on foreign aid will return in 2024/25 due to meeting fiscal tests
  • £150 billion increase in departmental spending budgets due to meeting fiscal tests

Supporting children

  • £300 million towards ‘A Start for Life’, supporting new parents, and £150 million for Early Years training and holiday programmes, on top of the previously announced funding for Family Hubs Funding to create a network of family hubs around the country
  • £200 million in supporting families programme
  • £200 million a year holiday and food programme

Schools

  • £4.7 billion by 2024/25, to restore per pupil funding to 2010 levels
  • Tripling of new school places for children with special needs
  • £2 billion of new funding to schools and college
  • Total education recovery fund at £5 billion

Communities

  • £560 million for youth services
  • £200 million to build or transform 1000 football pitches
  • Allocating first-round of bids from the levelling-up fund.
  • 20,000 new police officers, an extra £2.2 billion for courts and rehab facilities and £3.8 billion for prison-building

Culture and heritage

  • £800 million to protect museums, libraries, local culture
  • 100 regional museums to receive renovation funding
  • Review of museum freedoms to protect freedoms and culture
  • “More generous creative tax reliefs”
  • Tax reliefs for culture will be doubled until 2023

Infrastructure

  • “This government chooses to invest”.
  • £21 billion on roads, £46 billion on railways
  • £5.7 billion for London-style transport settlements in Manchester, Liverpool, West and South Yorkshire, the West of England
  • £2.6 billion for long-term pipeline of 50 local road upgrades
  • Bus funding of £5 billion pounds
  • Spending on cycling infrastructure of more than £5 billion, the same funds will also be spent on local minor roads

Innovation

  • R&D investment will be £22 billion by 26/27. £20 billion investment by end of this Parliament, which is in addition to R&D tax reliefs already announced
  • £107 million investment by National Investment Bank for offshore wind site in Teesside

Business

  • Announcement of consulting on further changes to regulatory charge cap for pension schemes
  • £1.4 billion Global Britain Investment Fund
  • British Business Bank regional financing programme increase in funding of £1.6 billion
  • Scale-up visa criteria confirmed
  • Expansion of R&D tax reliefs to cloud computing and data costs (modernised R&D tax regime)

Education system “for all”

  • Skills spending increase by £3.8 billion, an increase of 42%
  • New UK wide numeracy programme for adults – ‘Multiply’ – £560m investment.

Taxation

  • Shipping: Reform of tonnage tax regime. Regime will reward hoisting of the UK Merchant Shipping flag – the Red Ensign.
  • Air Passenger Duty: Domestic flights from April 2023 will be subject to a new, lower rate of air passenger duty. 9 million passengers will be see a 50% reduction in tax.
  • Extending support for English airports for a further 6 months.
  • £1 million annual investment allowance will not end in December, will be extended to March 2023
  • Bank surcharge in corporation tax: UK government will retain surcharge of 3%
  • Annual allowance will be £100 million to help challenger banks
  • Chancellor asks: “Do we want to live in a country where the response to every question is what is the Government going to do about it?”. He adds that the Government “should have limits”, and as a result, his goal is to reduce taxes by the end of this Parliament

Rates

  • More frequent evaluations – every three years – for business rates
  • Introducing new investment relief to encourage businesses to adopt green technology
  • Introducing a new Business Rates Improvement Relief. From 2023, every business will be able to make property improvements with no additional business rates for a period of 12 months.
  • Investment incentives total £750 million
  • 2022’s planned increase in the Multiplier will be cancelled
  • 50% business rates discount in the retail, hospitality and leisure sectors. Business tax cut worth over £100 billion
  • Today’s Budget cuts rates by £7 billion

Alcohol duties

  • “Most radical simplification of alcohol duties in 100 years” in five steps:
  • Step One: Slashing number of main duty rates from 15 to 6
  • Step Two: New small producer tax relief
  • Step Three: End duty premium on sparkling wines and fruit cider
  • Step Four: Draft relief announced of 5% – new lower rate of duty on draft beer and cider
  • Planned increase on duty on spirits, wine, whisky will all from 28 October cancelled. A tax cut of £3 million

Cost-of-living

  • Planned rise in fuel duty will be cancelled – a saving of £8 billion
  • National Living Wage increase to £9.50/hr, a full-time pay increase of £1,000 per year

Benefits

  • Sunak confirms that he will cut the universal credit taper rate from 63% to 55%. The Chancellor says it will be introduced by no later than 1 December

The Union

  • Scottish Government funding up by £4.6 billion, Welsh Government funding by £2.5 billion, and £1.6 billion for the Northern Ireland Executive, via the Barnett formula

Housing

  • £24 billion is earmarked for housing: £11.5 billion to build up to 180,000 affordable homes, with brownfield sites targeted for development; £5 billion for the removal of unsafe cladding for the highest risk buildings

Political Insider: Conservative Party Conference

Posted on: October 6th, 2021 by Tomas White

This was in part because people were looking for answers about what the Prime Minister hoped to achieve in the 2020s beyond getting Brexit done and defeating a once in a century pandemic, but also because his most senior adviser for his first 18 months in office had begun his select committee / Substack / Twitter offensive against “The Trolley” and his wife, Carrie Johnson. But whilst Dominic Cummings’s vengeful characterisation of the Government was very effective at shaping the political narrative before the summer, it now looks completely misplaced a few months on.

The decision after the summer to increase taxation to pay to clear the NHS backlog and increase the funding for social care was certainly not the action of an indecisive Prime Minister. This was immediately followed by a far-reaching shakeup of the Government, promoting ‘boosterish’ doers capable of delivery. And this week we had the Conservative Party conference, which was light on policy announcements but heavy on big political calls.

The big call on energy is a doubling down on net zero. In the face of increasing gas prices, the Government announced its commitment to ensuring that all of Britain’s electricity comes from renewable sources by 2035, thereby reducing our dependence on gas and coal. To back this up, the Government is set to announce two large scale nuclear power plants in addition to Hinkley Point, to assist the transition away from gas.

And the big call on the UK labour market is to reduce the country’s dependence on workers from overseas, who are willing to accept the low wages that have become a feature of so many sectors of the economy. This is a big and risky call. As ministers acknowledged, it will result in supply chain issues and a somewhat bumpy transition. But to use the phrase from Margaret Thatcher echoed by the PM – there is no alternative. As he said in his conference speech, he wants to build a “high-wage, high-skill, high productivity and, yes, low tax economy.”

Other announcements made in Manchester, such as Dominic Raab’s review of the Human Rights Act, received less prominence, but have the potential to be as significant as the calls on energy and employment. What we are seeing is a Government reorientating itself from being all consumed by single points of focus (Brexit/Covid), to one which wants to use its 80-seat majority to fundamentally reshape the country in the 2020s.

Commentators might like these calls, or not like them, and there is certainly a policy debate to be had around each one. But when it comes to the accusation that the Government is unfocused and visionless, that has been decisively refuted. The Prime Minister has had a strong start to the Autumn, showing himself to be more of a tank than a trolley. As for Keir Starmer, whilst his conference wasn’t disastrous, it did highlight just how far the Labour Party is from No10, which is why the 2020s look set to be Boris’s decade.

Matthew Elliott is a Senior Adviser to MHP and was CEO of Vote Leave

What the German elections mean for the future of UK-EU relations

Posted on: October 1st, 2021 by Tomas White

In a world of soaring energy prices, a supply chain crisis and dwindling petrol reserves, you could be forgiven for having missed the results of this weekend’s federal election in Germany. Post Brexit it may even seem that the results of these elections are even less relevant to the UK than they were when we were members of the EU. The reality, though, couldn’t be further from the truth: these elections have profound repercussions on the EU’s leading voices, and what that means for the UK’s future relations with the bloc.

German politics’ fundamental shift

Two parties have dominated German politics since the end of the Second World War: the centre-right CDU and the centre-left SDP. Yet not long ago, the papers were awash with the shock polling putting the German Greens ahead in the race for the Chancellery. It looked like the herald of a new era – a great realignment of German politics, to address the great challenge of climate change.

The excitement proved to be gravely exaggerated. Yet, despite a significant dip in the polls since the dizzy heights of 29% in April and May, the Greens still secured their best ever result with 14.8% of the vote, almost doubling their number of seats in the Bundestag. This came largely at the expense of the CDU/CSU alliance – Angela Merkel’s party which has governed Germany for 32 of the last 39 years – polling its worst result ever at 24.1% of the vote, handing victory to the SPD which secured just 25.7% of the vote. The pro-business, liberal FDP polled 11.5%, while the far-right AfD and far-left Die Linke polled 10.3% and 4.9% respectively.

Observers should not be fooled by the SDP’s narrow victory – their candidate for Chancellor, Olaf Sholz, is no radical change or new dawn for German politics. As the current Vice-Chancellor and Finance Minister in the ‘Grand Coalition’ which has governed Germany since 2017, he has succeeded in positioning himself as the natural successor to Merkel.

Yet the truth is that Merkel’s departure leaves a power vacuum at the top of the EU which will not be filled by the new German Chancellor, whoever they may be. They simply lack the gravitas or authority to do so, and even if they possessed such traits, they will in all likelihood have to govern at the head of an unprecedented 3-party coalition, alongside the Greens and the FDP, significantly curtailing their authority. Even if we see another re-run of the ‘Grand Coalition’, it will be very much a coalition of equals, bringing with it its own challenges.

The European Succession

There is only one leader who can fill the post-Merkel vacuum, and he’s been itching to fill the role for years: French President, Emmanuel Macron. His own unique brand of Napoleonic ambition is not constrained by the leadership of France — for anyone doubting this, think back to his invitation to US President Donald Trump to attend the Bastille Day military parade in 2019 — Macron’s desired legacy is a global one.

He is also ideally placed to succeed Merkel as the leader of Europe. Broadly centrist and thus able to work with leaders from across the political divide, he is passionately pro-European: it is not for nothing that he chose to walk out to Beethoven’s Ode to Joy, Europe’s national anthem, to greet the French people following his election in 2017.

This is all despite his own fraught position at home: the leader of the far-right Rassemblement Nationale, Marine le Pen, is feeling more confident than ever at her prospects of securing the keys to the Elysée Palace next year. In truth, though, there is still no viable opponent emerging from the ashes of the previously dominant Socialists or the Republicans and, while many in France may be frustrated with Macron, far more will be horrified at the realistic possibility of a far-right President.

There is also no real alternative within Europe and not simply because France is the second-largest nation within the bloc: Italy or Spain could also potentially vie for the position, but neither has the political stability to maintain a position at the head of the EU.

The future of EU-UK relations

The real question for the UK will be how this affects its continuing relationship with the European bloc. Tensions were already high between France and the UK over how to deal both with migrants crossing the channel and fishing rights around the Channel Islands. The AUKUS deal announced last week will only have exacerbated this.

Macron was significantly more aggressive that other European leaders in his negotiation tactics during the Brexit transition period and will likely seek to secure significant concessions from the UK if that settlement is to be amended at any point in the near future. This bodes ill for the UK’s continuing row with the EU over the Northern Ireland backstop which has, in effect, created a customs border down the Irish Sea. While the PM might hope to renegotiate this aspect of the Withdrawal Agreement, Macron is highly unlikely to budge.

The key to understanding negotiations with Macron will be in accepting that he is far more interested in shoring up his own power than in brokering agreements with third countries: for the French President, looking powerful will be just as important as securing policy objectives, especially with the French elections coming up next year. With the French electorate veering to the far right and blaming many national ills on the effects of immigration, Priti Patel’s attempts to force his hand on preventing illegal migrants crossing the channel only plays into Macron’s hands, domestically.

Macron’s commitment to the European project will also be a key factor in his approach to post-Brexit relations with the UK. He certainly views Brexit as an unprecedented act of national self-harm and is unlikely to do anything to mitigate any domestic fallout from the UK’s decision to leave the EU. The current supply chain crisis and the dampening effect of additional bureaucracy on trade with the EU are therefore unlikely to be alleviated anytime soon.

Even with Boris Johnson’s famous charisma and charm — both of which impressed EU leaders at their summit in Lisbon in 2019 — there is no doubt that the Macron era of UK-EU relations will be more difficult to navigate than it was under Mutti Merkel.

Political Insider: Labour Party Conference

Posted on: October 1st, 2021 by Tomas White

This year’s event, the first in-person opportunity for Keir Starmer to meet the party faithful (and not-so-faithful), was always going to be a tumultuous affair, with the inclement weather merely providing an appropriate backdrop to the internal fights happening within the Brighton Centre.

As it happened, the storm quickly passed – and Keir Starmer and the ‘mainstream’ of the Labour Party came out on top.

The main takeaway for many from #Lab21 is that Corbynism has been excised from the party, with Starmer now entering a new phase of his leadership where he can turn his attention squarely towards the country.

The big question facing Labour is, is the country willing to listen?

A popular story doing the rounds in Brighton was that during his days as a lawyer, Starmer was “always better at convincing the judge than the jury”. In other words, his well-received performances at the Despatch Box are commendable, but can he pivot his intellect and grasp of detail into a connection with the electorate at large?

We saw how this may play out in practice today with his long-awaited speech to party conference. Billed as Sir Keir’s first opportunity to speak in-person to a conference hall since winning the leadership, there was a risk that anything he said would suffer from the level of hype and expectation that had come to surround it.

In reality, his team will be thrilled with today’s performance, and Starmer himself will feel far more secure in his leadership of the party than he has at any point even over the last week.

Delivered with confidence and a more optimistic tone than we’ve come to expect from Labour Leaders in recent years, Starmer made abundantly clear that Labour is under new management: a point that was only reinforced by audience heckles from the left, the theatre of which was more than helpful in underscoring his narrative that Labour is now once again focused on power over protest.

There was plenty of substance too, with key policy announcements packaged into an overarching message of a fairer and greener Britain, run by a Labour Party that would never again go into an election with a “manifesto that is not a serious plan for government”.

Directly addressing the fuel crisis, he lambasted Boris Johnson with a line that well resonate. “Level up? You can’t even fill up”. Emphasising his record in the Crown Prosecution Service, Starmer drove home the message that he locked up dangerous criminals and terrorists – drawing a stark contrast to his predecessor. And riffing on Tony Blair’s “education, education, education”, he announced new policies to tackle inequality across sectors and the country.

If there is a criticism of the speech, it’s that it was far too long. At points, some may have been wondering if he was simply reading out his recent 14,000-word tome. In a world in which first impressions count, as per our New Rules of Influence research, this may indicate there is more work to do on the politics of presentation.

Today’s coverage, however, will be a win for his team. Expect a focus on the break with Corbynism, the adoption of new policies that will resonate with many voters, and the new Leader finally having a chance to present himself to the public. This will worry CCHQ who, one has to imagine, for the first time in recent memory will have paid particular attention to this speech.

Earlier in the week, there was plenty of criticism of Labour from the commentariat, accusing the party of internal naval gazing at a time when the country is facing an acute crisis. However, the gamble of initiating sweeping rule changes to symbolise Labour’s break with the past paid off and, indeed, is the necessary first step of detoxifying the party for many voters.

As the public’s attention moves away from the pandemic and the cost-of-living crisis continues to bite, we can expect politics to return to a relative semblance of normality. Within this, we should expect an Opposition Leader – and a new Opposition Leader at that – to get a fair hearing from the public. Based on today’s speech, the Conservatives would be advised to take Labour seriously again for the first time in a very long while.

Thomas Messenger is a Labour Party activist.