Afternoon summary
Rishi Sunak has sidestepped a question about his decision to pay for an upgrade to the local electricity grid so that he could heat his swimming pool meant he was out of touch. (See 2.13pm.)
Kwasi Kwarteng, the former chancellor, has revealed that he is sometimes charging broadcasters £1,000 a time for interviews. These are from the i’s Paul Waugh.
.@KwasiKwarteng admits to @theipaper he charges £1,000+ to be interviewed on TV.
— Paul Waugh (@paulwaugh) March 31, 2023
And TalkTV and GBNews have paid him.
"People should be compensated for their time when they have left office....When you’re a backbencher, you don’t even have a driver..." https://t.co/rrhIhdAX73
Full story here, with @adamsherwin10 https://t.co/73XrlZAUT9
— Paul Waugh (@paulwaugh) March 31, 2023
Back to CPTPP, and here are two articles on the deal that are worth reading.
Ambrose Evans-Pritchard in the Daily Telegraph claims this shows the EU is undergoing “a slow, comfortable, economic relegation”. He says:
As a practical matter, UK accession kills off any likelihood that it will ever rejoin the EU customs union or single market. There will be no ‘dynamic alignment’ with EU directives. The course is set irreversibly in a different direction.
The CPTPP members have one shared objective: to make trade as smooth and easy as humanly possible, subject to basic civilised standards. It is governed by twin principles of mutual recognition and equivalence.
This is entirely at odds with EU ideology. Brussels obliges supplicants to adopt identical laws, rules, and standards – under the writ of the European Court – in order to secure access to the European market. It does not accept reciprocation as a governing principle of trade.
The EU’s neo-colonial ambitions have reached obvious limits. Its share of global GDP will drop to 14.6pc this year. It is losing roughly one percentage point every three years. Europe will remain a valuable market. Its regulatory apparatus will punch above its weight for a while yet.
Yet the EU is undergoing a slow, comfortable, economic relegation.
Steve Peers, a professor of EU law, says it is wrong to say the deal means the UK cannot rejoin the EU.
Here's the provision on possible withdrawal from the CPTPP. The claim that joining it means that the UK cannot rejoin the EU is obviously false. pic.twitter.com/Dec5X2vzq6
— Steve Peers (@StevePeers) March 30, 2023
Sam Lowe, a trade policy expert, explains on his Substack account what the deal actually does. Here is an extract.
Finally, the rules of origin bit. From a goods perspective, the absolute main benefit of CPTPP for UK firms is the diagonal cumulation provisions.
To re-cap: for a product to qualify for the preferential tariffs of a trade agreement, the exporter must demonstrate the product is sufficiently “local”. And every trade agreement has different terms and conditions stipulating what counts as sufficiently local.
For example, a UK free trade agreement might say that for a car to qualify as local 45% of the value of the car must have been created in the UK.
The benefit of CPTPP is that it [broadly] allows for inputs sourced from any of the members to count towards your “is it local” assessment.
Here are some more pictures from Rishi Sunak’s pothole crackdown in Darlington.
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Starmer urges government to levy new windfall tax on energy firms to fund council tax freeze
Keir Starmer received some criticism yesterday for launching Labour’s campaign for the local elections with a hypothetical pledge on council tax that does not actually commit the party to anything. I wrote about it here, and Dan Bloom at Politico sums it up well in his London Playbook briefing.
Labour chair Anneliese Dodds spent several minutes on TalkTV defending Labour’s pledge that it “would” freeze all council tax this year, but (checks notes) isn’t actually promising to do so in the first year of a Labour government. Not yet, anyway. Starmer sent a personal email on Thursday to supporters with the subject “Your council tax, frozen” … which it isn’t.
In an interview on a campaign visit to Plymouth today, Starmer rejected suggestions his policy was hypothetical, on the grounds that if the government wanted, it could implement it now. He said:
It’s not hypothetical, because the money we would use is the profits from oil and gas companies, we would tax that, there’s £10bn there.
The government could – just as they stole the idea of an energy price freeze from us – they could steal this and we could move all this in the next few weeks.
Because if the government said we’ll match Labour and have a freeze on council tax for the next year, we would obviously vote for it. The money is available. And if the government was serious about dealing with the cost of living, they would take this Labour idea and run with it.
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Sunak sidesteps question about whether having private swimming pool means he's out of touch
Here are the main points from Rishi Sunak’s broadcast interview earlier.
Sunak refused to say what he would do if the inquiry into Dominic Raab found he bullied officials. “There’s an independent inquiry happening, it wouldn’t be right to preempt that inquiry,” Sunak said when asked. Asked why it was taking so long, Sunak said that the inquiry was independent and that it would not be right for him to say how long it should take.
He sidestepped a question about his decision to pay for an upgrade to the local electricity grid so that he could heat his swimming pool meant he was out of touch. Asked how this would go down with people struggling to pay their own heating bills, Sunak did not comment on his pool, but said the support given by the government to help people with energy bills had been worth about £1,500 per family. Asked again if he was out of touch, Sunak said people could decide whether or not that support was sufficient.
He promised what the BBC is describing as a “clampdown on potholes”, saying that more money was being spent fixing them in the north-east of England and that new powers coming into force would penalise utility companies that do not repair roads after digging them up.
Updated
Rishi Sunak has been campaigning in Darlington today, and BBC News has just broadcast an interview with him. I will post the extracts shortly, but it started with Sunak talking about tackling potholes. On that theme, he posed for this picture earlier.
It’s a wonderful example of a local paper picture – although if that is the biggest pothole they could find, then Firth Moor is not doing badly.
Badenoch dismisses questions about economy doing worse than G7 competitors by claiming others in 'same situation'
In her Today programme interview this morning, Kemi Badenoch, the business and trade secretary, was asked several what you might call ‘Why is everything so rubbish?’ questions by the presenter, Amol Rajan. She responded fluently and did not get flustered – but only by refusing to acknowledge the truth.
Rajan started by asking about today’s growth figures, showing that GDP rose by 0.1% in the final quarter of last year. Rajan asked if that was not a figure to be proud of. Badenoch replied:
0.1% means there is growth. We are in the same situation as quite a lot of mature Western economies. I’m just pleased that we have avoided a recession and it shows that we have a stable government and a stable economy.
Not quite. Most economists would say the UK is doing worse than its competitors on growth. For example, here is a chart from a Commons library briefing on this topic, showing the UK’s record on growth between pre-pandemic and now compared to G7 countries and the Eurozone’s.
The UK is also the only country in the G7 whose economy is expected to shrink in 2023, according to forecasts by the OECD (this month) and by the IMF (in January).
Rajan also asked specifically about productivity. He said that in the decade to 2007, Britain had the second highest productivity growth in the G7, but in the decade to 2019 it had the second lowest productivity growth in the G7. In response, Badenoch claimed this was just an international problem. She said:
On productivity more generally, you are right. Productivity is something that we know has been falling. But … there’s been quite a lot of upheaval. The numbers would be the same if you looked across the board. It’s not because we have been here [ie, the Conservative have been in power] that this happened. It’s happened across multiple countries.
But that is not right either. Here is a chart, from a Labour party briefing on growth, showing the UK’s performance on productivity growth compared to other countries.
Rajan also asked about life expectancy, saying it was rising for rich people but falling for poor people. When he put it to Badenoch that this was an indictment of the Tories’ record, she said the reasons for this might be complex.
It is very disappointing when we see life expectancy falling in some cohorts. But I remember when I looked at, for instance, the issue of Covid disparities for ethnic minorities … and there’s there’s a lot of complexity in terms of what feeds into health outcomes.
The reasons may indeed be complex. But this is another areas where the UK’s record is worse than that of most other countries in the G7, as Rachel Hall reportedly recently.
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The Association of School and College Leaders, which represents headteachers, has criticised Gillian Keegan, the education secretary, for implying that teachers are not providing sex education responsibly.
In her statement announcing a review this morning (see 11.35am), Keegan said she was “deeply concerned” by reports of what was happening in classrooms. Geoff Barton, the ASCL general secretary, said:
It is very disappointing to see education secretary Gillian Keegan’s implicit criticism of schools when she says the review will restore the confidence of parents.
In fact, the vast majority of schools teach this subject cautiously, sensitively and in an age-appropriate manner. Claims made about inappropriate teaching are overblown, sweeping and supported by evidence which is flimsy at best.
Barton also said the government should fund specialist teachers for this topic.
The government has provided very little training support for the teaching of this subject and we sincerely hope the review that is due to take place will make recommendations around providing more and better-resourced training.
This is such a sensitive and difficult subject to navigate that it really requires the provision of specialist teachers, but the government expects it to be taught by existing classroom teachers who are also teaching other subjects. As ever, it expects to deliver major policies on the cheap, and then is quick to criticise schools.
The UK government has announced a £57m funding package to support Northern Ireland charities and community organisations facing a financial crisis due to a loss of European money, PA Media reports. PA says:
Eighteen projects across the region will receive backing through the UK shared prosperity fund with a focus on groups helping support people into work.
The announcement comes just a day before financial support provided by the European social fund comes to an end due as a consequence of Brexit. Some charities in Northern Ireland had warned they would have to cut staff and support programmes if funding was not replaced.
There are more details of the funding in the government news release.
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Dmitry Grozoubinski, a former international trade negotiator and founder of the ExplainTrade consultancy, posted a useful, short thread on the CPTPP trade deal earlier this week.
1/ Sigh. Ok, listen:
— Dmitry Grozoubinski (@DmitryOpines) March 30, 2023
1️⃣ Joining the CPTPP is good.
2️⃣ In any future scenario where a government has the desire and opportunity to rejoin the EU but finds doing so incompatible with CPTPP membership, that government can just leave the CPTPP (and should). pic.twitter.com/VddpZ4dQcW
2/
— Dmitry Grozoubinski (@DmitryOpines) March 30, 2023
3️⃣ UK did a good job rolling over EU FTAs and negotiating new ones with CPTPP members so trade benefits of CPTPP are unlikely to be "huge".
4️⃣ Primary benefits are geostrategic, not economic, plus being in the CPTPP will position the UK well for Chinese or US accessions. pic.twitter.com/G1Dyz41YpC
3/ 5️⃣ Like the mythical US FTA, joining CPTPP was a stupid argument for leaving the European Union... but is a sensible thing to explore having left.
— Dmitry Grozoubinski (@DmitryOpines) March 30, 2023
Nothing UK negotiators can do will ever compensate meaningfully for Brexit, but that doesn't mean they should lie down and die. pic.twitter.com/Fu1HOZgltC
Dmitry Grozoubinski
4/ 6️⃣ Shanker Singham spent a good part of the last half decade promising vast benefits to the UK after Brexit driven by largely unspecified regulatory reforms.
— Dmitry Grozoubinski (@DmitryOpines) March 30, 2023
He should be asked what happened with that.
/end pic.twitter.com/nRSWhWoCOF
Liz Truss, the former PM, has put out a statement about the CPTPP deal – pointing out that negotiations started when she was international trade secretary. Truss said:
As trade secretary, I made our formal application to join CPTPP two years ago. I am delighted negotiations are completed, deepening UK access to some of the world’s fastest-growing economies. This is Global Britain in action and an important counterweight to those who seek to undermine our values.
Keegan announces sex education review, saying she is 'deeply concerned' by claims inappropriate lessons being taught
At PMQs earlier this month Rishi Sunak said the Department for Education would review sex education in schools in England. He was responding to a question from Miriam Cates, who claimed that children were being exposed to material that was “age-inappropriate, extreme, sexualising and inaccurate”.
Gillian Keegan, the education secretary, has now released more details of the review – although not the names of the people who will sit on an independent panel contributing to it. She says she is “deeply concerned” about some of the claims about what’s being taught. In a statement she says:
I am deeply concerned about reports of inappropriate lessons being taught in schools.
This urgent review will get to the heart of how RSHE is currently taught and should be taught in the future. This will leave no room for any disturbing content, restore parents’ confidence, and make sure children are even better protected.
The DfE says the review will “make sure all children are protected from inappropriate content in all cases, even if many schools already teach RSHE [relationships, sex, and health education] and engage parents in a positive way.”
It will also “consider how to make sure all RSHE teaching is factual and does not present contested views on sensitive topics as fact”, the DfE says.
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Badenoch urges media to 'not keep talking' about Brexit amid complaints CPTPP deal won't compensate for EU trade loss
Kemi Badenoch, the business and trade secretary, did a media round this morning to discuss the CPTPP announcement. As well as dismissing claims that the deal will only increase the size of the economy by 0.08% (it’s a government figure, but Badenoch says it is based on old data – see 9am), here are some of the other points she made about the deal.
Badenoch told Times Radio she was “unbelievably excited” about the outcome of the negotiations. She said:
It is one of the biggest trade deals we’ve ever done. It’s certainly the biggest trade bloc we’ve entered since we joined the European Economic Community. And what it’s going to do is open up our economy to where the new global growth is coming from.
The CPTPP regional countries’ total GDP is about £9tr, about 500 million people. It’s where the new middle class will be coming from in the future and now we’re going to have a closer trading relationship with them.
She said what mattered most was not the potential of the deal now, but its potential for the future. She told the Today programme:
Think of it like us buying a start-up. It’s not about what it’s doing today, but about the potential for growth tomorrow.
She urged an interviewer to “not keep talking” about Brexit. On Times Radio, when asked about the fact that the 0.08% boost to GDP produced by the deal in no way compensates for the estimated 4% drop in GDP Brexit will produce, she said:
First of all, what the OBR [which produced the 4% figure] is doing is forecasting, which is why a lot of the modelling is so speculative. The second thing is that we are still in a free trade agreement with the EU. This is in addition to our free trade agreement.
I think it would be quite ridiculous to suggest that we shouldn’t carry out any free trade deals now that we’ve left the EU.
We’ve left the EU so we need to look at what to do in order to grow that UK economy and not keep talking about a vote from seven years ago.
Badenoch was not in the Commons at the time of the referendum to leave the EU in 2016, but she voted for Brexit and at one point was keen to champion the idea. However, like other Brexiters, she is more reticent on the subject now. This recent poll from Ipsos helps to explain why. Only one person in five thinks it has had a positive impact.
She rejected suggestions that the deal could be environmentally damaging because it includes Malaysia, a country where the production of palm oil is driving deforestation. Asked about this, she told Sky News:
Moving the tariff from 2% to 0% is not what’s going to cause deforestation. And actually, the standards which are set by this government, by the Department for the Environment, is what’s going to dictate what comes into the country.
But also, being in the trade bloc means that we’re going to have more influence on sustainability. Palm oil is actually a great product. It’s in so many of the things we use. This is not some illegal substance we’re talking about.
Updated
UK avoids recession as economy stronger than first thought at end of 2022
Britain’s economy grew more than initially thought in late 2022 as a boost from builders, manufacturing and the telecoms sector helped the country avoid a recession, my colleague Larry Elliott reports. Despite fears that a combination of high inflation, strikes and financial turmoil would lead to falling output, figures from the Office for National Statistics (ONS) showed gross domestic product rose by 0.1% in the final three months of last year.
'Momentous economic moment' or no substitute for EU membership? - reaction mixed to news UK joining CPTPP
Here is some more reaction to the CPTPP announcement. As you can see, responses are mixed.
The Liberal Democrats say this will not repair the damage done to the economy by the Tories. Sarah Green, the party’s international trade spokesperson, said:
The Conservatives have trashed the British economy with GDP stagnant and this announcement will not even repair a fraction of their damage.
People need help with soaring energy bills not empty promises years down the line.
The NFU (National Farmer’s Union) says this is better than previous post-Brexit trade deal. Minette Batters, the NFU president, says:
Compared to the deals struck with Australia and New Zealand, I am pleased to see that the prime minister has stuck to his word and the government has negotiated a far more considered and balanced outcome, particularly with respect to managing market access in our most vulnerable sectors. I will continue to press government to ensure its domestic policies are aimed at improving the competitiveness of British farming and strengthening our domestic food security.
The Institute of Economic Affairs, a free-market thinktank, says this is a “momentous economic and strategic moment”. Mark Littlewood, its director, says:
Joining this trade bloc is a momentous economic and strategic moment. Membership places Britain in a group of nations powering the world’s future prosperity. This partnership serves as an important bulwark of free exchange at a time when protectionism and trade wars are on the rise across the globe.
Accession opens up markets for British companies by cutting tariffs for exporters like the Scottish whisky industry, slashing red tape for trade in services and enabling greater data flows for digital trade. It also means cheaper imports for British consumers, including fruit from Peru and confectionary from Mexico.
The benefits to Britain will likely be significantly greater than some official estimates driven by static economic models.
Best for Britain (which describes itself as an internationalist group, but which is best understood as a legacy remain campaign) is not impressed. It has released this statement from the Green MP Caroline Lucas, who sits on its trade and business commission. She says:
When it comes to trade, distance matters. Not only will joining this bloc fail to replace trade we have lost with our closest neighbours, stretching supply chains makes a mockery of our climate commitments and will undercut environmental and food standards in the UK.
Labour says ministers need to provide assurances about CPTPP trade deal as TUC says it's 'terrible news' for workers
The Labour party has issued a relatively neutral response to the CPTPP announcement. It is not against but it is says the government needs to provide assurances about the terms of the deal.
In his statement Nick Thomas-Symonds, the shadow international trade secretary, said:
It is encouraging that there has been progress in the CPTPP accession process. The Labour party is a pro-trade, pro-business and pro-worker party and we are determined to open up new markets for UK businesses.
However, as so often with this Conservative government, the devil is in the detail. Ministers need to provide answers on vital issues, including on consumer safety, food safety, data protection and environmental protections. The Conservative government’s track record in striking good trade deals is desperately poor, with their own prime minister and MPs criticising the deal they struck with Australia. They also need to set out clear evidence to show that this does nothing to undermine the Windsor framework.
Other countries joining CPTPP arrangements have secured important safeguards and put in place support for their producers: it is vital that ministers set out if they plan to do the same. UK trade policy must promote democracy, workers’ rights and environmental protections worldwide, including through supply chains.
Yesterday the TUC described the deal as “terrible news” for workers in Britain and around the world. It said that deal includes countries that ban trade unions, and that it would include investor-state dispute settlement provisions (aka “secret courts”) that can enable investors to seek compensation in some circumstances if they lose out as a result of policy decisions.
The UK is joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
— Trades Union Congress (@The_TUC) March 30, 2023
That's terrible news for workers here and across the world.
THREAD 🧵
Exploitation is widespread in countries involved in the pact.
— Trades Union Congress (@The_TUC) March 30, 2023
Trade unions are banned in Brunei and Vietnam, and Malaysian migrant workers are subject to forced labour.
This deal allows corporations to sue the UK government in secret courts for threatening their profits with policies such as the minimum wage or public ownership of energy companies.
— Trades Union Congress (@The_TUC) March 30, 2023
The government is turning a blind eye to egregious rights abuses in pursuit of trade deals.
— Trades Union Congress (@The_TUC) March 30, 2023
Today we are a testing a new feature on the blog – the “send us a message” option. You’ll see it just below the byline – on the left of the screen, if you are reading on a PC or a laptop. (It is not available on the app yet.)
This is for people who want to message me directly. Normally I see messages by scanning in the comments below the line, but that is not an efficient system because we get so many.
I find it very useful when people message to point out errors (even typos – no mistake is too small to correct). Often I find your questions very interesting too. I can’t promise to reply to them all, but I will try to reply to as many as I can, either in the comments below the line, privately (if you leave an email address and that seems more appropriate), or in the main blog, if I think it is a topic of wide interest.
Updated
Badenoch hails Asia-Pacific trade deal and dismisses claims it will only boost economy by 0.08%
Good morning. The globalist, economic case for Brexit (there were other arguments too, but this is the one that swayed Rishi Sunak) was based on the idea that the importance of the EU in global trade was declining over time and that the UK would benefit by hitching its wagon to other economies, particularly in the developing world. For a long time the free-trade Brexiters were investing all their hopes in a deal with the US. That is now off the table, but perhaps the next biggest prize in their eyes was joining the Asia-Pacific CPTPP trade bloc, and this morning that has landed.
Kemi Badenoch, the business and trade secretary, tweeted about it in the early hours of the morning.
🌏It’s nearly 1am UK time and my counterparts and I have only just officially concluded negotiations to join the #CPTPP bloc!
— Kemi Badenoch (@KemiBadenoch) March 30, 2023
Fantastic news for 🇬🇧UK business & consumers as we increase trade with the dynamic Indo-Pacific region providing the future of global GDP growth📈 pic.twitter.com/DuxDUxrqce
Phillip Inman has the details in our story here.
No one in government is pretending that this in anyway compensates for the trade impact of Brexit – which, according to the Office for Budget Responsibility, will reduce GDP by 4% in the long run compared to what would have happened if the UK had not left the EU – and Phillip quotes the figures that show why.
The government said the deal, which will cut tariffs on exports of food, drink and cars, would generate £1.8bn of extra income once it had been up and running for 10 years, which is about 0.08% of the UK’s annual gross national product (GDP).
The main BBC website story on the deal currently has this figure in its headline (“UK-Asia trade deal to boost UK economy by 0.08%”), which is probably not the line No 10 would have chosen.
In interviews this morning, Badenoch played down the significance of the 0.08% figure. She told Times Radio that this figure for the value of the deal was based on a “scoping assessment done two years ago based on 2014 figures, showing what we would get immediately … It doesn’t look at what global trade is today.” She went on:
What we do with each new trade deal is add elements to the one present before. So 99% of goods exported to CPTPP countries are now eligible for zero tariffs. That wasn’t in the previous trade deals that we had with those countries. It could lead to a £1.7 billion increase in UK exports.
But also remember there are lots of other countries that are in the queue to join. So we’ve got in early and we will be able to have a say in shaping the bloc.”
This is not a deal about tomorrow. It’s a deal about the future.
Parliament is in recess today, and so there is not a lot in the diary. But Sunak and Keir Starmer are both doing local election-related visits this morning, in Darlington and Plymouth respectively, and they will be doing broadcast interviews.
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