Afternoon summary
Keir Starmer has said Labour would “level up workers’ rights” in a way not seen for decades. (See 2.51pm.)
MPs have passed unopposed two items of secondary legislation needed to implement the changes to the post-Brexit trading rules for Northern Ireland negotiated by the DUP. No MP voted against either measure even though during the debates some Tory Brexiters expressed concerns about the plans, and the DUP MP Sammy Wilson said that he did not support the deal. They believe it does not do enough to disapply EU law in Northern Ireland. By contact, the SDLP leader Colum Eastwood also said his party did not support the plan – but that is because because they feel it undermines the Good Friday agreement. (See 4.02pm.)
Many unionists still 'deeply worried' about post-Brexit trading rules for Northern Ireland, former DUP deputy leader says
Many unionists are still “deeply worried” about the impact of post-Brexit trading rules on Northern Ireland, despite the changes announced this week, a former deputy leader of the DUP said today.
Nigel Dodds, who sits in the House of Lords, told peers this afternoon:
There are still many unionists who are deeply worried and concerned that the Irish Sea border … still exists, since many goods coming from Great Britain, British goods coming to Northern Ireland, especially in manufacturing, still need to go through full EU compliance checks, procedures.
Dodds was speaking as Lord Caine, a Northern Ireland minister, made a statement about the Strengthening the Union command paper issued this week. Dodds asked him:
Will he also confirm the concern that there is among many unionists – and he knows Northern Ireland very well – at the continued sovereignty, jurisdiction and application of EU laws over large swathes of our economy in 300 areas, to which the Stormont brake doesn’t apply and we cannot make or amend laws within those areas?
Caine replied:
I am sorry to say to him that the government does take a very different view as a result of the deal that has been agreed over the past few days, as indeed I should gently point out does his party leader, who along with the government now accepts that what we have agreed is a firm basis for going back into the institutions and re-establishing the executive and the assembly at Stormont.
We simply don’t recognise that what he describes is anything like a trade border between Great Britain and Northern Ireland. As a result of this deal the number of goods that will pass through into Northern Ireland without checks will be significantly increased.
While Labour was holding a major business conference today, Rishi Sunak was holding an event in Downing Street to launch Help to Grow, a scheme offering “one-stop shop” support and advice to small firms. Sunak said: “I come from a small business family, so I’ve got enormous respect for anyone who has taken that entrepreneurial plunge and has that entrepreneurial drive.”
Updated
Heaton-Harris rejects claims DUP deal has undermined Good Friday agreement as MPs back new laws
MPs have now approved the second set of regulations needed to implement the reforms in the Safeguarding the Union report published yesterday. These were regulations relating to the UK’s internal markets.
Here are some of the main points from the debates.
Colum Eastwood, the SDLP leader, claimed that the document published yesterday undermined the Good Friday agreement. The document says the government will “never be neutral” on the union. Eastwood suggested this contradicted a famous declaration in 1990 by Peter Brooke, the then Northern Ireland secretary, that helped to pave the way for the IRA ceasefire and the peace process talks. Eastwood asked Chris Heaton-Harris, the Northern Ireland secretary:
Peter Brooke once said that Britain had no selfish or strategic interest in Northern Ireland, and that was later repeated in the Downing Street declaration. Reading the command paper it would seem to me that this government has moved from that position and I think undermines the Good Friday agreement. It seems that they … have moved away from the principle of rigorous impartiality.
Does the secretary of state agree with Peter Brooke’s assertion and the Downing Street declaration? Or is he moving to a different place?
In response, Heaton-Harris said he agreed with what Brooke said. And he said the government was committed to the Good Friday agreement, which says that Irish reunification can happen with the consent of the people of Northern Ireland.
Heaton-Harris confirmed the government wants to legislate to avoid regulatory divergence between Great Britain and Northern Ireland on veterinary medicines. He said the government needed to find a solution because the grace period, where the post-Brexit rules don’t apply, is due to end.
Hilary Benn, the shadow Northern Ireland secretary, said Labour wanted to “negotiate an SPS [sanitary and phytosanitary] agreement with the EU, with the intention of removing checks on animals, food and plants, not only between GB and NI, but between the whole of the UK and the EU, which would of course benefit farmers, food businesses and the horticultural industry in Northern Ireland and the rest of the United Kingdom”.
Eastwood complained that the process leading up to yesterday’s paper implied the government only cared about the DUP. “It has to be understood that there are more people in Northern Ireland than just the DUP and just unionism,” he said.
And Eastwood said his party did not support the plan. He said:
We think it has moved far beyond the principles set out in the Good Friday agreement, it is undermining north-south cooperation, and it’s far too much focused on east-west.
Moving on from this point, we need to ensure that any future negotiation is done with all parties and both governments so everybody can feel comfortable with the result.
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Being PM is like being national football coach, says Blair, as he reveals he's publishing how to guide to governing
Tony Blair has written a guide to political leadership “for the busy, aspiring leader”, to be published later this year, PA Media reports. PA says:
The former prime minister uses examples from political systems around the world for a manual that he would have wanted in 1997 when New Labour swept to power, according to publisher Hutchinson Heinemann.
The book shares insights from his personal experience and from observing other world leaders at first hand, while he was in office and since leaving Downing Street.
Blair said: “Governing a country is in one sense a little like being the national football coach of a football-crazy nation. Everyone has an opinion. Everyone thinks they can do it and do it better than you.
“The role of leader is a privilege, of course, but a privilege that is painful. The most painful part? To get things done.
“You arrive in power as the great persuader. You govern as the CEO. Persuasion is about talking. Governing is about doing.
“The good news is that there is a wealth of experience and examples, good and bad, to follow or to learn from.
“This book is not an academic work or designed to be comprehensive. It’s a short guide to governing for the busy, aspiring leader.”
Hutchinson Heinemann will publish the book in physical, ebook and audio editions in the UK in September.
Post-Brexit food labelling rules to appease DUP will lead to higher prices, says industry
Forcing all UK supermarkets to put “not for EU” labels on meat, dairy and plant products in a move to assuage the concerns of unionists in Northern Ireland will force up prices and increase inflation, ministers have been told. Daniel Boffey has the story here.
This is from the Economist’s Matthew Holehouse on Keir Starmer’s pitch to business leaders.
Pretty clear from Labour’s business conference that Starmer has left zero room for a u-turn on planning reform. Pretty much central to the pitch.
— Matthew Holehouse (@mattholehouse) February 1, 2024
Photograph: Dan Kitwood/Getty Images
Starmer says Labour would 'level up workers' rights in way not attempted for decades'
And here are the main lines from Keir Starmer’s speech to the Labour business conference.
Starmer said Labour would “level up workers’ rights” in a way not seen for decades. And he insisted that this would be good for economic growth. He said:
I want to be crystal clear about this, we are going to level up workers’ rights in a way that has not been attempted for decades.
And that might not please everyone in the room or the wider business community.
But nobody can doubt that our labour market is at the heart of our challenges on productivity, a clear reason why the wealth we create fails to generate economic security.
That’s not just an argument about social justice, it’s also about growth.
Because the growth we need cannot come from driving down the terms and conditions of the British people, that is not a pathway to sustained productivity improvement.
In fact, if anything, it distorts our economy with perverse incentives on things like investment in technology.
I accept this may be a challenge for some businesses.
Starmer was referring to plans set out in Labour’s new deal for working people.
He said he believed business serves the national interest, not just the interests of shareholders. He said:
I also know that the caricature that British business only serves the shareholder interest is lazy and out of date.
In fact, one of the things I draw great hope from is the determination I see, from the countless business leaders I’ve met, to serve the national interest.
A pride, not just in the contribution you already make, but what else you could achieve if you had a government that matched your ambition.
That’s why, as we’ve drawn up our plans for Britain. We haven’t just opened our doors, we’ve taken decisions together as equal partners in the venture of national renewal. Your fingerprints – on every one of our five missions.
He said the turnout at the event showed how much the party had changed. He said:
Let’s imagine that you were invited to an event like this, a Labour business conference, before any of the changes to our party had taken place.
The question is: would you go?
Would you, as a wealth creator, feel that your ambition, the vital role you play in our economy, commanded the respect it deserves?
As Lizzy Buchan from the Mirror reports, someone shouted “no”.
Keir Starmer asks an audience of business leaders if they would have come to a Labour business conference in 2019.
— Lizzy Buchan (@LizzyBuchan) February 1, 2024
“No,” shouts an audience member.
Starmer jokes there is no audience participation - and tells people to “put your glitter away” pic.twitter.com/RT8e8UVR86
He said Labour had to be a party of business because “private enterprise is how we pay our way in the world”.
Updated
Keir Starmer has just finished his speech to Labour’s business conference. As LabourList reports, he told the audience he wanted to level up workers’ rights.
💷NEW: Starmer tells Labour's business conf he wants to "make work pay" and level up workers' rights in a way "not attempted for decades", even if it may not "please everyone in this room".
— LabourList (@LabourList) February 1, 2024
But Labour will work with business on it, and provide stability:https://t.co/Tu5J0FHZUz
NEW: Starmer tells Labour’s business conf he wants to “make work pay” and level up workers’ rights in a way “not attempted for decades”, even if it may not “please everyone in this room”.
But Labour will work with business on it, and provide stability
Updated
Yousaf defends Sturgeon over her handling of Covid crisis
Humza Yousaf, Scotland’s first minister, defended Nicola Sturgeon’s handling of the Covid crisis at FMQs in Holyrood today.
Sturgeon, his predecessor, had a difficult day giving evidence to the Covid inquiry yesterday, and this morning Alister Jack, the Scottish secretary, told the inquiry that he did not believe she had been telling the truth when she said she was not seeking political advantage in her handling of the crisis. (See 12.37pm.)
Referring to his predecessor, Yousaf told MSPs:
When it comes to steering this country through some of its darkest days, I am very pleased we had Nicola Sturgeon in charge here of the Scottish government as opposed to Boris Johnson. On the big calls, many of the decisions we made helped to save lives.
Yousaf said he accepted that there may have been times when Scottish ministers “could have perhaps moved quicker, or moved earlier, or done thing differently”.
But he added:
Our political opponents may well try to rewrite history and engage in smears and insults.
I can stand up here and say I know that every single day of that pandemic, Nicola Sturgeon, the rest of us in the Scottish government, civil service included, worked for one reason and one reason only: to protect the people of Scotland from the harms of Covid.
And here is Severin Carrell’s story about Alister Jack’s evidence to the Covid inquiry in Edinburgh today.
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In the Commons MPs have just approved the new regulations relating to the Windsor framework, implementing proposals in the Safeguarding the Union document published yesterday. The regulations were approved by acclamation, with no one trying to vote against.
Proposing the regulations, Chris Heaton-Harris, the Northern Ireland secretary, said:
This package will safeguard and durably strengthen Northern Ireland’s integral place in the Union and the UK’s internal market, and do so by placing commitments in that package into law.
In an interview with LBC’s James O’Brien, the Liberal Democrat leader Ed Davey said that he should have apologised to Post Office Horizon victims earlier. Davey has now said sorry in an article published in the Guardian. (See 11.39am.) Asked why he did not do that earlier, Davey replied:
I said very early on that I regretted it. I probably should have said much earlier, I accept that … I felt it and I don’t know why. I just probably should have said. I was saying regret and I felt that was getting over that point, but yeah, I probably should [have said] sorry earlier.
Penny Mordaunt, the leader of the Commons, has criticised the Welsh government’s plan to increase the size of the Senedd (the Welsh parliament).
As PA Media reports, legislation tabled by the Labour-run Welsh government, as part of its cooperation agreement with Plaid Cymru, seeks to increase the number of Senedd members from 60 to 96 while also making the way they are elected more proportional.
Speaking during business questions this morning, Mordaunt said she was “shocked” by the plans. She said an equivalent move for the UK parliament on the same constituent-to-politician ratio would result in an increase from 650 MPs to 2,058.
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Business welcomes Labour's plan for 'roadmap for business taxation' and pledge to cap corporation tax
The British Chambers of Commerce has welcomed the announcement from Rachel Reeves, the shadow chancellor, in her speech today that Labour would set up a roadmap for business taxes.
Reeves told the business conference this morning:
Within its first six months, an incoming Labour government will publish a roadmap for business taxation, setting out our plans on business tax over the duration of the parliament.
Shevaun Haviland, the director general of the BCC, said:
We welcome today’s announcement from the shadow chancellor that she will publish a tax roadmap for business, if Labour wins power. It would help ensure simplicity, proportionality and certainty for future business planning. Any roadmap would also need to highlight how the tax burden for UK firms could be streamlined and be as fair as possible.
Haviland said the BCC also welcomed the decision to cap corporation tax at 25%. She said:
Businesses will also welcome a cap of 25% corporation tax over the life of the next parliament. This commitment will give both UK firms and global companies looking to invest here the confidence to help the economy get back to sustainable growth.
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Tax Justice UK, which campaigns for a fairer and more effective tax system, has criticised Labour for ruling out an increase in corporation tax. (See 10.51am.) In a statement on Rachel Reeves’ announcement, Robert Palmer, its executive director, said:
The shadow chancellor is at risk of backing a future Labour government into a corner with the latest announcement ruling out a corporation tax rise.
Simply put, schools are crumbling, hospitals and GP surgeries are creaking under the strain and councils are going bust.
While plans to crack down on tax avoidance and windfall tax loopholes are welcome, alone, they aren’t enough.
Reeves needs to support sensible and credible ways of generating revenue, like keeping open fair tax rises on company profits, to sort out the mess that Britain is in.
Threats and attacks directed at MPs like Mike Freer 'an attack on democracy', says No 10
Downing Street has described the threats and abuse directed at the Conservative minister Mike Freer, leading him to announce that he will quit parliament at the election, as “an attack on British democracy”.
Asked to comment on Freer’s announcement, the PM’s spokesperson told journalists at the No 10 lobby briefing:
The prime minister is extremely saddened that Mr Freer has faced such vitriolic hatred that he feels he’s no longer able to serve his local community.
The prime minister believes that serving and representing your community is a unique privilege and making a difference to people’s lives is the most rewarding job you can do. No elected representative deserves to be abused or intimidated and the attacks and abuse that Mike Freer references are clearly deeply distressing. They’re not just an attack on him, but an attack on British democracy.
The prime minister feels that it is important that whilst people are free to debate issues passionately and have robust debate, intimidation [and] abuse is simply unacceptable.
Scotland secretary says he does not believe Sturgeon's claim she did not use Covid crisis to push case of independence
Alister Jack, the Scotland secretary, has told the UK Covid inquiry that he did not believe Nicola Sturgeon when she said she did not try to use the Covid crisis to further her campaign for independence.
In evidence to the inquiry yesterday, the former SNP first minister became emotional as she strongly rejected claims that she sought to exploit the crisis for political gain. Sturgeon insisted:
I will carry regret at the decisions and judgments I got wrong, but I will always know in my heart, and in my soul, that my instincts and my motivation was nothing other than trying to do the best in the face of this pandemic.
But, when asked about this, Jack told the inquiry today:
I watched that evidence from yesterday and I didn’t believe it for a minute.
I think Nicola Sturgeon could cry from one eye if she wanted to.
He also said it was “inevitable there would be tensions” between the Scottish and UK governments given their different political positions on the union. He explained:
The then first minister saw her job as leader of a nationalist government to break up the UK.
Devolution works very well but works very well when both governments want to work together.
But when one government wants to destroy the UK and destroy devolution, then there are tensions.
Those tensions existed before the pandemic, during the pandemic and they exist now today.
Jack also told the inquiry he had deleted all his WhatsApp messages in November 2021 because he wanted to free up data on his phone. He said he did not think he was doing anything wrong at the time, because he did not use WhatsApp to take government decisions.
But he said he accepted now that that was wrong. He told the inquiry:
I think if I could turn the clock back, knowing what I know now, I would have sought a different solution for my lack of storage capacity.
I’m a bit of a luddite – I’m the only member of the cabinet not to have any social media accounts.
But that’s no excuse – I regret that I deleted my entire account.
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Leftwing groups say Labour should prioritise public services instead of capping corporation tax at lowest level in G7
Two leftwing groups have criticised Labour for promising not to put up corporation tax.
Momentum, the organisation originally set up to promote Jeremy Corbyn’s views when he was party leader, has posted messages on X saying this is “bad policy and bad politics”.
The UK has the lowest level of corporation tax in the G7.
— Momentum 🌹 (@PeoplesMomentum) February 1, 2024
Meanwhile, our public services are battered & starved of funds.
Starmer and Reeves' cosying up to big business is bad policy and bad politics. https://t.co/C5Wq69lpst
The UK has the lowest level of corporation tax in the G7.
Meanwhile, our public services are battered & starved of funds.
Starmer and Reeves’ cosying up to big business is bad policy and bad politics.
The Labour Leadership’s priorities are deeply out of touch with the labour movement *and* the public.
Voters want higher wages, more money in public services and free school meals...
... not bungs for bankers & gifts to the City.
We need real Labour values
Momentum also points out that this is a clear breach of one of the “10 pledges” that Keir Starmer made when he was standing for Labour leader in 2020. Those pledges included one saying he would reverse the Tories’ cuts in corporation tax. That implied he would raise it to 28%, the level it was when the Consevatives took office in 2010.
Momentum regularly criticises the Labour leadership, but the announcement has also been denounced today by Compass, the leftwing thinktank and campaign group committed to pluralist politics. Neal Lawson, its director, said:
The UK’s corporation tax rate is already the lowest in the G7. Labour’s pledge today not to raise it in government only serves to underline how difficult it is to change things under our political system.
More and more people and organisations want a society that is fairer and more equal and better investment in our crumbling public services. But to win under FPTP [first past the post] means promising to the corporate lobby that nothing much will change, and so dissatisfaction with politics grows.
Lib Dem leader Ed Davey says he is sorry he did not realise Post Office was lying to him about Horizon scandal
Ed Davey, the Lib Dem leader, has said that he is sorry that, as Post Office minister for two years in the coalition government, he did not realise Post Office managers were lying to him about the Horizon scandal. He says:
The Post Office Horizon scandal is the greatest miscarriage of justice of our time, and I am deeply sorry for the families who have had their lives ruined by it. As one of the ministers over the 20 years of this scandal, including my time as minister responsible for postal affairs, I’m sorry I did not see through the Post Office’s lies – and that it took me five months to meet Alan Bates, the man who has done so much to uncover it.
Davey made the comment in an article for the Guardian.
His wording is intended to repair the damage caused by a much-criticised interview last month in which Davey repeatedly refused to say he was sorry about what happened.
Davey is only one of many Post Office ministers, from all three main UK parties, who arguably might have done more to help victims of the Horizon scandal. But, largely because he is a party leader, he has faced more public criticism for his role in this than the others.
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Nobody in EU raising 'red flags' about Windsor framework changes, Irish PM Leo Varadkar says
The European Commission has said that it will “carefully analyse” the UK government’s proposals announced yesterday to change the way the Windsor framework (setting out post-Brexit trading rules) works in Northern Ireland. But at an EU meeting today, Leo Varadkar, the taoiseach (Irish PM), said he did not think Brussels would have major concerns about it. He said:
There are definitely going to be some questions about what was agreed between the UK and DUP but nobody is at this stage saying that there’s any red flags or anything that gives us major concern.
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Mike Freer on quitting as MP: I narrowly avoided David Amess killer
Mike Freer, the justice minister, has described how he escaped David Amess’s killer by a “stroke of luck” after announcing he will not seek re-election over fears for his safety. Eleni Courea has the story here.
Photograph: Dan Kitwood/Getty Images
At the business conference Rachel Reeves says that the UK’s corporation tax rate is the lowest in the G7, and in the bottom half of tax rates for OECD countries. She says she wants to keep it competitive and she repeats the point she made in her speech about being willing to act if necessary, ie, by reducing it from 25% if other countries were doing the same.
Updated
This is from Torsten Bell, the head of the Resolution Foundation thinktank, on Labour’s corporation tax pledge.
There’s the announcement from Rachel Reeves today: headline rate of corporation tax won’t be increased by a Labour government. Not a real surprise when rate is now 25% (vs 19% as recently as 22/23). Basically the Tories have already done the work on this tax.
There's the announcement from Rachel Reeves today: headline rate of corporation tax won't be increased by a Labour government. Not a real surprise when rate is now 25% (vs 19% as recently as 22/23). Basically the Tories have already don the work on this tax.
— Torsten Bell (@TorstenBell) February 1, 2024
Updated
What Reeves said about pledge not to increase corporation tax
This is what Rachel Reeves, the shadow chancellor, said in her speech about Labour’s pledge not to increase corporation tax.
There have been 26 changes to our corporation tax arrangements in this parliament alone. We can’t go on like this.
We reject the calls from those on the right wing of the Conservative party to cut corporation tax. Our current rate is the lowest in the G7.
We believe that 25 per cent rate strikes the correct balance between the needs of our public finances, and the demands of a competitive global economy.
The next Labour government will make the pro-business choice and the pro-growth choice: we will cap the headline rate of corporation tax at its current rate of 25% for the next parliament. And should our competitiveness come under threat, if necessary we will act.
That means businesses can plan investment projects today, with the confidence of knowing how their returns will be taxed for the rest of this decade.
To those of you in this room who might be wondering – do we really mean what we say? Has Labour really changed? Will warm words today be matched by action in government?
Be in no doubt. We will campaign as a pro-business party – and we will govern as a pro-business party.
Updated
Reeves has finished taking questions from journalists, and she is now doing a Q&A with a moderator, addressing issues raised by business figures in the audience.
Updated
Q: What do you expect business to do in return as part of a contract with a Labour government? How will they have to change?
Reeves says the new deal for working people sets out protections for workers that businesses would have to accept. And Labour would enforce the global minimum rate of corporation tax.
She says it is not just Labour saying what it would do. She says Labour’s ideas would be “shaped by business”.
Q: Alan Bates, the former post officer operator, has said today the compensation he was offered was derisory. If you are chancellor, you would have to authorise compensation. Do they deserve more?
Reeves says this is a scandal, and she says the post office operators must be properly compensated. She says the government should set aside money for this in the budget.
Reeves says, when she announced the £28bn green investment fund in 2021, she did not envisage the Liz Truss mini-budget.
Q: In 2021 you said you would review loopholes in the tax system? Have you not found any? Or are you holding those in reserve until after the election?
Reeves says she has announced plans to close three – on non-doms, on private school fees, and one affecting private equity.
Q: Will you do anything to take people like nurses and teachers out of the higher rate of tax?
Reeves says she has said taxes on working people are too high. But she will not make commitments that are not funded, she says.
Q: Do you appreciate why people think your change of stance on bankers’ bonuses means people say they do not know what you stand for?
Reeves says her number one priority is offering economic stability. That will always come first under Labour, she says.
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Q: Is the pledge to spend £28bn a year on green jobs a liability, and will you drop it?
Reeves says the UK needs green investment. But the green prosperity plan would have to be consistent with Labour’s fiscal rules.
There is at least one more budget before the election, possibly two, she says.
She implies final announcements won’t be made until then.
Reeves defends decision to rule out reimposing cap on bankers' bonuses
Reeves is now taking questions from journalists.
Q: Two days ago you said you would not bring back the cap on bankers’ bonuses. But three months ago you criticised the government for doing that. How can people trust you if you keep changing your mind?
Reeves says she did not think lifting the cap was right.
But she says business wants certainty.
She says safeguards against excessive risk-taking are now stronger than they were. And bonuses can be clawed back. That is why she won’t bring the cap back.
UPDATE: Reeves said:
What I hear loud and clear from business is that what it will take to get them to invest in Britain is stability and the last thing they need is more chopping and changing.
The truth is, that in financial services there are a lot more rules and regulations and safeguards in place than there were before the financial crisis, for example banks have to put aside much more capital than they did before 2008.
And there are much stronger rules about clawing back bankers’ bonuses. So we didn’t think it was the right priority, it wouldn’t have been my number one priority in that budget.
But the chopping and changing has got to end if we’re going to give stability to business and that’s why we will not be bringing that back.
Updated
Reeves says corporation tax will not rise above its current 25% rate during next parliament if Labour wins
Reeves says in Davos she met leading figures who wanted to be sure they could confidently invest in the UK.
After 14 years of uncertainty, “investment has cratered”, she says.
They want certainty – including on tax, she says.
Tax rates should not go up and down like a yo-yo.
Labour will offer businesses a fair contract, she says.
It will be based on the assumption that they pay what is owed.
But alongside that will be a commitment from the government to ensure stability.
Reeves says business said “loud and clear” it wanted certainty.
Labour will maintain full expensing (the £10bn a year tax cut announced by Jeremy Hunt in the autumn statement), she says.
But it will go further.
She says a 25% corporation tax rate strikes the right balance.
The next Labour government will cap the headline rate of corporation tax at 25% for the duration of the next parliament.
And, if competitiveness comes under threat, Labour “will act”, she says.
(That means she is not ruling out cutting it.)
Reeves says, if people doubt what she says, they should be in no doubt:
We will campaign as a pro-business party, and we will govern as a pro-business party.
Updated
Reeves says she will “never play fast and loose with the public finances”.
That is why she will “never waver from iron-clad fiscal rules”.
The UK needs a government guided by clear purpose, Reeves says.
Labour has set out five missions. But they are all tied to the economic mission – to raise growth.
But achieving growth cannot be done using policies from the 1980s and 1990s, she says.
A new economic consensus is taking place. Janet Yellen, the US Treasury secretary, calls it new supply side economics. But Reeves says she prefers to call it securonomics.
(She explained this in detail in a speech last year.)
Updated
Reeves says these are challenging economic times, and the problems have been exacerbated by political instability.
She claims that almost every month there are reports of businesses choosing not to invest in the UK.
These are the symptoms of economic decline.
Rachel Reeves, the shadow chancellor, is speaking now.
She says this conference embodies the spirit of partnership with business to which the next Labour government is committed.
Erin Platts, the chief executive of HSBC Innovation Banking, which is sponsoring today’s Labour conference, is speaking now.
She says the UK is a global leader in innovation, but does not celebrate that enough.
Updated
Rayner says if Labour wins the election, one thing is certain: it will face serious econonomic challenges from day one.
She says tackling these would require a two-way dialogue with business.
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There will be 'no surprises' for business under Labour, Rayner tells executives
Rayner says business will “always have a seat at the table” under a Labour government.
She says she and colleagues have already had a “frank conversation” with business figures about how they can boost the economy.
She says there will be “no surprises” for business under Labour.
And she claims that she feels “a lot more comfortable in the company of business leaders” than she does at parliament, which she says is not welcoming to someone from a working class background.
Updated
Rachel Reeves, the shadow chancellor, is about to give her speech to the Labour business conference. There is a live feed on Labour’s YouTube channel.
Angela Rayner, the deputy leader, is introducing Reeves now.
Hunt plays down IMF warning about budget, saying if they were just advising against untargeted tax cuts, he agrees
Jeremy Hunt was also asked about recent implict criticism he has received from the IMF in his interview with Nick Robinson. Rather than just say that they were wrong (as he did when asked about the OBR – see 9.30am), Hunt suggested the IMF was just warning against “untargeted” tax cuts.
He said:
Untargeted tax cuts that are just crowd pleasers. I agree with the IMF. But if they are strategic, small tax cuts, then that is a very important part of the strategy to grow the economy …
What the IMF were really saying, I think, when they use that word “discretionary”, is [that] a tax cut that isn’t going to help grow the economy over the long run wouldn’t be the right thing to do. I will give them the benefit of the doubt. That’s what I think they were saying, that’s what I hope they were saying, and if they were, I would agree with them.
No doubt the IMF does think that targeted tax cuts are better than untargeted ones.
But this week, when it issued its warning to the UK, the IMF was making a different point, about the balance between tax cuts and public spending. Pierre-Olivier Gourinchas, the IMF’s chief economist, said:
There is a need to put in place medium-term fiscal plans that will accommodate a very significant increase in spending pressures.
In the case of the UK, you might think of spending on healthcare and modernising the NHS; spending on social care; on education; you might think about critical public investment to address the climate transition; but also to boost growth.
Gourinchas said that, in the light of these commitments, the UK would have to balance tax and spending needs to ensure debt did not get out of control. He went on:
In that context we would advise against further discretionary tax cuts as envisioned and discussed now.
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Hunt criticises OBR boss Richard Hughes for calling his long-term budget spending forecasts 'work of fiction'
In his interview with the BBC’s Nick Robinson, Jeremy Hunt, the chancellor, criticised Richard Hughes, the head of the Office for Budget Responsibility, for calling the Treasury’s long-term public spending forecasts worse than “a work of fiction”.
Hughes told a Lords committee last month:
Some people call [the projections] a work of fiction, but that is probably being generous when someone has bothered to write a work of fiction and the government hasn’t even bothered to write down what its departmental spending plans are underpinning the plans for public services.
Asked about the comment, Hunt said:
Those words are wrong and they should not have been said.
The government decides spending plans and spending reviews.
The next spending review will start in April 2025 and obviously until that point when that spending review is done, we do not publish our spending plans. No government ever has.
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Jeremy Hunt suggests tax cuts in budget won’t match last year’s £20bn giveaway
Good morning. Labour is holding a business conference today, with tickets going at £1,000 a time to executives who want to learn how a Keir Starmer government might handle the economy. According to a press release overnight, 400 senior business leaders are attending, and tickets sold out within four hours. Keir Starmer and Rachel Reeves, the shadow chancellor, are both speaking.
But this morning it is Jeremy Hunt, the chancellor, making the news, with a declaration that his scope for tax cuts in the budget may be limited. In an interview with the BBC’s Nick Robinson for his Political Thinking podcast, Hunt said:
It does not look to me like we will have the same scope for cutting taxes in the spring budget that we had in the autumn statement.
And so I need to set people’s expectations about the scale of what I am doing because people need to know that when a Conservative government cuts taxes we will do so in a responsible and sensible way.
But we also want to be clear that the direction of travel we want to go in is to lighten the tax burden.
Earlier this week the Times reported that Hunt delivered this message to cabinet. In their report, Mehreen Khan and Steven Swinford said Hunt told colleagues there would be less headroom for tax cuts than in the autumn statement and that relatively low levels of productivity in Britain were “our major structural weakness”. Asked about the report on ITV’s Peston show last night, Hunt said:
As things stand at the moment, things can change, it doesn’t look like I’ll have the kind of room I had for those very big tax cuts in the autumn, and I did mention that to the cabinet, yes.
This may, of course, just be expectation management. In September last year Hunt said that tax cuts would be “virtually impossible” in the light of economic circumstances as they were then. Two months later, in the autumn statement, he announced tax cuts worth £20bn.
But, in assessing what politicians say, it is always worth starting with the assumption that they might be telling the truth, and it would not be surprising if Hunt has concluded that he cannot afford massive tax cuts – because that is exactly what mainstream economists are saying. Only this week the IMF suggested Hunt would not be able to reduce taxes without public spending being cut to an unacceptable level.
It is also worth pointing out that there is a huge difference between ruling out “very big tax cuts”, and ruling out any tax cuts. There were two main tax cuts in the autumn statement: a cut of 2p in the pound from national insurance, costing £9bn in 2024-25; and full expensing, a tax cut for business worth £11bn a year by 2027-28.
For electoral reasons, Hunt is expected to focus on personal tax cuts in the budget and he could still do quite a lot on that front without matching the £20bn splurge from last autumn.
Here is the agenda for the day.
10am: Rachel Reeves, the shadow chancellor, gives a speech and holds a Q&A at Labour’s business conference.
10am: Rishi Sunak holds a meeting in Downing Street to mark the creation of a new small business council.
11.30am: Downing Street holds a lobby briefing.
After 11.30am: MPs hold two 90-minute debates on the two regulations being passed to implement the reforms to the Northern Ireland Windsor framework announced yesterday.
12pm: Humza Yousaf, Scotland’s first minister, takes questions at Holyrood.
2pm: Keir Starmer gives a speech and holds a Q&A at Labour’s business conference.
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