Early evening summary
- Rishi Sunak, the chancellor, has told MPs that he announced a cut in income tax two years early to help the Treasury resist pressure for an increase in public spending. He said public spending was going up in this parliament anyway. Asked why he had announced a tax cut for 2024, when there was so much uncertainty about the public finances, he said:
I think it’s good to give people a sense of direction, a plan for where we’re trying to head. Also, I think that by doing that it’s also helpful because it creates a discipline, which is very beneficial ... Now having something very clearly to aim for means that I think, hopefully, we can have a more disciplined conversation about incremental public spending from this point, which is already at very high levels.
But one Labour MP, Siobhan McDonagh, suggested to Sunak that he was assuming voters were stupid if he did not realise that they would see this as a transparent election ploy. (See 4.01pm.)
- Sunak refused to accept an assessement from the Office for Budget Responsibility that Brexit has led to a 15% drop in trade. When first asked about the analysis, published in the OBR report last week, Sunak said:
It’s quite hard to disentangle the various impacts of the pandemic, but also the change in our trading relationship with the EU. The data is actually a bit imperfect.
When pressed a second time on the OBR analysis, and asked if the fact that UK trade intensity has stayed down since the pandemic, while it has bounced back in other G7 countries, implied Brexit was the crucial factor, he replied:
It might well be. I’m just saying it is too early to be definitive.
I haven’t got all the numbers in front of me but when I was looking at this a couple of weeks ago, if you look at UK/EU and UK/rest of world imports and exports, there are a range of different things moving on. They’re not actually all consistent with themselves. So we are still trying to work through what the impacts are.
But he claimed some change was always expected. He said:
It was always inevitable that there would be a change in our trade intensity with Europe as a result of the change in the trading relationship. That was expected, and unsurprising when you change a trading relationship.
Sunak also claimed trade intensity was falling anyway, because of the desire to onshore supply chains after the pandemic, for example. And he said “the benefits of new trading relationships take time”.
Asked if he would be surprised if Brexit did lead to a permanent fall in trade, Sunak sidestepped the question, but said he would be happy to discuss it on a future occasion.
- Sunak insisted that he was not blocking the publication of the government’s energy security strategy. Asked about reports claiming that his objections had led to it not being published this week, as planned, he said:
I’m certainly not blocking anything and the prime minister continues to work through the details of that. Given how important it is, I think it’s important that we get it right. It will impact lots of different things and it’s being worked on at pace between all the relevant ministers.
- P&O Ferries has “one last opportunity” to U-turn on the sacking of 800 crew and must lift this week’s deadline for the employees to sign redundancy and non-disclosure agreements, the government has warned.
- Leading refugee charities have called on the UK government to scrap visa requirements for Ukrainian refugees, amid mounting anger about the government’s slow progress in issuing paperwork to people fleeing a war zone.
- Ministers are to launch a new national behaviour survey as part of its plans to improve standards and lift attainment in schools in England. As Sally Weale reports, it is one of a package of measures outlined in a schools white paper unveiled on Monday, which also includes ambitious new attainment targets for all primary and secondary pupils across the country.
Updated
Liz Truss, the foreign secretary, has told MPs that any settlement in Ukraine must included “a clear sanctions snap-back which will be triggered automatically by any Russian aggression”. In a statement to MPs, she said the west must maintain a tough approach to President Putin. She said:
Strength is the only thing Putin understands. Our sanctions are pushing back the Russian economy by years and we owe it to the brave Ukrainians to keep up our tough approach to get peace.
We owe it ourselves to stand with them for the cause of freedom and democracy in Europe and across the world. It is vital we step up this pressure, we cannot wait for more appalling atrocities to be committed in Ukraine.
Here are two leading Brexit commentators on Rishi Sunak’s claim that it is hard to tell what impact Brexit has had on UK trade.
From Chris Grey, an academic and author of Brexit Unfolded:
Before Brexit we were told warnings were Project Fear and anyway you can't predict the future.
— Chris Grey 🇺🇦 (@chrisgreybrexit) March 28, 2022
Now we're told there was bound to be an impact but you can't disentangle it from other factors.
If both are accepted then, handily, it leaves no point at which Brexit can be judged. https://t.co/rBQ5yYISDw
From David Henig, a former civil servant and co-founder of the UK Trade Forum:
This is where international comparisons help. And do not paint a pretty picture for the UK. Also basic economics, more trade barriers, less trade.
— David Henig 🇺🇦 (@DavidHenigUK) March 28, 2022
Same covid, only one government chose to put up huge trade barriers to neighbours at its height. https://t.co/pcX2D3OiqP
Updated
Angela Eagle (Lab) asks about the FT story saying Sunak is holding up the publication of the government’s energy security strategy. (See 8.56am.)
Sunak says he is not blocking anything. He says they are still working through the details. “It is important that we get it right,” he says.
And that’s it. The hearing is over.
I will post a summary soon.
Sunak challenged over figures showing student loan repayment reforms will penalise northern graduates
Back at the Treasury committee Emma Hardy (Lab) is asking about the changes to the graduate loan replayment scheme. She says a graduate staying in a city like Hull, which she represents, will lose out disproportionately.
(This is something the government’s own equality impact assessment of the plans confirms. It says: “Alongside younger and female borrowers, those likely to see some negative impact with increased lifetime repayments under the reforms for both post-2012 and new borrowers are more likely than average to have characteristics of white or black ethnicity, from disadvantaged backgrounds, or reside in the north, midlands, south-west or Yorkshire and the Humber.”)
Sunak says very low earners will not have to repay their loans.
But he says it is reasonable that people who benefit from going to university should pay. He says earlier in the session they were talking about benefit claimants. Why should they pay for graduates to go to university?
Q: But a graduate in Hull, on an average salary of £26,000, will lose out more than a graduate in London.
Sunak says no one will pay back more than they borrowed. He offers to write to Hardy about this.
Q: Under the current system many people never repay their loans. Only those with big salaries pay off their entire loans. Now the high earners will pay less, and people on moderate salaries will pay more.
Sunak repeats his claim that the move is progressive. He says it is reasonable for people to go to university to be expected to pay.
Hardy says this is “effectively a tax on lower earning graduates”. When you said you were implementing the biggest tax cut for a quarter of a century, were you including this.
Sunak says he wasn’t, because this isn’t a tax.
Hardy says this is a significant revenue raiser.
Sunak says this is accrual accounting. It is not money that can be spent now.
Hardy says if you are a graduate in the north, you will be paying more. If you are a graduate in London, you will be paying less. That does not seem fair, she says.
Sunak says it may be better for the education department to answer these questions.
Updated
In the Commons chamber Robert Courts, the transport minister, responded to the Labour urgent question earlier about P&O Ferries. In his opening statement he echoed what Grant Shapps said about the government’s legislative plans in his letter to the company today (see 12.59pm), but did not add further details. He said:
We will return to this house to announce a package of measures that will ensure that the outcomes P&O Ferries are seeking to achieve during this disastrous move to pay less than the minimum wage cannot be seen through. As a result, they will have no reason left not to reconsider this move.
Louise Haigh, the shadow transport secretary, asked why the company was not already facing prosecution, and why its chief executive, Peter Hebblethwaite, being struck off as a director. Courts replied:
[She’s) quite right that P&O must face the consequences for their actions. We are looking at every tool that is available to the government, we’re doing that as fast as is humanly possible.
Mel Stride (Con) is picking Sunak up on what he said about Brexit. (See 4.19pm.)
"It was always inevitable if you change the exact nature of your trading relationship with the EU, that was always going to have an impact on trade flows," says @RishiSunak
— George Parker (@GeorgeWParker) March 28, 2022
Stride refers to the chart in the OBR report. The UK has seen trade intensity fall, while other G7 countries have seen it rise again. Does that not tell you that Brexit must be the factor?
Sunak says: “It may well be.” But he says it is too early to make a judgement. He says he looked at this a few weeks ago, and thought various factors were in play.
Q: We are becoming a more closed economy because of Brexit?
Sunak says he does not think that is because of Brexit.
He says there may be other reasons why economies are becoming more closed. Because of the pandemic, countries have wanted to become less reliant on supply chains.
He says the government wants to make the economy open to trade.
And he says it was always going to take time for the benefits of new trading relationships to appear.
Q: So if in the future it becomes clear Brexit has reduced trade, would that surprise you, as a supporter of Brexit?
Sunak sidesteps the question. He says he does not have the figures in his head. But he offers to return to the committee to discuss this again.
Updated
Sunak plays down OBR analysis that Brexit bad for UK trade, claiming Covid makes data hard to interpret
Q: Why is our trade intensity down so much? Is is Brexit or something else?
Sunak says it is hard to “disentangle” the impact of the pandemic from the impact of Brexit. He says the data is imperfect. He says it was obvious that changing the trade relationship with the EU was going to have an impact. But he says it will be hard until we are “through all this” to disaggregate the various factors at play.
It is worth pointing out that the Office for Budget Responsibility does seem to find it possible to make a judgment about the impact of Brexit. It says:
Our forecast continues to assume that leaving the EU will result in the UK’s total imports and exports being 15% lower than had the UK remained a member state. This fall in the trade intensity of UK output is likely to reduce the level of potential productivity, though the size of this effect is uncertain; we assume productivity is ultimately 4% lower after a 15-year period.
Updated
Kevin Hollinrake (Con) goes next.
Q: Why can’t we just keep borrowing? Interest rates are low. That way we could restart the economy?
Sunak says when he became chancellor people made that argument. He did not agree, and he says he thinks he has been vindicated. He says the government is now to spend more than £80bn on interest payments. A 1% increase in interest rates can add £20bn to government costs.
'Do you think people are stupid?' - MPs challenge Sunak over why income tax cut planned for election year
Q: Why are you cutting income tax in 2024? Is it good to determine tax cuts in line with the election cycle?
Sunak repeats his point about wanting to show the “direction of travel”. The tax cut will be delivered at a time when the government will be meeting its fiscal rules, and when inflation should have abated. It is not uncommon for chancellors to announce things a year or more in advance.
McDonagh hits back.
Do you think people are stupid? Do you think people won’t see through this?
Sunak says he thinks people will see the government is committed to cutting taxes over time.
Siobhain McDonagh (Lab) asks Sunak if he is a “fiscal illusionist”, which is the term the Institute for Fiscal Studies used to describe him.
Sunak asks McDonagh to explain. She argues that most people are not gaining. Sunak says she has not acknowledged the factors affecting his decision, like the pandemic and the Ukraine war.
Q: No other country in the G7 is putting taxes up. You are increasing the gap between earned and unearned income. Everyone on less than £34,000 will be worse off.
Sunak says 70% of people will be better off now the national insurance threshold has gone up, even allowing for the fact that the rate of national insurance has gone up.
Q: People using heating oil or LPG will not benefit from the energy cap.
Sunak accepts that. But he says they will benefit from the council tax refund. And he says the energy bills discount [or loan] applies to electricity bills, not gas bills, so people in these groups benefit.
Q: Standing charges for electricity bills vary widely across the country. Why is the scheme not addressing this?
Sunak says his scheme will help tens of millions of people across the country.
Q: The weather is not the same across the country, is it?
No, says Sunak. But he says cold weather payments are available to help people in particularly cold areas.
Updated
Sunak says it is wrong to describe £200 energy payment, which has to be repaid, as loan
Alison Thewliss, the SNP’s Treasury spokesperson, goes next.
Q: How will the VAT cut on energy saving measures help people who cannot afford solar panels?
Sunak concedes that some people cannot afford solar panels. But the government is already helping people directly make their homes more energy efficient.
Q: How will people using pre-payment metres be able to get the energy bill rebate?
Sunak says there are mechanisms in place to make sure they get the money. He says the business department is in the lead on this.
Dan York-Smith, director of planning, strategy and budget at the Treasury, says the details will be published in the summer.
Q: You cannot opt out of this £200 “rebate”. So people are being forced to take on more debt?
Sunak does not accept that. He says it is not a debt. There is no interest, and it will not accept someone’s credit rating. He suggests Thewliss’s language may alarm people. “Describing it as a loan is wrong,” he says. It is a means of spreading the cost of this year’s increase.
Thewliss says the government is forcing people to take something that it thinks will be good for them.
Sunak says, instead of asking people to pay £200 this year, it is allowing people to pay it over five years.
He suggests Thewliss would rather increase borrowing. But he does not think that is responsible, he says.
Q: In what sense is the health and social care levy hypothecated?
Sunak says the health budget takes account of that money coming in. But it is not formally hypothecated, he confirms. He says it would not be right of the health budget to fall if the levy raised less money than expected.
Sunak says most of benefit of scraping NI hike would have gone to top 15% of earners
Anthony Browne (Con) goes next.
Q: Why did you decide not to scrap the health and social care levy?
Sunak says he thought it was right to have a dedicated funding stream for health and social care. And it is a progressive measure, he says.
If he had scrapped it, most of the benefit would have gone to the top 15% of taxpayers, he says.
Q: Why is it important to have the national insurance threshold at the same level as the income tax threshold?
Sunak says that was a manifesto commitment. He says it simplifies the system.
Q: Why has the National Crime Agency’s budget been cut by 4.5%
Sunak says he does not think it has been cut. He says some agencies are getting more money for enforcement. They are trying to work out where it is best spent, he says.
Eagle says the Treasury’s record on fraud has been “anaemic” and “complacent”.
Sunak does not accept that.
He says, when the bounce-back loans were announced, they expected 60% of them to be lost. But 80% are now performing well, he says.
Updated
Sunak says the tax burden is rising because the government is investing strongly in public services, while the government recovers from a once-in-300-year shock.
Q: But you say you are a tax cutting chancellor?
Sunak says he has not said that. But he has said that, going ahead, his priority is to reduce taxes.
Q: The NAO says between £12.4bn and £20bn has been wasted in emergency Covid schemes. The Treasury is complacent about fraud, isn’t it?
Sunak does not accept that. During the pandemic the priority was to get support where it was needed.
He could have put in more fraud checks. But it would have taken “weeks and weeks and weeks” to get money out to people. At the time businesses were saying they need money within hours to avoid laying people off.
He says they are still pursuing fraud. They will get fraud levels down to levels that are acceptable, he says.
Dozens of people have been arrested, he says.
Updated
Angela Eagle (Lab) is asking the questions now. She asks about help for people with living standards.
Sunak says it is hard to know what will happen to energy prices in the autumn.
Q: You have chosen to put 1.3 million people into absolute poverty.
Sunak does not accept that. He says he has chosen to help people, reducing by a third the impact of rising prices. But prices are a factor outside his control.
He accepts that choices are made. He suggests Eagle would have made a different choice, choosing not to help 30 million people by cutting their taxes.
He says he is is trying to adopt a responsible approach to borrowing, while providing support fairly. He says he does not think extra borrowing would have been responsible. That would have been inflationary, he says.
Sunak says he chose to prioritise lifting NI threshold over increasing benefits by more because other measures in place for claimants
Q: Did you think about uprating benefits by a more up-to-date inflation figure?
Sunak says there are operational factors. He says it takes time to uprate benefits. And one system can only be uprated once a year.
But he also says this would have required more borrowing. And he says he did not want an irresponsible approach to borrowing.
Q: But you chose to lower taxes.
Sunak says the income tax cut applies in a different year.
Q: The national insurance threshold rise is going up.
Sunak accepts that another chancellor might have raised benefits instead of cutting national insurance.
But he says he took the view that other measures were in place to help people on benefits.
And he says, overall, the measures are progressive.
UPDATE: This is from the i’s Paul Waugh.
.@RishiSunak told @CommonsTreasury it's not possible to uprate Universal Credit quickly, saying it takes 4 to 5 months.
— Paul Waugh (@paulwaugh) March 28, 2022
But when he last changed Universal Credit on Oct 28 it had implementation date of Dec 1, which was eventually brought forward to Nov 24. Less than a month.
Updated
Mel Stride (Con), the committee chair, says he accepts “most” of what Sunak said about his measure being progressive.
But what was in the spring statement for people not working, he asks.
Sunak says most people on universal credit are in work, or can work.
For people who cannot work, there was an extra £500m in the household support fund.
Q: The OBR said that uprating benefits in line with the present rate of inflation would cost £11bn. So £500m is a small amount.
Sunak says there are other measures too. The local housing allowance has gone up, and that is worth £600 to 1.5 million people.
There is help with council tax payments.
And the energy measures disproportionally help low-income households, he says.
But Stride repeats his point – he says the low-income group are getting less help.
Sunak says these are all choices. He chose to help people with fuel duty, and to cut income tax.
Updated
Sunak says he's 'very confident' his tax measures are progressive
Sunak says the tax burden is going up because public spending is going up.
“We have not gone down the route of austerity,” he says.
They could have scaled back on investment. But instead they chose to raise the money to fund this spending.
As for whether individual measures are progressive, he says he is “very confident” they are.
To deal with Covid, he put up corporation tax, with the largest companies paying more. And he froze the income tax personal allowances, which many people recommended as a progressive way to raise money. It raises the most money from high earners.
Addressing the health and social care levy, he says he could have used VAT, income tax or national insurance. VAT would be regressive, so he ruled that out. Income tax was potentially more progressive than national insurance. But there were problems with it, like it not being a UK tax any more. And no one can say national insurance is not progressive, he says.
And, turning to last week’s tax cut (the national insurance threshold increase), this was described by the IFS as the best way to help low and middle earners. So that was a progressive way to reward work through the tax system.
And he says last October the universal credit taper rate was cut. That helped the lowest earners, he says.
Updated
Sunak tells MPs announcing income tax cut early will help Treasury resist pressure for higher spending
Rishi Sunak, the chancellor, is being questioned by the Commons Treasury committee.
Q: Why did you announce an income tax cut for 2024 now, when there is so much uncertainty about the forecasts?
Sunak says he set out the direction of travel in the autumn; he said in future he wanted to cut taxes.
He says he wanted to give people a sense of direction.
And this was also helpful “because it creates a discipline”, he says.
He says this would help when he came under pressure to increase public spending.
Q: So this will make it easier for you to resist pressure to increase public spending.
Sunak says that’s a “fair summary” – although he says public spending is already due to increase in this parliament, in real terms.
Updated
P&O Ferries should lose its licence to operate and its chief executive should be struck off as company director, say MPs
P&O Ferries should lose its licence to operate in the UK and its chief executive, Peter Hebblethwaite, should be struck off as a company director, according to MPs.
These are two of the recommendations put to government by Huw Merriman (Con) and Darren Jones (Lab), who are the respective chair of the Commons transport committee and the Commons business committee. They have written to ministers with a series of immediate recommendations after the two committee took evidence on the P&O Ferries’ sudden sacking of 800 workers in a long, joint session last week.
Here is an extract.
P&O Ferries broke the law; it or other companies may do so again. P&O Ferries chief executive Peter Hebblethwaite told us that “there is absolutely no doubt that we were required to consult with the unions. We chose not to do so”. The government should prosecute P&O Ferries and remove its licence to operate in the UK ...
Hebblethwaite flaunted his contempt for the law. He is not a fit and proper person to run a company that operates critical national infrastructure. He must resign and be struck off as a company director.
At the launch of the schools white paper this morning Nadhim Zahawi, the education secretary, said he wants to “spread the DNA” of grammar schools through the education system. When asked whether he would be open to the creation of new grammar schools, he replied:
We’ve got 165 grammar schools. Their ethos is fantastic; their DNA I want to spread in the system. Many of them have already joined us on this journey, many are already in high-performing multi-academy trusts. We will continue to make sure that they feel that they can join that journey and be protected as well.
Cressida Dick to leave Met police earlier than planned, says Priti Patel
The Metropolitan police commissioner, Dame Cressida Dick, will leave her job in April, months before her replacement is named, the home secretary has confirmed.
In his letter to P&O Ferries (see 12.59pm) Grant Shapps, the transport secretary, highlights two aspects of the legislation the government intends to pass to target the company. He says a law will stop it paying workers less than the minimum wage – a measure that would jeopardise the new crewing model that the company is implementing.
More cryptically, Shapps suggests the government will legislate to stop firms ignoring the rules about consulting workers about redundancies. He says he wants to leave P&O Ferries “with little choice but to reverse your decision”, although it is not clear how this might happen because the firm has already exploited loophole the government wants to close.
ITV’s Anushka Asthana says the plan is to make it harder for P&O Ferries to benefit from its tactics.
Grant Shapps calls on P&O to reverse decision & give 800 workers jobs back or promises to block the move. Sources tell me they can’t make it unlawful retrospectively (loophole lets companies pay compensation for failure to consult) bt can make it harder for p&o to benefit from it https://t.co/jWPP812K20
— Anushka Asthana (@AnushkaAsthana) March 28, 2022
Updated
Summary of Downing Street lobby briefing
And here is a full summary of the lines from the Downing Street lobby briefing.
- No 10 confirmed that the publication of the government’s energy security strategy has been delayed. (See 12.24pm.)
- The PM’s spokesperson said it was for Ukraine to decide any conditions for a peace deal with Russia. Asked if the PM backed President Zelenskiy, who has indicated that neutrality could be part of a peace agreement, the spokesperson said:
The prime minister believes that Putin must fail in Ukraine and the sovereignty of Ukraine must be restored. Obviously it would be for President Zelenskiy and the Ukrainian government to decide on the right approach to negotiations. We will support them in that.
But it is not for the UK or any other country to seek to impose its will on the Ukrainian government as to what it should accept in those negotiations.
- The spokesperson did not deny reports that Boris Johnson was opposed to the resumption of fracking. Asked about a claim in the Times (paywall) on Saturday that Johnson was firmly opposed to fracking, the spokesperson said:
What we have said is that there is the moratorium still in place. It’s right given the situation in Ukraine that we consider all our options about how we increase our energy independence and security. And that includes looking at energy, nuclear and domestic gas as well.
In their report Steven Swinford and Ben Webster says Johnson has made his mind up on fracking. They wrote:
The prime minister “does not want fracking anywhere in the country”, despite the government saying it would review the temporary ban, a source said. Johnson is also said to be particularly concerned about the risk of earthquakes.
Only three weeks ago the Telegraph was reporting that Johnson was expressing a renewed interest in fracking. Perhaps, having reconsidered the matter in recent weeks, he has reconfirmed his opposition to it.
- The spokesperson said Johnson believed trans people should be treated with “maximum possible generosity and respect”. Asked if Johnson agreed that a trans woman was a woman, the spokesperson said people had “the ability to change their legal sex and how that’s recorded”. He went on:
When people want to make the transition in their lives, they should be treated with maximum possible generosity and respect. And we have systems in this country that allow it and have done for a long time. We should be very proud of it.
But obviously you made the point about the importance of the basic facts of biology.
The final line is a reference to what Johnson said on this topic at PMQs last week (“when it comes to distinguishing between a man and a woman, the basic facts of biology remain overwhelmingly important”), in an intervention that seemed intended revive this as a “wedge issue” harmful to Labour. Keir Starmer’s answers on this topic on LBC this morning (see 9.37am) shows how hard is is trying not to fall into this trap.
- The UK had granted 21,600 visas to Ukrainians with family links in the UK, the spokesperson said.
- The spokesperson said there were no plans to reconsider the decision to end the end the free provision of Covid lateral flow tests on 1 April.
Updated
Shapps tells P&O Ferries government will pass law intended to outlaw its low-wage restructuring
Grant Shapps, the transport secretary, has released the text of the letter he has sent to the P&O Ferries chief executive, Peter Hebblethwaite, saying the government intends to legislate to stop his company replacing the 800 workers it sacked with crew earning less than the minimum wage.
Last week, at a Commons committee hearing, Hebblethwaite confirmed that the restructuring announced by his firm, which involved seafarers being dismissed without notice, relied on replacement crew working for less than the UK minimum wage (which is allowed in the industry, where employees spent much of their working time outside the UK).
In his letter Shapps says:
On top of reviewing contracts you hold with government and asking the Insolvency Service to investigate your actions, this week I will go further. I will be bringing a comprehensive package of measures to parliament to ensure that seafarers are protected against these types of actions in the way that parliament and this government already intended. Through that package, I intend to block the outcome that P&O Ferries has pursued, including paying workers less than the minimum wage.
With the above in mind, you have one further opportunity to reverse this decision by immediately offering all 800 workers their jobs back on their previous terms, conditions and wages – should they indeed want them back at this stage.
To be clear, our package of measures will prevent the law being broken, even when knowingly attempted. With this point in mind, I would also suggest that the deadlines imposed on seafarers to respond to your redundancy offer by 31st March is dropped. Given that we intend to ensure such outcomes are prevented by laws – which we will ensure that you cannot simply choose to ignore – I believe you will be left with little choice but to reverse your decision in any case.
Last week Hebblethwaite admitted that his company intentionally ignored its legal obligation to consult the workers about the redundancies, deciding that it would be easier to pay them compenstion instead.
My letter to P&O boss makes clear that this government will not stand by while the requirement to treat seafarers with due respect and fairness is brazenly ignored. pic.twitter.com/4ozBsydJPC
— Rt Hon Grant Shapps MP (@grantshapps) March 28, 2022
Updated
There will be an urgent question in the Commons at 3.30pm about P&O Ferries, and the conduct of its chief executive. Labour wants Grant Shapps, the transport secretary, to respond.
After that, at about 4.15pm, Liz Truss, the foreign secretary, will deliver a statement on Ukraine. That will be followed by a statement from Nadhim Zahawi, the education secretary, on the schools white paper at about 5.15pm.
Back at the Commons Treasury committee, asked if the money raised from the health and social care levy will go to health, Andy King, a member of the OBR’s budget responsibility committee, says the chancellor said all the money from the levy would go to health. But he says that it is not hypothecated for health in legislation, and he says health needs a much greater sum than can be raised by the levy.
Downing Street confirms publication of energy security strategy has been delayed
At the Downing Street lobby briefing the PM’s spokesperson did not deny of the FT report saying the publication of the government’s energy security strategy has been delayed. (See 8.56am.) Asked about the report, the spokesperson said:
It is important that we get these things right. It is a significant piece of work that takes time to develop. It is not unusal for a strategy like this to take the right amount of time before being published. We will set out our plans for publication as soon as possible.
Three weeks ago Boris Johnson said the plan would be published “within days”. And last week the government indicated it would be out before the end of the month. Now it is expected next week at the earliest.
Mel Stride (Con), the chair of the committee, asks if it right to say that “those with the broadest shoulders” are paying the most under these tax rises.
Hughes says other bodies are more specialist at doing distributional impact analysis.
But he says that, under the tax rises, more of the tax is being raised from the better off. “The tax changes are progressive in that sense,” he says.
And he says the help with energy bills announced earlier this year involved flat rate payments (a £200 loan, and a £150 council tax discount for most households). Because these are flat rate sums, they will benefit lower-income groups disproportionately, he says.
Updated
Angela Eagle (Lab) says the Resolution Foundation said 1.3 million people would be plunged into absolute poverty under the spring statement measures. She says people like pensioners and carers, who are on benefits or fixed incomes, are likely to lose out disporportionately.
Hughes accepts that. He says people on benefits are “feeling more of a squeeze than people who are managing to get some of their income from earnings”.
Updated
Benefit rises will take 18 months to catch up with inflation, OBR chair tells MPs
At the Commons Treasury committee Richard Hughes, chair of the Office for Budget Responsibility, says that, because benefits are increased in April in line with inflation the previous September, it can take 18 months for benefits to catch up with inflation. He says that is fine when inflation levels are stable. But, because inflation is accelerating at the moment, for the next 18 months benefits will be behind inflation.
This is from Will Jennings, a politics professor, on Keir Starmer’s LBC phone-in this morning. (See 9.28am, 9.30am and 9.37am.)
The main insight from this morning's LBC interview with Starmer is that Labour is going to get hit with a whole bunch of culture war wedge issues in the run-up to the next election. Those issues say a lot more about the distorted concerns of Westminster/media than the country.
— Will Jennings (@drjennings) March 28, 2022
At the Commons Treasury committee Richard Hughes, chair of the Office for Budget Responsibility, has just started giving evidence.
Asked about how much “headroom” Rishi Sunak, the chancellor, had when drawing up his plans, Hughes says strong tax receipts gave him about £35bn in headroom. But the rise in inflation has swallowed up about £20bn of that, he says. Of the remaining £15bn, he says the chancellor has allocated around £10bn for tax cuts, and set aside the rest.
Speaking at the launch of the schools white paper at Monega primary school in Newham, east London, Nadhim Zahawi, the education secretary, said that pupils needing extra help with English or maths would not miss out on other lessons under his plans. Asked if this was a risk, he replied:
They don’t need to. Because we have already learned from the national tutoring programme, where we have done a million blocks of tutoring, that teachers know how to do this well. It’s just never been available to them, it’s only been the luxury of more privileged parents, more fortunate parents.
Teachers know what to do when they see a child falling behind. It’s the analysis first, looking at where the gaps are, communicating with the parents to say ‘this is where we think the gaps are’, and then putting in place additional tutoring, maybe taking a child with them and doing a bit more reading with them, a bit more maths.
Teachers are already doing it, we’re just putting it in place across the country. If we keep it simple, stay focused, it will deliver outstanding results.
Average petrol prices have fallen by 3.7p per litre since the chancellor announced a 5p per litre cut in fuel duty, PA Media reports. PA says:
Figures from data firm Experian Catalist show the average price of a litre of petrol at UK forecourts on March 22 - the day before Rishi Sunak reduced fuel duty - was 167.3p, compared with 163.6p on Sunday.
The average price of diesel fell by 2.4p per litre over the same period, from 179.7p to 177.3p.
A reader has been in touch on Twitter with a question prompted by the opening post. (See 8.56am.)
@AndrewSparrow Reading your recent summary is it fair to say that the ‘war’ between Johnson & Sunak means that no-one is really running the country at present under the default position (chaos) of this Prime Minister?
— Colin A 💙 (@ColSkye) March 28, 2022
I would normally respond on Twitter, but Colin A has given me a chance to plug Peter Hennessy’s new book, A Duty of Care: Britain Before and After Covid. The proper answer to the question is no, because all governments have internal rows about policy, and it would be worrying if they didn’t, because it would mean they were not thinking hard enough about policy alternatives.
But under Boris Johnson chaos has arguably been elevated to a governing principle. Dominic Cummings, his former chief adviser, says Johnson once told him: “I’m quite happy to live with the chaos because then everyone will stick to the king – which is me.”
This comment seems to have driven Hennessy – who as well as being probably the best historian of modern government is also genial and even-tempered – apoplectic. In his book he recalls writing this in his diary on the day he read the interview in which Cummings recalled the Johnson comment:
If DC is to be believed (and No 10 denied all of it), out of the chaotic mind of Johnson has come a new chaos theory of government devoid of any sense of duty to people and country, serving only his grotesque character and overwhelming passion to be number one, the centre of all attention.
When he came to write the book, Hennessy still hadn’t calmed down. “There is no virtue in chaos, even in the most tranquil of times,” he says. “Creating or allowing deliberate chaos in a time of emergency is unforgivable.”
A Duty of Care is short but well worth reading. The first half is a brilliant mini-history of the development of the “duty of care” state. The second half is a personal manifesto about how it could and should evolve – albeit one written more in hope than expectation.
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Grant Shapps, the transport secretary, is to tell P&O Ferries that it should rehire the 800 workers it sacked earlier this month because the government will legislate to stop it replacing them with staff paid below the minimum wage, the Financial Times reports. In their story George Parker and Sylvia Pfeifer report:
Shapps will tell Peter Hebblethwaite, the company’s chief executive, that the legislation, to be outlined this week, will require all ferry companies operating out of UK ports to pay the national minimum wage.
An aide to the transport secretary said Shapps “will tell Hebblethwaite that if he doesn’t perform a U-turn, we will force him to do it anyway. We hope they will see reason and step back. We will make it impossible for ferry companies to operate from UK ports without paying the national minimum wage.”
Nadhim Zahawi, the education secretary, has just published his schools white paper. The full document is here (pdf). Here is the Department for Education’s news release. And here is a blog from the DfE explaining what it will mean for parents and pupils.
The contents have been well trailed in advance. This is from my colleague Rachel Hall for the Observer explaining how Zahawi wants to all schools in England to a offer a minimum school week of 32.5 hours, which most do already.
And this is from my colleague Richard Adams in today’s Guardian explaining how Zahawi wants to allow councils to establish their own academy trusts, and to give schools the opportunity to leave failing ones.
Nadhim Zahawi, the education secretary, was doing the morning interview round on behalf of the government earlier, and on some of the issues of the day his answers sounded much like Keir Starmer’s.
Zahawi also refused to back Joe Biden’s comment at the weekend about not wanting Vladimir Putin to remain in power in Russia. (See 9.11am.) That is not surprising; even the White House has disowned the comment, “clarifying” what Biden meant. Zahawi said it was “up to the Russian people” to decide who their president should be.
Like Starmer (see 9.30am), Zahawi also said he did not approve of hitting people. Asked how he would explain the Will Smith incident if he were a teacher, Zahawi said: “I would say, don’t do it.”
DUP continues to lag well behind Sinn Féin ahead of Stormont elections, latest poll suggests
The Democratic Unionist party decision to pull the first minister from the Stormont assembly and to harden its position on the Brexit Northern Ireland protocol has delivered just a two point increase in support, according to the latest LucidTalk poll.
Sinn Féin is still projected to become the largest single party in Northern Ireland’s assembly elections in May, overtaking the DUP. The new poll for the Belfast Telegraph shows Sinn Féin on 26%, up one point from January, and the DUP which up two points to 19%.
The Alliance party also looks to have gained ground since LucidTalk’s last poll, up two points to 16% and in third place ahead of the Ulster Unionist party which is 13%.
The issue of who will be the first minister has become deeply politicised even though the first and deputy first minister are equal in the power-sharing scenario.
The DUP and the UUP have refused to commit to taking the deputy FM role, underlining the political capital they see in the position.
The LucidPoll shows 64% of unionists and 62% of nationalists say it is very important or important that someone from their side take the first minister role.
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NatWest returns to majority private control as it buys back £1.2bn in shares
NatWest Group has returned to majority private ownership after it agreed to buy back £1.2bn of shares from the UK government, more than 13 years after the company was bailed out by taxpayers at the height of the financial crisis, my colleague Jasper Jolly reports.
Public sector organisations told to review, and if possible cancel, contracts with Russian suppliers
All public sector organisations are being asked to review any contracts they have with Russian or Belarusian companies and, if possible, cancel them. In England guidance on this is being sent out by the Cabinet Office, and in Scotland, Wales and Northern Ireland the devolved government are issuing their own guidance.
Steve Barclay, the Cabinet Office minister, said:
Public money should not fund Putin’s war machine. We are asking hospitals, councils and other organisations across the public sector to urgently look at all the ways they can go further to sever their commercial ties to Russia.
The government will continue to work closely with these organisations, ensuring they are able to take the necessary steps as quickly as possible, including taking legal routes where necessary.
Q: Is it right for trans women to be able to compete in women’s sports?
Starmer says that should be a matter for the sporting authorities.
He says he looked at the Sport England guidelines. He thought they were quite careful.
Q: But, in your book, is Lia Thomas, the US swimmer, a woman?
Starmer says, under the law, if you have gone through a process, you can choose your gender. That has been the case for a decade now.
I spent a lot of my working life dealing with violence against women and girls first-hand, and I know from that experience, just how important it is to fight for women and fight for equality.
We have had legislation in this country which makes it clear that in some circumstances, particularly at the moment under the law when you’ve gone through a process, you can be recognised in the gender of your choosing, that’s been the position for over a decade now ...
He says he thinks the law needs reform.
But I equally - I want to be really clear about this - I am an advocate of safe spaces for women.
Q: So a woman can have a penis?
Starmer does not answer directly. He says:
I don’t think that discussing this issue in this way helps anyone in the long run.
What I want to see is a reform of the law as it is, but I am also an advocate of safe spaces for women and I want to have a discussion that is ... anybody who genuinely wants to find a way through this, I want to discuss that with, and I do find that too many people - in my view - retreat or hold a position of which is intolerant of others.
And that’s not picking on any individual at all, but I don’t like intolerance, I like open discussion.
And that’s it. The phone-in is over.
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Q: If someone insulted my wife, I would hit them, like Will Smith at the Oscars? Would you?
Starmer says insulting a family member arouses strong emotions. But hitting someone is wrong, he says. He says Smith’s response was wrong. And it did not appear to be spontaneous, he says.
UPDATE: Starmer said:
Of course there are circumstances and anybody who insults family members excites something quite emotional in all of us.
But, on the other hand, to go up and hit someone in that way is wrong, I’m afraid. It was the wrong thing to do.
It was at the Oscars, it’s got all the cameras there, millions of people watching.
Starmer also said he was “struck by the fact that it didn’t appear to me to be completely spontaneous” with Smith appearing to walk up to the stage “quite calmly and then hit someone”.
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Q: What would be a red line for you in Ukraine?
Starmer says he is asked this a lot in interviews. He says he does not think it is helpful to be specific about red lines.
Q: Do you think it was right for Prince William to not apologise when he was in Jamaica?
Starmer says he has been to Jamaica many times. He has done work their as a laywer. The connection between the two countries is very deep. But it changes.
He says William and Kate are right to say time changes thinks.
He says he does not want to undermine the Commonwealth. “I love the Commonwealth,” he says. But it needs to change.
Q: How odd was it for them to do a drive-past in a 1950’s open Land Rover?
Starmer says, having said he does not want to criticise, he does not see how that fitted with the rest of their trip.
He says William was right to say there should be a discussion about the future.
Q: Should he have gone further?
Starmer says William may well do in the future. He would like to know more about his thinking. Referrring to reports that William is planning a new approach to criticism of the royal family, Starmer says that sounds like a “big change”.
Q: I have spent eight hours completing visa forms for Ukrainians wanting to come here. What can you do to speed the process up?
Starmer thanks the caller for her generorisity. (She is a host through the Homes for Ukrainians scheme.) He says he has heard many stories like this. People are waiting for no good reason. “This DIY way of doing it isn’t good enough,” he says.
He offers to put the caller in touch with her MP, so they can put some pressure on the system.
Q: You are calling for a windfall tax on energy companies. Wouldn’t it be better to abolish the green levy, and just tell energy companies to spent their own money on renewable investment.
Starmer says Labour wants a windfall tax on oil and gas companies. That would be a tax on profits they did not expect to make. He says he thinks they have said they have “more money than they know what to do with”. That is what should be taxed, he says. He says that could save people £600.
He says he understands the argument about not discouraging investment. But the windfall tax would be on money the energy companies never expected to have, he says.
The first caller is a former Merchant Navy seaman, who recalls that during the Falklands War Merchant Navy seafarers were part of the fleet going to liberate the islands. He asks what should happen to the P&O workers?
Starmer says this is “shocking on so many levels”.
The pre-recorded video shown to workers was shocking.
And then bosses went to parliament and said they knew they were breaking the law. They were showing “contempt”, he says.
He says P&O Ferries should not be allowed to pay people below the minimum wage. He says Labour flagged this up as a problem two years ago. He says Karl Turner, the Labour MP for Hull, has been banging on about this for years. But the government has done nothing.
He says the government has now said it will close the loophole allowing P&O Ferries to do what it did. Labour will support that.
But Starmer says the government should do more to stop DP World being allowed to carry on running freeports.
And he says he wants to know why, when it was warned the night before what was about to happen, the government did not do more.
Starmer says Biden's comment about wanting Putin out of power 'not helpful'
Keir Starmer is hosting. This LBC phone-in.
The presenter, Nick Ferrari, starts by asking about Ukraine.
Starmer says President Biden’s comment at the weekend about not wanting Vladimir Putin to remain in power was “not helpful”.
Not helpful, to say something, to row back - big thing to say, for obvious reasons.
What is happening in the war is “thoroughly depressing”, he says.
He says that the government should have gone further, faster on sanctions. And their policy on refugees has been “completely wrong”, he says.
But he says he has wanted to show that that the UK is united in its support for Ukraine.
Q: Would you host a refugee family?
Starmer does not answer directly, but he says as leader of the opposition there are practical problems. But he says he has been impressed by the generosity of the British people. He says his children are quite young. But they talk about this a lot. They want to play their part, he says.
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Labour MP Dawn Butler diagnosed with breast cancer
The Labour MP Dawn Butler said she has been diagnosed with breast cancer following a routine mammogram. My colleague Kevin Rawlinson has the story here.
And here is Butler’s own statement about her treatement.
My statement following breast cancer diagnosis:https://t.co/1VTQz6WObV (1/2) pic.twitter.com/TPam7sglyX
— Dawn Butler MP✊🏾💙 (@DawnButlerBrent) March 28, 2022
Rishi Sunak accused of delaying energy security strategy ahead of grilling from MPs over spring statement
Good morning. Rishi Sunak, the chancellor, will face the Commons Treasury committee this afternoon where he will take questions on last week’s spring statement, which has been widely criticised by people from all sides of the political spectrum. He will probably also be asked about energy policy, and a report in the Financial Times this morning saying that the government’s energy security strategy is being further delayed because Sunak is reluctant to sign off on a new spending splurge. In its story the FT reports:
Boris Johnson’s promised energy security strategy has been delayed again, as chancellor Rishi Sunak continues to hold out against big new spending commitments.
Sunak, under fierce pressure to do more to help families through the cost of living crisis, has told colleagues he wants to turn off the spending taps and that every “marginal pound” should go towards tax cuts.
His tough stance has put the brakes on the energy strategy, which was originally due for publication last week and then again at the start of this week.
The energy security strategy was due to be published this week, but the FT says it is not expected until a week today at the earliest. The Treasury has not denied the FT story, with a Treasury source telling PA Media: “Policy is still being decided on.”
Here is the agenda for the day.
9am: Keir Starmer hosts his “Call Keir” LBC phone-in.
9.30am: The Department for Education holds a press briefing on the education white paper.
11.30am: Downing Street holds a lobby briefing.
11.35am: Richard Hughes, chair of the Office for Budget Responsibility, and his senior colleagues give evidence to the Commons Treasury committee about the spring statement.
2.30pm: Ben Wallace, the defence secretary, takes questions in the Commons.
2.40pm: Rishi Sunak, the chancellor, gives evidence to the Commons Treasury committee about the spring statement.
4pm: Amanda Pritchard, the NHS England chief executive, and Sir Chris Wormald, permanent secretary at the Department for Health and Social Care, give evidence to the Commons public accounts committee about the vaccine rollout.
4.30pm: Brandon Lewis, the Northern Ireland secretary, gives evidence to the Commons Northern Ireland affairs committee.
I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.
If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.
Alternatively, you can email me at andrew.sparrow@theguardian.com.
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