Good afternoon. As engrossing as our election run-up is, it’s worth taking a look at the results from an election we used to be involved in, and which still has implications for all our politics.
More than 360 million Europeans voted for 720 MEPs last weekend, and the results have destroyed the confidence of the centre ground. While the centre-right European People’s Party (EPP) held relatively strong, with the largest number of seats at 185, the right and far-right combination of the European Conservatives and Reformists Party (ECR) and Identity and Democracy Party (ID) made gains. And while the left and soft left have held their ground, support for the Greens and Renew, the pro-Europeans, has cratered – they lost a third and a quarter of their seats, respectively.
Emmanuel Macron took it hard, and announced a snap election. That alone is pretty chastening for the UK. He can’t realistically have been looking at Rishi Sunak, thinking “surprise elections look like a good idea” – he probably doesn’t think about Britain very often at all. Centrist French voters are now under pressure to vote the right way to keep Marine Le Pen’s Rassemblement National (RN) out of overall control; they won 30% of the vote in the European elections, which is an unprecedented share for the hard right.
Belgian prime minister Alexander De Croo resigned, hopeless in the face of the surge of the far-right, anti-immigration Vlaams Belang party and the right-wing nationalist New Flemish Alliance (N-VA). Far-right parties also made gains in Italy, Austria and Germany. Meanwhile, in the UK, Reform continue to creep up in the polls.
We’ll have more on what all this means, after the headlines.
What happened today
Liberal Democrats | The party was first to launch its manifesto, promising huge improvements to care from the cradle to the grave. They’ll end the crisis in the NHS and social care; support unpaid carers; invest in early years and schools. Almost all the policies, bar some on transport and rural affairs, focus on the issue of care, paid for predominantly with taxes on corporations, the super-rich, and some from capital gains tax changes.
ReformCon | As Reform numbers climb and Conservatives take fright, the debate has turned to cooperation, albeit in bitter terms. Suella Braverman wants to see Nigel Farage back in the fold, saying their policies are “not that different”. Many Tories, notably Kemi Badenoch, forcefully disagree. Farage has invited Braverman to join Reform.
Labour | Keir Starmer took part in an arts and crafts session at a primary school, flagging the promise in their manifesto – expected Thursday – of 100,000 extra childcare places.
Analysis: A rejection of the European project?
While the rise of the right and far-right in Europe has plainly destroyed the confidence of many centrist governments, it is not an enormous surprise to commentators. It has come particularly at the expense of the Greens, which has caused dismay among climate activists, and indeed, all of those who have taken hope from the EU’s commitment to a green energy transition.
Many put the fault with the German finance ministry, for ruling out any common borrowing in the union. Inevitably, that means any money for a green new deal must come from tax, and, in the midst of a cost-of-living crisis, populist parties arguing against the need for such a transition are getting a much more sympathetic hearing than they would have previously. German local elections occurred at the same time, and the contrast between what used to be West and East Germany is stark: the former West voted entirely for the centre-right Christian Democratic Union (CDU), the former East, almost entirely for the hard-right AfD (Alternativ für Deutschland). Some situate this polarisation in the relatively lower living standards that persist in the East, others warn of Russian influence there.
The other galvanising issue of the right and hard-right parties tends to be hostility towards the EU and a rejection of the European project itself. This might give those remainers among us some consolation: if Brexit were the canary in the coalmine for a structural shift that then caught up with the continent, one might perhaps feel slightly less despondent, or at least less alone.
An alternative reading, of course, is that we were the testbed for hard-right narratives that found a useful enemy in what were previously viewed as benign institutions of international cooperation, the proving ground which has unleashed and emboldened similar forces in nearby nations. That might make one feel slightly more despondent.
Economists draw a contrast between the current deadlock – where large and expensive policies are proposed, but no common borrowing is available to pay for them – and the European Corona bond, in which European governments came together to meet the crisis of the pandemic, in such a way that spurred investment and didn’t increase taxes. Without similar political will to meet the promises on climate, it is unlikely that they will survive, as national governments struggle to fight off the allure of populists. Whether that political will materialises, it is unlikely to come soon enough for Macron, who will be going to the polls on the eve of the Paris Olympics.
Depending on the US results in November, Keir Starmer could end up the left-wing firebrand of the OECD. So that would be a turn up for the books.
What’s at stake
Nobody needs reminding of the housing crisis in this election. Between rents outpacing earnings at a striking rate, mortgage repayments still sky high after Liz Truss’s disastrous time in office, councils relying on temporary accommodation and global investment companies buying up shared ownership properties, the picture is hardly rosy.
However, our exclusive report on London local authorities rehousing people hundreds of miles out of borough is still chilling.
Sammy Gecsoyler writes:
Hundreds of homeless families were permanently forced out of London by councils last year after many were given 24-hour ultimatums to either accept a private tenancy far away from the capital or be kicked out of temporary accommodation and left on the streets.
The campaign group Housing Action Southwark and Lambeth (HASL) found that 319 households in 2023 accepted offers of a private tenancy outside London. They were often given 24 hours by council officials to accept homes out of the capital or risk making themselves “intentionally homeless” by refusing an offer.
One in 10 households who accepted these offers were placed in the north-east in towns such as Hartlepool and Durham, and two in 10 were sent to the Midlands. The Midlands has been a popular place for London councils to privately discharge homeless families since 2017, but similar placements in the north-east are a recent trend.
Winner of the day
Ian Gribbin | The Reform UK candidate for Bexhill and Battle claimed the country would be “far better” if it had “taken Hitler up on his offer of neutrality” instead of fighting the Nazis in the second world war. It’s not winning in the conventional sense, but it’s one way to make a splash, and he had support from his party.
Loser of the day
Rishi Sunak | The prime minister made his first media appearance in days in a garden centre in Horsham. It should have been so easy, in these Tory heartlands – a little light questioning about weed killer. Instead, he was denying that he should resign.
Timeline cleanse of the day
The law came into force today that cats must be microchipped, or owners will face a £500 fine. It is not a particularly feelgood piece of legislation, and it was surely not intended to fall in the middle of the election campaign, but it does, for people who like that sort of thing, give you an excuse to look at cats.
Quote of the day
It is always tempting for a government to go to tax and spend, but I’m not going to pull those levers. We don’t intend to pull those levers. We want to go to the lever marked growth.”
Keir Starmer
Number of the day
***
8,000
The number of new police officers, pledged by the Conservatives, in the event of their victory. The prime minister surprised onlookers when he announced out of nowhere that criminals should receive “no mercy”, leading to the inevitable Labour riposte: “Says the man fined for breaking the law twice”.
Dubious photo opportunity of the day
Ed Davey obviously considered his waterslide escapade a success: his first stop after the manifesto launch was Thorpe Park, on a big boy ride, flanked by Sarah Olney and Munira Wilson.
Andrew Sparrow explains it all
The pick of the posts from the king of the live blogs
14.29 | A reader asks:
Farage said that the Treasury should stop paying interest on it’s reserves. What does that mean and what are the implications? Is it mad?
Not entirely. Chris Giles, the chief economic commentor at the Financial Times, has proposed a version of this idea, although he argues that it would free up around £23bn for more public spending, not the £40bn quoted by Reform UK. This is how he explained it in an FT column last week.
At present the BoE pays 5.25 per cent interest overnight on the money it created to buy government bonds under multiple waves of quantitative easing since 2009. It still holds roughly £700bn of bonds that were purchased and they earn a return of about 2 per cent. Netted off, the annual interest rate loss is around £23bn a year, a little shy of 1 per cent of GDP.
The central bank pays 5.25 per cent on reserves so that it can set the short-term policy interest rate at that level. It is effective, but not the only way to control short-term rates.
Instead, it could require banks to hold a fixed amount of money without interest, paying 5.25 per cent only on a small part of the reserves. Such tiering is used in a modest form by the European Central Bank, in a more substantial form in many emerging economies and was admitted to the BoE’s toolkit when it was thinking about setting a negative interest rate earlier this decade. It carries no threat to independent monetary policy and would limit the fiscal consequences of monetary policy decisions, arguably enhancing independence. The beneficial politics of such a move are obvious. If the BoE tiered reserves, saving some of the £23bn annual cost, it would lower measured public spending (net interest payments), allowing a new government to increase spending in other areas without raising measured taxes or borrowing. The opacity of the mechanism might be bad economics but it would help the politics: it is better to lack transparency in government than to underfund public services.
In his column Giles argued this was a policy Labour should adopt. In a series of posts on X, he revealed he was a bit shocked to find he was aligned with Reform UK on this, and said he thought they were overestimating how much this would raise, but that it was still a good idea.
And he did point out, in his column, that there would be losers: banks, their shareholders and their customers.
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Politics Weekly Westminster: Manifesto week
The Guardian’s Pippa Crerar and Kiran Stacey look at what might be on offer as the political parties launch their manifestos this week. Plus, what Pippa learned from her exclusive interview with Keir Starmer.
What’s on the grid
8pm | Rishi Sunak will be on BBC One, talking to Nick Robinson in the first of Panorama’s interviews with party leaders.
Tuesday 11.30am | The Conservative party manifesto launch. Apparently it runs to a whopping 72 pages …
