Andy Burnham to face first PMQs as borrowing costs rise – UK politics live | Politics
Burnham to take PMQs as borrowing costs rise, and thinktank says higher defence spending not ‘realistic’ without tax rise
Good morning. Andy Burnham will face PMQs for the first time as PM today but he already has a fairly good idea of the questions he might get from Kemi Badenoch because she rehearsed them all yesterday. Here is an excerpt from the press release the Conservatives put out yesterday summarising those questions – and their take on how Burnham responded.
Kemi Badenoch asked if Burnham would:
-Set out a plan to get defence spending to 3% of GDP;
-Confirm whether Labour will use a Rwanda-style deal to secure our borders;
-Set out a timeline to get foreign-born prisoners out of British prisons;
-Pledge no new taxes at the forthcoming budget; and
-Stand up to his own backbenchers and cut benefits.
In response, Burnham floundered and couldn’t give straight answers to clear, straight questions.
Today Badenoch may well ask again about tax, benefit cuts and the economy.
And that is because, while Westminster was focused on Burnham’s impressive debut in the Commons yesterday afternoon, the more significant story may have been happening elsewhere, on the financial markets. The Telegraph sums it up like this.
Not for the first time, the Telegraph’s headline was not entirely fair to a Labour prime minister. As Heather Stewart explains in her Guardian story, the government’s long-term borrowing costs did jump “to their highest level since early 1998 on Tuesday as investors dumped government bonds” – but this was mainly the result of international factors.
As Graeme Wearden reports in his business live blog today, the UK is not the only country where government borrowing costs are soaring; Graeme says Australia, India and Germany are among other states facing similar problems.
But, just because the UK is not alone, that does not mean the problem is not real; as Heather reports in her story, the rise in borrowing costs means the Treasury has lost £12bn from its fiscal safety net. She quotes an economist saying “based on Tuesday’s yields, [the Treasury’s] headroom against the current budget rule would fall from £26bn at Rachel Reeves’s spring forecast to £13.8bn before covering any additional spending plans.”
When Badenoch challenged Burnham over tax yesterday, he pointed out that in his first week in office he made two tax-cutting announcements. But he refused to oblige her by ruling out tax rises in the budget.
Today the Resolution Foundation thinktank (whose former chief executive, Torsten Bell, is now a Treasury minister) has published a report saying that, if Burnham wants to raise defence spending, as he proposes, taxes will probably have to rise for ordinary workers. It says:
International data shows that the rise in employer national insurance contributions (NICs) last year and frozen tax thresholds in the UK have led to the largest annual rise in taxes on average workers across 33 comparable OECD rich countries. Strikingly, however, this was from a very low base – lower than the US, for example. The UK remains in the bottom third of such countries for the level of tax on an average worker, and the effective tax rate on a typical earner is still lower than it was before the financial crisis. Indeed, no country raises more in total tax as a proportion of GDP without also asking more of single average earners.
This analysis strongly suggests that any politician promising a bigger state and lower taxes on middle earners is not being realistic. So if we want to increase defence spending, then there is a clear case for paying for this through broad-based tax rises that include typical earners paying more.
With all this on the table, PMQs is likely to be dominated by questions about tax and borrowing.
Here is the agenda for the day.
9.15am: Michael Shanks, the energy minister, Ofgem officials and other energy experts give evidence to the Commons energy committee about the electricity market.
9.30am: Stephen Timms, the social security and disability minister, gives evidence to the Commons work and pensions committee.
Morning: Rhun ap Iorwerth, the Welsh first minister, holds a press conference in Cardiff ahead of the start of the Senedd year.
Noon: Andy Burnham faces Kemi Badenoch at PMQs.
After 12.30pm: MPs debate the remaining stages of the representation of the people bill.
Afternoon: Nigel Farage, the Reform UK leader, is doing an interview with Chris Mason, the BBC’s political editor, ahead of the party’s conference that starts on Friday.
I’m afraid we are no longer able to have comments open below the line every day on this blog. If you want to contact me, please email politics.live@theguardian.com. You can use this email to flag up corrections, comments for publication, questions or complaints.
Key events
Louise Haigh, the first secretary of state and Cabinet Office minister, will make a Commons statement after PMQs on “rewiring the state”. This will cover the ambitious devolution plans published by the government during the summer recess.
Can Burnham change PMQs?
Alexandra Topping has written a good preview of the challenge Kemi Badenoch faces at PMQs today. As she puts it, “early indications suggest [Badenoch] understands that Burnham’s folksy Hovis advert charm may require a different approach.”
Burnham faces an even bigger challenge. He became Labour leader and PM arguing that the Westminster political model functions in a way that is holding Britain back, and he has pledged to shake it up. He has said that he views PMQs as part of the problem, and suggested he would like to change the way it is conducted. But he has not properly explained how. According to a BBC report, this might mean a “tonal shift”, more jokes and less reliance on notes.
To older readers, some of this may sound familiar. Previous incoming prime ministers have tried to change PMQs – and failed. David Cameron said that he wanted to “end Punch and Judy politics” at PMQs. Keir Starmer said that, as part of his approach to PMQs in opposition, he would focus on “constructive criticism”. Trying to make PMQs gentle and civilised never seems to work because the dynamics of the event institutionalise conflict. Cameron explained it like this in an interview in 2013 explaining why Punch and Judy were still alive and well.
People don’t believe it but MPs do work hard and for 30mins each Wednesday they go effectively to the Colosseum and [what] they see are the Christians going to be eaten by the lions. And you’ve got a choice – are you going to be a Christian or a lion? It pays to get stuck in. When we’ve tested this. The public expects PMQs to be robust.
Historically, trying to make PMQs more dignified has been a bit like saying that boxing matches would be better if contestants didn’t actually hit each other.
But PMQs can change. In its modern form, it only started in the 1960s. Blair failed to change the tone of PMQs, but as soon as he won the 1997 election he changed it from being a twice-weekly event (two sessions of 15 minutes, on Tuesdays and Thursdays) to being a once-a-week event (half on hour on Wednesdays). If Burnham really hates PMQs, he could consider further reform along those lines, but he has expressed no interest in doing that.
Polanski says Greens will make Holborn and St Pancras byelection ‘referendum on ending rip-off Britain’
Zack Polanski, the Green party leader, has said that the Holborn and St Pancras byelection will be “a referendum on ending rip-off Britain”.
In a statement to mark the first anniversary of his election as Green leader, Polanski said:
The Holborn and St Pancras by election will be a referendum on ending rip-off Britain. Only the Greens have a real plan for real hope and change.
We will announce our candidate in due course and they will set out an exciting agenda for the deep change our country needs.
I am proud of what I have achieved in the first year of my leadership of the Green party but it is just the start.
I am very excited for the next chapter for myself, for the Greens and for people across the country.
Polanski said earlier this year that he would “almost certainly” stand in a future byelection in London and he is expected to apply to be the Green candidate for Holborn and St Pancras. Polling figures, and the results of the May local elections, suggest Labour should win the byelection, but Polanski has been a formidable campaigner and his entry into the contest would upend expectations.
According Politico, Polanski has already started campaigning. In their London Playbook briefing, Andrew McDonald and Megan McElroy report:
Polanski hasn’t confirmed he intends to run in Keir Starmer’s Holborn and St Pancras seat, but … Green officials put out an afternoon statement saying “Zack has always made it clear he would like to be a London MP,” he was knocking doors in Camden last night and he sent out a quote saying “I am very excited for the next chapter for myself.” See if you can decipher that one. One person in the party said they expect him to put himself forward for selection this week.
But my POLITICO colleague Isabel Loubser (formerly of the Islington Tribune) hears from two Green figures that one of Polanski’s two deputy leaders, Mothin Ali, is also interested in running. One person says he would potentially gain the backing of two key leftie groups in the constituency: the Camden People’s Alliance and a local Muslim alliance too. The seat has a big Bengali and Muslim community.
Scottish government accused of ‘slash and burn’ approach to health boards
Patrick Greenfield
Patrick Greenfield is a Guardian reporter covering Scotland.
Reaction to Scottish first minister John Swinney’s programme for government is still coming in this morning after he unveiled the SNP’s plans for the next five years in Holyrood yesterday. A major restructuring of local government and NHS health boards, and a new misogyny bill to crack down on violence against women and girls were among the most eye-catching announcements.
Swinney also insisted that his administration will move forward with plans to introduce a legally binding price cap on bread, milk and other essential food items despite strong opposition from farming and business groups.
The Scottish Greens’ co-leader, Ross Greer, said it was a “disappointing” programme that Nicola Sturgeon would not have backed, urging the SNP to roll out a £2 bus fare cap in the Highlands and west Scotland to the entire country. He also criticised Swinney for “throwing open the doors to tech billionaires by encouraging more applications to build hyperscale data centres in Scotland”.
In his speech, the first minister said there would be a strategic approach to green data centres “with clear expectations” around environmental and community benefits, something which was cautiously welcomed by campaign groups, but there was no suggestions of an outright moratorium.
On the health board overhaul, the union Unite criticised the programme for government as a “slash and burn” agenda, warning that it was likely to result in job losses. “Reducing health boards does not reduce workload or staffing pressures. Unite will not stand by and allow workers and services to be attacked,” said Unite regional coordinator James O’Connell.
Cabinet Office minister Sally Jameson rejects suggestions government does not have firm control of spending
Sally Jameson, a Cabinet Office minister, was the No 10 voice on TV and radio this morning. In interviews, she insisted that Andy Burnham did take fiscal responsibility seriously.
Asked about Jim O’Neill’s claim that Burnham’s tone in the comments yesterday would have concerned investors, (see 9.36am) she told Sky News she did not agree. She explained:
I think it’s important we don’t over-read into individual comments people make, because I think Andy Burnham has been really clear that we are going to stick to those fiscal rules rigidly, and that fiscal responsibility is absolutely imperative.
We’ve got to have controls on spending, and I don’t think Andy or anyone else has said any different to that.
And on the Today programme she said Burnham was “absolutely clear that we will be sticking to the fiscal rules and making sure that we’re controlling public spending”.
Former bank chief Howard Davies joins O’Neill in urging Burnham to scrap pensions triple lock
Sir Howard Davies, a former chair of NatWest and a former chair of the Financial Services Authority, echoed Jim O’Neill’s comments (see 9.36am) this morning. In an interview on the Today programme, he said Andy Burnham’s stance on economics was causing some concern in the markets.
Davies said the rise in long-term UK government borrowing costs yesterday was not “a major crisis of confidence in the UK government”.
But, asked if Burnham’s approach to public spending was causing “some market jitters”, he replied:
Yes, I think it is.
Unfortunately, we do have a circus built around our budgets, which actually does not happen in many other countries. There is a whole industry of people … to create expectations and then dash those expectations, and I think we are going to face a very dicky period between now and the budget.
I think we’re going to see a very uncertain period for the next three or four weeks, and it would be helpful if the government could make some signs about their overall approach to the fiscal balance, which I think could calm things down a bit.
Davies, like O’Neill, also said the government should get rid of the pensions triple lock. “If a government does not grasp that nettle at some point, then I think its credibility is going to be on the rack.”
Burnham has committed to keeping the pensions triple lock for the duration of this parliament, saying he has to because that is what Labour promised in its manifesto.
He has not said anything about his plans for the triple lock in the next parliament. But with Reform UK, the Conservatives and the Lib Dems all in favour of keeping the triple lock, it is not hard to see why he does not want to break ranks and suggest it could go after 2029.
Burnham’s Commons speech ‘last thing’ bond market wanted to hear because it implied more spending, Jim O’Neill says
Andy Burnham’s speech to MPs yesterday was “the last thing” that investors wanted to hear, according to Jim O’Neill, the former Goldman Sachs chief economist who served as a Treasury minister under David Cameron.
O’Neill, who sits in the Lords as a crossbencher, is not a regular Burnham basher; he is a big supporter of Burnham’s devolution agenda and he has been an informal adviser to the PM. There were even discussions about his taking a job in the No 10 team, which floundered because he did not want a formal role.
But potential policy disagreements also seem to have been a factor, and in an interview on LBC last night O’Neill said investors would be worried by the fact that Burnham seemed to express no interest in cutting spending. He said:
Andy made his first big speech in parliament since after the recess … and the tone of it, implying a lot more government spending to take control of X, Y, and Z, is the last thing that investors want to hear on a day where all of this is going on in the background.
And so yes, they’re like, ‘Who’s going to get real in this country about the challenges of getting our debt down and controlling spending?’
O’Neill also said it had been a tough day for government borrowing.
‘It is a tough day. Ten-year gilt yields or 10-year interest rates have risen by a quarter of a percent, which in one day is a lot. We’ve not had that since Liz Truss days …
If your country, whether it be ours or others, is under the focus of ‘Can they come up with a sensible fiscal strategy?’ on a day where the markets think ‘Well, no you’re not showing any signs of it’, they’re going to have a bad day.
O’Neill followed this up with an interview to the BBC where he said Burnham should end the pensions triple lock and cut welfare spending “in a credible manner”. He said these were “golden opportunities” because they would lead to a “significant decline” in government borrowing costs.
Burnham to take PMQs as borrowing costs rise, and thinktank says higher defence spending not ‘realistic’ without tax rise
Good morning. Andy Burnham will face PMQs for the first time as PM today but he already has a fairly good idea of the questions he might get from Kemi Badenoch because she rehearsed them all yesterday. Here is an excerpt from the press release the Conservatives put out yesterday summarising those questions – and their take on how Burnham responded.
Kemi Badenoch asked if Burnham would:
-Set out a plan to get defence spending to 3% of GDP;
-Confirm whether Labour will use a Rwanda-style deal to secure our borders;
-Set out a timeline to get foreign-born prisoners out of British prisons;
-Pledge no new taxes at the forthcoming budget; and
-Stand up to his own backbenchers and cut benefits.
In response, Burnham floundered and couldn’t give straight answers to clear, straight questions.
Today Badenoch may well ask again about tax, benefit cuts and the economy.
And that is because, while Westminster was focused on Burnham’s impressive debut in the Commons yesterday afternoon, the more significant story may have been happening elsewhere, on the financial markets. The Telegraph sums it up like this.
Not for the first time, the Telegraph’s headline was not entirely fair to a Labour prime minister. As Heather Stewart explains in her Guardian story, the government’s long-term borrowing costs did jump “to their highest level since early 1998 on Tuesday as investors dumped government bonds” – but this was mainly the result of international factors.
As Graeme Wearden reports in his business live blog today, the UK is not the only country where government borrowing costs are soaring; Graeme says Australia, India and Germany are among other states facing similar problems.
But, just because the UK is not alone, that does not mean the problem is not real; as Heather reports in her story, the rise in borrowing costs means the Treasury has lost £12bn from its fiscal safety net. She quotes an economist saying “based on Tuesday’s yields, [the Treasury’s] headroom against the current budget rule would fall from £26bn at Rachel Reeves’s spring forecast to £13.8bn before covering any additional spending plans.”
When Badenoch challenged Burnham over tax yesterday, he pointed out that in his first week in office he made two tax-cutting announcements. But he refused to oblige her by ruling out tax rises in the budget.
Today the Resolution Foundation thinktank (whose former chief executive, Torsten Bell, is now a Treasury minister) has published a report saying that, if Burnham wants to raise defence spending, as he proposes, taxes will probably have to rise for ordinary workers. It says:
International data shows that the rise in employer national insurance contributions (NICs) last year and frozen tax thresholds in the UK have led to the largest annual rise in taxes on average workers across 33 comparable OECD rich countries. Strikingly, however, this was from a very low base – lower than the US, for example. The UK remains in the bottom third of such countries for the level of tax on an average worker, and the effective tax rate on a typical earner is still lower than it was before the financial crisis. Indeed, no country raises more in total tax as a proportion of GDP without also asking more of single average earners.
This analysis strongly suggests that any politician promising a bigger state and lower taxes on middle earners is not being realistic. So if we want to increase defence spending, then there is a clear case for paying for this through broad-based tax rises that include typical earners paying more.
With all this on the table, PMQs is likely to be dominated by questions about tax and borrowing.
Here is the agenda for the day.
9.15am: Michael Shanks, the energy minister, Ofgem officials and other energy experts give evidence to the Commons energy committee about the electricity market.
9.30am: Stephen Timms, the social security and disability minister, gives evidence to the Commons work and pensions committee.
Morning: Rhun ap Iorwerth, the Welsh first minister, holds a press conference in Cardiff ahead of the start of the Senedd year.
Noon: Andy Burnham faces Kemi Badenoch at PMQs.
After 12.30pm: MPs debate the remaining stages of the representation of the people bill.
Afternoon: Nigel Farage, the Reform UK leader, is doing an interview with Chris Mason, the BBC’s political editor, ahead of the party’s conference that starts on Friday.
I’m afraid we are no longer able to have comments open below the line every day on this blog. If you want to contact me, please email politics.live@theguardian.com. You can use this email to flag up corrections, comments for publication, questions or complaints.
