Starmer urged to introduce wealth tax as an alternative of chopping incapacity advantages
Good morning. “You need me to chop £1bn. Shall I take £100 every off 10 million individuals, or £1,000 every off 1 million individuals?” The previous Tory chancellor Ken Clarke is credited with developing with this rationalization of what huge quantity spending cuts really imply, however each chancellor has in all probability thought the identical.
Tomorrow the federal government is predicted to introduced incapacity cuts mentioned to be price at the very least £5bn. You’ll be able to work out the maths. That’s greater than 3 times as a lot because the £1.5bn saved by chopping the winter gas fee, the one coverage resolution that as completed greater than anything to make the federal government unpopular. So it’s not exhausting to work out why Keir Starmer is dealing with Labour turmoil over this resolution.
(To be honest, the winter gas fee was a direct minimize. The figures briefed about how a lot cash the federal government desires to avoid wasting by chopping incapacity advantages appear to discuss with financial savings by the top of the last decade. However we don’t know the small print at this level. Final week the New Economics Basis, a leftwing thinktank, claimed that cuts could be worth as much as £9bn by 2029-30.)
Exhausting information could be in brief provide this morning, however remark isn’t. With 24 hours to go earlier than one of many largest bulletins of the Keir Starmer premiership, a lot of persons are staking out positions. Listed below are a few of the key developments.
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Diane Abbott, the Labour leftwinger and mom of the Commons, has mentioned urged the federal government to impose a wealth tax as a substitute for chopping disabilty advantages. In an interview on the Right this moment programme, requested what she would do as an alternative, Abbott replied:
I might introduce the wealth tax. Should you introduced in a wealth tax of simply 2% on individuals with belongings over £10m, that will increase £24bn a yr. That’s what I might do.
That is broadly just like what the Green party was proposing on the final election.
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Andy Burnham, the Labour mayor of Higher Manchester, has joined these expressing issues concerning the plans. In an article for the Times, he says:
I might share issues about changing support and eligibility to benefits whereas leaving the present top-down system broadly in place. It will lure too many individuals in poverty. And to be clear: there isn’t any case in any state of affairs for chopping the help accessible to disabled people who find themselves unable to work.
He says Higher Manchester’s Live Well initiative is a mannequin for the way people who find themselves in poor health could be supported again into work.
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Abbott has mentioned that opposition to the federal government’s plans for incapacity profit cuts is not only coming from the left. In her interview on the Right this moment programme, she mentioned she agreed with what Burnham is saying, and he or she mentioned she additionally agreed with Ed Balls, who said last week that chopping advantages for these most in want was not one thing Labour needs to be doing. Abbott, Burnham and Balls have been three of the candidates within the 2010 Labour management contest. A fourth, Ed Miliband, can also be reported sad concerning the cuts, though as a cupboard minister he has not spoken out publicly.
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Emma Reynolds, a Treasury minister, has mentioned the federal government is “in the interim not going to come back ahead with a wealth tax”. She mentioned this in an interview on the Right this moment programme, when requested if the federal government could be following Abbott’s recommendation. Reynolds mentioned the federal government had already raised taxes affecting rich individuals.
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Reynolds urged Labour MPs and others to attend for the small print of the plans earlier than coming to a verdict on them. In feedback implying the ultimate proposals won’t be as draconian as a few of the pre-briefing has implied, she mentioned:
Some colleagues are leaping to conclusions about our plans earlier than they’ve heard them. So I simply urge them to be affected person.
When it was put to right here that she was saying a few of their issues could be addressed once they learn the precise proposals, Reynolds mentioned there had been “a number of hypothesis about what we would or won’t do”.
We’ll set out additional particulars, however the severely disabled and probably the most susceptible will at all times get help, and there’ll at all times be a security web.
The federal government is reportedly specializing in chopping incapacity and incapacity advantages to stem rising spending and help extra individuals into work. However whereas the system wants reform, Ministers seem like centered on chopping private independence funds (Pip) – a profit that isn’t associated to work.
The muse warns that chopping Pip by £5bn in 2029-30, for instance by elevating the edge to qualify for help, may see round 620,000 individuals dropping £675 per thirty days, on common. The Basis provides that 70 per cent of those cuts could be focused on households within the poorest half of the revenue distribution.
Right here is the agenda for the day.
9.30am: Rachel Reeves, the chancellor, is assembly the heads of regulatory companies in Downing Road to debate their plans to spice up progress. Later Reeves is recording broadcast interviews.
11.30am: Downing Road holds a foyer briefing.
Midday: Nigel Farage and different Reform UK MPs maintain a press convention to make what they name “a particular announcement”.
2.30pm: Liz Kendall, the work and pensions secretary, takes questions within the Commons.
After 3.30pm: David Lammy, the international secretary, is predicted to make a Commons assertion about Ukraine.
After 4.30pm: MPs begin debating the remaining phases of the kids’s wellbeing and colleges invoice.
5.35pm: Kemi Badenoch provides a speech on the CPS’s Margaret Thatcher Convention on Remaking Conservatism. Different audio system earlier within the day embrace George Osborne, the previous chancellor, who’s doing a Q&A at 3.35pm.
Early night: Keir Starmer meets Mark Carney, the brand new Canadian PM, in Downing Road.
If you wish to contact me, please publish a message under the road or message me on social media. I can’t learn all of the messages BTL, however should you put “Andrew” in a message geared toward me, I’m extra prone to see it as a result of I seek for posts containing that phrase.
If you wish to flag one thing up urgently, it’s best to make use of social media. You’ll be able to attain me on Bluesky at @andrewsparrowgdn. The Guardian has given up posting from its official accounts on X however particular person Guardian journalists are there, I nonetheless have my account, and should you message me there at @AndrewSparrow, I’ll see it and reply if needed.
I discover it very useful when readers level out errors, even minor typos. No error is simply too small to right. And I discover your questions very attention-grabbing too. I can’t promise to answer to all of them, however I’ll attempt to reply to as many as I can, both BTL or typically within the weblog.
Key occasions
OECD cuts progress forecast for UK in 2025 by 0.3% to 1.4%
The Organisation for Economic Co-operation and Development (OECD) has minimize its forecast for UK progress by 0.3 share factors this yr to 1.4%, and by 0.1 share factors for 2026 to 1.2%, Richard Partington reviews. The reducations are from the forecast printed in December.
Right here is an extract from the OECD’s newest financial outlook report.
European economies will expertise fewer direct financial results from the tariff measures integrated within the baseline projections, however heightened geopolitical and coverage uncertainty continues to be prone to restrain progress. Euro space progress is projected to edge up from 0.7% in 2024 to 1.0% in 2025 and 1.2% in 2026, with progress in the UK projected to be 1.4% in 2025 and 1.2% in 2026.
And right here is Richard’s story.
Commenting on the report, Rachel Reeeves, the chancellor, mentioned:
This report reveals the world is altering, and elevated world headwinds equivalent to commerce uncertainty are being felt throughout the board.
A altering world means Britain should change too, and we’re delivering a brand new period of stability, safety and renewal, to guard working individuals and hold our nation protected.
This implies we are able to higher reply to world uncertainty, with the UK forecast to be Europe’s quickest rising G7 economic system over the approaching years – second solely to the US.
Whereas it’s hardly shocking that Diane Abbott, who has been on the left of the Labour celebration all her profession and who was shadow residence secretary below Jeremy Corbyn, is against the proposed incapacity profit cuts (see 9.31am), what’s exceptional about this concern is that it has united the Labour left with a few of these on the reverse finish of the celebration’s ideological spectrum. In her Right this moment interview Abbott identified that she is now aligned on this with Ed Balls. After her interview, John McTernan, who when he was Tony Blair’s political secretary devoted a lot of his time to marginalising individuals like Abbott, posted a message on social media saying that one in all her feedback was wonderful.
@HackneyAbbott Glorious suggestion on @BBCr4today that the federal government needs to be a “bit extra Attlee” – a warfare state will need to have a welfare state.
Kemi Badenoch has instructed her celebration that she desires to take her time earlier than developing with a full coverage platform. In response to an merchandise in Andrew Pierce’s diary in the Daily Mail, the celebration goes by its archives within the seek for concepts. He says:
Little-known Tory celebration chairman Nigel Huddleston and the whole celebration board are heading to the Bodleian Library in Oxford to look at the official celebration archive. It options leaflets, handbills, automobile stickers, posters, manifestoes, and unsolicited mail courting again to 1867 when the Earl of Derby was celebration chief.
Huddleston and a group of researchers will pore over papers in the hunt for coverage concepts, slogans, and marketing campaign themes.
SNP urges Starmer to scrap proposed incapacity cuts and revise fiscal guidelines
The SNP is urging the federal government to desert its proposed incapacity advantages cuts and its fiscal guidelines. In an announcement this morning Stephen Flynn, the SNP’s chief at Westminster, mentioned:
Keir Starmer should admit he obtained it flawed, scrap the Labour celebration’s cuts to disabled individuals and ditch its damaged Tory spending guidelines, that are the central downside and can make everybody poorer.
The cuts to disabled persons are shameful – and they’re simply the beginning. We are going to all be worse off if the Labour authorities takes the axe to public providers and goes forward with its reckless plan for a brand new period of austerity cuts.
Former minister Michael Matheson to face down as MSP in 2026, becoming a member of checklist of main SNP figures quitting Holyrood
Severin Carrell
Severin Carrell is the Guardian’s Scotland editor.
Michael Matheson, the disgraced former Scottish Nationwide celebration minister, is standing down on the subsequent Holyrood election, the most recent amongst a rising variety of senior SNP figures who’re quitting.
The MSP for Falkirk, Matheson was forced to resign as health secretary final yr after he wrongly claimed £10,935 in cell roaming bills for the private use of his parliamentary iPad on a household vacation.
It emerged his youngsters had live streamed a football match whereas they have been in Morocco; Matheson additionally didn’t comply with the principles on utilizing and updating the iPad. He was suspended from Holyrood for a file 27 days and docked 54 days pay, regardless of a plea for leniency from John Swinney, the primary minister and a detailed good friend.
In an announcement, Matheson mentioned:
After I joined the SNP at 17 years of age the re-establishment of a Scottish parliament was nonetheless a distant prospect.
I may by no means have imagined that I might have had the privilege to symbolize Falkirk in our nationwide parliament for over twenty years.
Matheson, 54, is among the previous few MSPs elected to the Scottish parliament at devolution in 1999. He initially received on the Central Scotland regional checklist earlier than changing into the constituency MSP for Falkirk West in 2007.
He’s one in all a rising cohort of senior SNP figures quitting on the subsequent Holyrood election, due in Might 2026. Two former first ministers are standing down: Nicola Sturgeon, who announced her decision to quit last week, and Humza Yousaf, her successor.
A number of cupboard secretaries are additionally standing down: Fiona Hyslop, the transport secretary and one other veteran from 1999; Mairi Gougeon, the widely-respected rural affairs secretary, who joined parliament in 2016, and Shona Robison, the present finance secretary additionally first elected in 1999. A number of junior ministers, Richard Lochhead, Christina McKelvie and Joe Fitzpatrick, are additionally leaving.
Regulators agree as much as 60 pro-growth measures with Treasury, together with slimmed-down bat safety steerage
Rachel Reeves, the chancellor, has introduced the abolition of one other quango, Philip Inman reviews. She made the announcement forward of her assembly with regulators, which is happening now, the place she is discussing their plans to advertise progress. That is the third quango scrapped by the federal government throughout the previous week, however solely one of many bulletins, about NHS England, made headline information. Final week the federal government mentioned the Payment Systems Regulator was going, and at present the Regulator for Group Curiosity Corporations is getting the chop.
Right here is Philip’s story.
Beneath strain from the Treasury, regulators have provide you with as much as 60 propoals supposed to spice up progress. In its news release, the Treasury lists a few of them.
Following weeks of intense negotiations, watchdogs have signed as much as 60 progress boosting measures – together with:
-Quick-tracking new medicines to market by a brand new pilot to offer parallel authorisations from key healthcare regulators, in order that sufferers can entry the medication they want faster;
-Attracting extra funding from worldwide monetary providers companies by establishing a bespoke ‘concierge service’ to assist them become familiar with UK laws, making it simpler to do enterprise within the UK;
-Paving the way in which for bundle deliveries by drone, because the Civil Aviation Authority permits at the very least two extra giant drone-flying trials within the coming months – which have already helped minimize journey occasions for blood samples from half-hour right down to 2 minutes between hospitals – and streamlines the regulatory course of for manufacturing drones;
-Permitting households to handle their spending safely because the Monetary Conduct Authority critiques contactless fee limits, together with the £100 cap on particular person funds, whereas dashing up queues at checkout.
-Help for homeownership because the Monetary Conduct Authority simplifies mortgage lending guidelines, together with making it simpler to re-mortgage with a brand new lender and cut back mortgage phrases.
-Serving to start-ups safe funding to develop by the Monetary Conduct Authority issuing extra notices the place they’re prone to approve purposes from budding entrepreneurs.
And there’s unhealthy information for bats. Planning steerage supposed to guard them is being slimmed down, the Treasury says.
It shouldn’t be the case that to transform a storage or outbuilding you should wade by a whole lot of pages of steerage on bats. Environmental steerage, together with on defending bats, shall be checked out afresh. Pure England has agreed to evaluation and replace their recommendation to native planning authorities on bats to make sure there’s clear, proportionate and accessible recommendation accessible.
Peter Walker has extra from Diane Abbott’s interview on the Right this moment programme this morning.
Starmer urged to introduce wealth tax as an alternative of chopping incapacity advantages
Good morning. “You need me to chop £1bn. Shall I take £100 every off 10 million individuals, or £1,000 every off 1 million individuals?” The previous Tory chancellor Ken Clarke is credited with developing with this rationalization of what huge quantity spending cuts really imply, however each chancellor has in all probability thought the identical.
Tomorrow the federal government is predicted to introduced incapacity cuts mentioned to be price at the very least £5bn. You’ll be able to work out the maths. That’s greater than 3 times as a lot because the £1.5bn saved by chopping the winter gas fee, the one coverage resolution that as completed greater than anything to make the federal government unpopular. So it’s not exhausting to work out why Keir Starmer is dealing with Labour turmoil over this resolution.
(To be honest, the winter gas fee was a direct minimize. The figures briefed about how a lot cash the federal government desires to avoid wasting by chopping incapacity advantages appear to discuss with financial savings by the top of the last decade. However we don’t know the small print at this level. Final week the New Economics Basis, a leftwing thinktank, claimed that cuts could be worth as much as £9bn by 2029-30.)
Exhausting information could be in brief provide this morning, however remark isn’t. With 24 hours to go earlier than one of many largest bulletins of the Keir Starmer premiership, a lot of persons are staking out positions. Listed below are a few of the key developments.
-
Diane Abbott, the Labour leftwinger and mom of the Commons, has mentioned urged the federal government to impose a wealth tax as a substitute for chopping disabilty advantages. In an interview on the Right this moment programme, requested what she would do as an alternative, Abbott replied:
I might introduce the wealth tax. Should you introduced in a wealth tax of simply 2% on individuals with belongings over £10m, that will increase £24bn a yr. That’s what I might do.
That is broadly just like what the Green party was proposing on the final election.
-
Andy Burnham, the Labour mayor of Higher Manchester, has joined these expressing issues concerning the plans. In an article for the Times, he says:
I might share issues about changing support and eligibility to benefits whereas leaving the present top-down system broadly in place. It will lure too many individuals in poverty. And to be clear: there isn’t any case in any state of affairs for chopping the help accessible to disabled people who find themselves unable to work.
He says Higher Manchester’s Live Well initiative is a mannequin for the way people who find themselves in poor health could be supported again into work.
-
Abbott has mentioned that opposition to the federal government’s plans for incapacity profit cuts is not only coming from the left. In her interview on the Right this moment programme, she mentioned she agreed with what Burnham is saying, and he or she mentioned she additionally agreed with Ed Balls, who said last week that chopping advantages for these most in want was not one thing Labour needs to be doing. Abbott, Burnham and Balls have been three of the candidates within the 2010 Labour management contest. A fourth, Ed Miliband, can also be reported sad concerning the cuts, though as a cupboard minister he has not spoken out publicly.
-
Emma Reynolds, a Treasury minister, has mentioned the federal government is “in the interim not going to come back ahead with a wealth tax”. She mentioned this in an interview on the Right this moment programme, when requested if the federal government could be following Abbott’s recommendation. Reynolds mentioned the federal government had already raised taxes affecting rich individuals.
-
Reynolds urged Labour MPs and others to attend for the small print of the plans earlier than coming to a verdict on them. In feedback implying the ultimate proposals won’t be as draconian as a few of the pre-briefing has implied, she mentioned:
Some colleagues are leaping to conclusions about our plans earlier than they’ve heard them. So I simply urge them to be affected person.
When it was put to right here that she was saying a few of their issues could be addressed once they learn the precise proposals, Reynolds mentioned there had been “a number of hypothesis about what we would or won’t do”.
We’ll set out additional particulars, however the severely disabled and probably the most susceptible will at all times get help, and there’ll at all times be a security web.
The federal government is reportedly specializing in chopping incapacity and incapacity advantages to stem rising spending and help extra individuals into work. However whereas the system wants reform, Ministers seem like centered on chopping private independence funds (Pip) – a profit that isn’t associated to work.
The muse warns that chopping Pip by £5bn in 2029-30, for instance by elevating the edge to qualify for help, may see round 620,000 individuals dropping £675 per thirty days, on common. The Basis provides that 70 per cent of those cuts could be focused on households within the poorest half of the revenue distribution.
Right here is the agenda for the day.
9.30am: Rachel Reeves, the chancellor, is assembly the heads of regulatory companies in Downing Road to debate their plans to spice up progress. Later Reeves is recording broadcast interviews.
11.30am: Downing Road holds a foyer briefing.
Midday: Nigel Farage and different Reform UK MPs maintain a press convention to make what they name “a particular announcement”.
2.30pm: Liz Kendall, the work and pensions secretary, takes questions within the Commons.
After 3.30pm: David Lammy, the international secretary, is predicted to make a Commons assertion about Ukraine.
After 4.30pm: MPs begin debating the remaining phases of the kids’s wellbeing and colleges invoice.
5.35pm: Kemi Badenoch provides a speech on the CPS’s Margaret Thatcher Convention on Remaking Conservatism. Different audio system earlier within the day embrace George Osborne, the previous chancellor, who’s doing a Q&A at 3.35pm.
Early night: Keir Starmer meets Mark Carney, the brand new Canadian PM, in Downing Road.
If you wish to contact me, please publish a message under the road or message me on social media. I can’t learn all of the messages BTL, however should you put “Andrew” in a message geared toward me, I’m extra prone to see it as a result of I seek for posts containing that phrase.
If you wish to flag one thing up urgently, it’s best to make use of social media. You’ll be able to attain me on Bluesky at @andrewsparrowgdn. The Guardian has given up posting from its official accounts on X however particular person Guardian journalists are there, I nonetheless have my account, and should you message me there at @AndrewSparrow, I’ll see it and reply if needed.
I discover it very useful when readers level out errors, even minor typos. No error is simply too small to right. And I discover your questions very attention-grabbing too. I can’t promise to answer to all of them, however I’ll attempt to reply to as many as I can, both BTL or typically within the weblog.
