Afternoon summary
Keir Starmer has visited Southport, where he thanked emergency workers who responded to the knife attack yesterday in which three young girls were killed. There is more coverage of this on our separate live blog.
Jason Groves from the Daily Mail has been looking in detail at the housing targets the government might set for some local authorities under the new system announced by Angela Rayner. (See 1.10pm.)
Eye-popping new housing targets published by Angela Rayner for some parts of the country. Fareham, in Hampshire (local MP Suella Braverman), currently builds 115 new homes a year, and will be ordered to up this to 794 - a near sevenfold increase
— Jason Groves (@JasonGroves1) July 30, 2024
Eye-popping new housing targets published by Angela Rayner for some parts of the country. Fareham, in Hampshire (local MP Suella Braverman), currently builds 115 new homes a year, and will be ordered to up this to 794 - a near sevenfold increase
Tory thinktank welcomes Rayner's plans to build more homes
The Centre for Policy Studies, which is a Tory thinktank but one that frequently complained about the last Conservative government not doing enough to promote housebuilding, has welcomed Angela Rayner’s housing/planning statement.
Robert Colvile, its director, said:
This announcement contains some overwhelmingly positive changes, many of which the Centre for Policy Studies and others have been calling for for some time. Reviewing green belt land, streamlining planning, forcing local authorities to have up-to-date local plans and restoring the presumption in favour of sustainable development will help unlock additional housebuilding across the country.
Of course the devil is in the detail. Alarm bells should be ringing about scaling back our ambitions for building in London, where the housing crisis is most acute, and the requirement for at least 50% of new homes in the green belt to be affordable looks to be extremely tough to achieve, and will result in fewer houses being built.
Overall, however, the new government should be applauded for its determination to increase the number of homes being built, and help address the root causes of Britain’s housing crisis.
YouGov has released polling suggesting that, by a margin of 47% to 38%, people support the government’s plan to means-test the winter fuel payment.
As Aubrey Allegretti from the Times points out, the draft version of the new national planning policy framework (NPPF) on the Ministry of Housing’s website includes track changes.
It shows the word beauty or beautiful removed seven times in relation to what homes or places should look like. Allegretti says this is intentional; the department wants to show what it is changing.
It seems MHCLG have uploaded a version of the NPPF that shows up 'track changes'.
— Aubrey Allegretti (@breeallegretti) July 30, 2024
The word "beautiful" or "beauty" was removed seven times. Including in this section header... pic.twitter.com/9mvQHK7OYP
Housing industry welcomes Rayner's plans, but some experts say her 'tweaks' not enough to meet building targets
The Angela Rayner housing/planning announcement has been warmly welcomed by organisations representing the housing/property industry. The press release from her deparment includes 20 quotes from trade organisations, companies and thinktanks working in this field which are all supportive. Government press officers like to include quotes from “stakeholders” in announcements like this, but it is rare to get so many.
The organisations quoted include the Home Builders Federation, the National Housing Federation, the Association of Directors of Environment, Economy, Planning and Transport, the National Infrastructure Planning Association and British Property Federation.
But some figures in the housing world have said Rayner should have gone further. Here are three examples.
Richard Beresford, chief executive of the National Federation of Builders (NFB), said the “tweaks” announced by Rayner were not enough to make a big difference. He said:
The government are reintroducing the policies which ensured the Conservatives broke the 200,000 new homes a year mark, plus adding some extra dimensions, such as the grey belt, strategic planning and redefining how some of the greybelt is used.
It’s certainly a positive start but if the government is serious about building 300,000 homes a year, or 370,000 as we heard today, these tweaks will not cut it and we need major reform which explores what the barriers are, not just to local plans and permissions but the rules stopping spades going in the ground.
David Crosthwaite, chief economist at the Building Cost Information Service, a consultancy providing information for people in the building industry, said:
Since the vast majority of new homes are built by private property developers who control the supply to maximise their returns, it’s difficult to see how Labour will achieve its ambitious housebuilding targets.
Over the last few decades, many governments have tried to influence the number of new homes being built, but most have failed.
They have no lever to control the supply since flooding the market with new homes would not be in the best interest of property developers, or existing homeowners, as carefully controlled supply maintains price levels.
The only way the government could really influence supply would be to build themselves, which they used to do when local authorities employed direct labour to build social housing. This option seems unlikely given the current state of public finances.
(This is similar to the argument made by the Green party – see 3.12pm.)
And Jonathan Cox, a partner at Anthony Collins, a law firm specialising in social housing and local government work, said:
This announcement confirms the government’s intention to press ahead with planning and land development policy changes to increase the supply of affordable homes to rent and buy. In particular, the move to recruit more planning officers, will speed up planning decisions and help schemes to get underway more quickly.
Simply piling yet more pressure onto local authorities by increasing mandatory housebuilding targets won’t work, however. Social housing providers are already deeply concerned about the impact of regulatory pressures such as Awaab’s Law and new consumer standards, which are placing them under significant financial pressure. Many are simply unable to fund the upgrades required so it is crucial the sector has the financial capacity to meet the government’s worthy development intentions.
A more holistic solution is needed to address the housing shortage and facilitate more social housing development. For example, among the measures needed are addressing skills shortages in the building industry, requiring developers to fully build out when planning permission is granted (or see their planning lapse) and councils working with social housing providers to use new compulsory purchase order (CPO) rules to compensate based on current use of land only, without the hope value.
Updated
Rayner says government wants 'universal system of strategic planning' for England and further plans to be unveiled
Angela Rayner announced a wide range of measures in her statement on planning and housing today. There is a summary in the news release here, and other documents have been published too.
But one of the most intriguing lines is about something not being announced today, or at least not in full. The Ministry of Housing says it wants to introduce “a universal system of strategic planning across England in this parliament, underpinned by the necessary legislation, that will deliver on the manifesto commitment to plan for growth on a larger than local scale”.
It says in its consulation it is proposing some changes today to the nationally significant infrastructure projects (NSIPs) regime, but that this is just a “first step” and that further reforms are planned.
Commenting on this proposal, Charlie Reid, a planning partner at the law firm Ashurst said:
The NSIPs regime has slowed down in recent years and various initiatives have already been introduced to speed it up. The government had expressed a desire to further streamline the system but seems to be keeping its powder dry as to how it is going to go about achieving this.
The intention to introduce “a universal system of strategic planning across England” is also eye-catching and moves away from the previous Government’s localism agenda.
Scottish government unable to say if winter fuel payment will remain as universal benefit in Scotland
A few weeks into the “reset” of relations between Holyrood and Westminster promised by the new Labour government, the Scottish government has branded the chancellor’s statement “deeply disappointing” in its lack of consultation over the winter fuel payment.
Yesterday Rachel Reeves announced that the winter fuel payment would become means-tested as part of a raft of measures to shore up public finances. But the impact on Scotland is complicated by the fact that this beneft was set to be devolved to this winter.
The Scottish government’s public finance minister Ivan McKee told BBC Scotland that his government was expecting £180m to fund their equivalent payment, but that the decision to limit it to means-testing in England and Wales would result in an estimated £100m shortfall.
There’s now uncertainty whether the payment can continue as universal in Scotland. Asked if it would have to be means-tested, McKee replied: “Who knows?” He also complained that his government had been notified of the change only 90 minutes before Reeves’ statement.
But Scottish secretary Ian Murray said market sensitive information could be expected to be communicated in short order, and insisted it was not the case that the Scottish Government would receive a smaller settlement as a result of the announcement.
How this row unravels will be an early indication of how deep the promised change in style and substance of Westminster-Holyrood relations runs for both governments. A common theme amongst voters during the election campaign was how off-putting the SNP’s constant blaming of Westminster had become, so that presents a particular challenge as they mould relations with the new Labour government.
Updated
Lammy urges Britons in Lebanon to leave or risk being trapped in warzone
Thousands of UK nationals risk “becoming trapped in a warzone” if they fail to leave Lebanon, David Lammy has said.
In a statement in the Commons, the foreign secretary issued a one-word message to British nationals in the country: “Leave.”
He confirmed Keir Starmer had chaired a Cobra emergency meeting on Tuesday amid tensions in the Middle East.
After describing the Hezbollah rocket attack on the Israeli-occupied Golan Heights, Lammy said:
The prime minister chaired a Cobra meeting this morning and I’m working with Foreign Office consular teams to make sure we are prepared for all scenarios, but if this conflict escalates, the government cannot guarantee we’ll be able to evacuate everyone immediately.
People may be forced to shelter in place and history teaches us that in a crisis like this one, it is far safer to leave while commercial flights are still running rather than running the risk of becoming trapped in a warzone.
My message, then, to British nationals in Lebanon is therefore quite simple: leave.
How changes to way housing targets are set would affect regions in England
The Ministry of Housing has now published online the new planning policy documents announced by Angela Rayner.
Here is the draft new national policy planning framework (NPPF).
Here is the consultation on the new NPPF.
Here is a table showing what the new housing targets might be authority by authority based on the new formula Rayner is proposing. (See 1.10pm.)
And here is a chart from that document, showing how targets change region by region.
Updated
Greens say Labour should focus more on new council homes because developers won't deliver enough affordable housing
Adrian Ramsay, the co-leader of the Green party, has said that Angela Rayner’s plan to build more affordable homes is flawed because it does not incentivise developers. He said:
We are in a housing crisis that leaves many without the basic security of a safe and warm home.
This crisis though is an affordability crisis. There are a million empty homes, and a million homes that planners have allowed but developers haven’t built - too often in order keep prices high. Meanwhile, we have over a million households on council waiting lists and more than 130,000 children are growing up in temporary accommodation.
This is why Labour’s plan to hand more power and profits to private developers is flawed. Where is the incentive for private developers to build the affordable and accessible homes needed? Instead, we will get large executive houses on greenfield sites or luxury city flats.
Planning reform is a distraction from Labour’s failure to step up and fund the real answers to the housing crisis, including large-scale investment in truly affordable, sustainable council housing.
Updated
Reeves challenged to explain why she said 22% pay rise for junior doctors cost 5 times less than DHSC said it would
Victoria Atkins, health secretary before the election and now Tory health spokesperson, has challenged Rachel Reeves to explain why the figure she gave for the cost of the 22% pay rise for junior doctors is so much lower than a previous government estimate.
In an interview with Times Radio this morning, Reeves claimed funding the pay rise would cost just £350m. (See 9.07am.) But in response to a Commons written question in May, Andrew Stephenson, a Tory health minister, said a 20% pay rise would cost £1.7bn.
Atkins said:
The chancellor must urgently come forward and tell taxpayers how much of their money she has chosen to spend on a backdated 22% pay rise for junior doctors, whilst cancelling key projects like hospitals and roads and scrapping winter fuel payments for vulnerable pensioners.
Just two months ago, the Department of Health costed a 20% pay rise for junior doctors at £1.7bn of taxpayers’ money. The chancellor must clarify this.
If she does not, the public will see this for exactly what it is – a ploy to get them to accept Labour’s tax rises.
The Treasury has been asked to explain why Reeves’s figure is about five times lower than the Department of Health and Social Care (DHSC) said it should be. I’ll post their reply when I get it.
UPDATE: The Treasury says the £350m figure that Reeves was quoting was the extra cost of the pay deal for junior doctors, on top of what it would cost to implement the pay review body recommendations for them.
Updated
John Whittingdale (Con) asks what will be done to ensure proper infrastructure is in place before new homes are build in his Maldon constituency in Essex.
Rayner says the last Conservative government had 14 years to address this. She says the government will ensure that infrastructure is in place.
Here is the Ministry of Housing’s news release about the measures announced by Rayner today.
Here is a shorter briefing on the plans.
How Rayner defines the 'golden rules' to be used to decide if housing can be built on green belt
Rayner has told MPs that building on the green belt will only be allowed subject to the government’s “golden rules”.
This is how the Ministry of Housing defines the golden rules.
Grey belt sites will only be built on if they meet the Government’s ‘golden rules’ that half of homes are affordable, the plans enhance the local environment and the necessary infrastructure is in place, such as schools and GP surgeries.
I have updated some of the earlier posts covering Angela Rayner’s opening statements with longer, direct quotes. You may need to refresh the page to get those updates to show up.
Lee Anderson (Reform UK) says Rayner is an expert on council homes. He asks if families, pensioners and veterans will get priority for council homes.
Rayner says the government will ensure local people get priority. It is applying a “first dibs” policy.
And she says that, although Anderson is making a joke about her growing up in a council home, he should recognise that now there are many families would would feel they had “won the lottery” if they were to get a council home.
Jo White (Lab) says in her Bassetlaw constituency the council was the first one to use funds from section 106 orders to help fund a local hospital. What can be done to get other councils to use orders in this kind of way?
Rayner says she wants councils to get the resources they need so they can get the best out of section 106 orders.
Mark Francois (Con) says successful development should be done with communities, not to communities. He says all experience shows that, with housing, the man in Whitehall does not know best. Why is Rayner going back to the old system?
Rayner says having national targets is not a new idea. The targets will be based on need. There is a need for housing, and that is why Labour won the election, she says.
She says Francois should listen to the people in his constituency “desperate for a home”.
Rayner cuts new homes target for London from 100,000 per year to 80,000
In her opening statement Angela Rayner said the government is cutting the housing target for London, from 100,000 new homes a year to 80,000. She said the previous target was unrealistic.
Addressing objections to her plan, she said:
To this I say we have a housing crisis and a mandate for real change, and we all must play our part.
Second, that some areas might appear to get a surprising target – well, no method is perfect and the old one produced all sorts of odd outcomes. Crucially, ours offers extra stability for local authorities.
Third, that we are lowering our ambition for London. I’m clear we’re doing no such thing. That London had a nominal target of almost 100,000-homes-a-year based on an arbitrary uplift was absolute nonsense. The adoption of the London plan has a target of around 52,000 and delivery in London last year was around 35,000.
The target we’re now setting for London – roughly 80,000 – is still a huge ask but I know it’s one that the mayor is determined to rise to and I met with him last week about this.
Fourth, some will say a total of 370,000 is not enough. To this I say ambition is critical but we also need to be realistic.
Paul Holmes (Con) says he thinks this will be a disaster for his constituents in Hamble Valley. He asks if homes built in the past will count towards housing targets.
Rayner says the country does not have the number of homes it needs. She urges Holmes to work with his council to ensure it gets the houses residents need.
Updated
Rayner says the government supports right to buy. But she says discounts are too generous, because they mean councils cannot replace the stock that is lost.
Rachel Hopkins (Lab) asks if the government is prioritising good value, family houses.
Rayner says it is essential to have more social housing for rent. There is a supply problem, she says. That is why the government is strengthening section 106 orders, she says.
Daisy Cooper, the Lib Dem deputy leader, says she has many questions about the statement.
What will happen to councils that are working on a new development plan? Will they have to start again, using the new terms?
Will the government accept the Lib Dem target for 150,000 new social homes ever year?
On plans, Rayner says there will be a transition. “It will depend where they are up to.” She says one third of areas have up-to-date local plans. MPs should encourage councils to get one if they don’t have one now.
On social homes, she says there is more detail in the document out today.
Planning teams are being strengthened, she says.
Rayner says councils have been left in a disastrous situation because the last government did not build the homes needed. The government will fix that, she says.
Rayner accuses Badenoch of not understanding why Tories lost election, with housing key factor
Rayner starts by wishing Badenoch luck with her leadership bid. She says it was Badenoch’s ambition to be leader of the opposition, not hers.
She says she thinks there are a few things Badenoch “has not understood”.
One is that the Tories lost the election. Another is that they left services in a mess, including failing to meet their housing targets.
She says the Conservatives '“are talking to themselves, not the country”.
Kemi Badenoch, the shadow housing secretary and Tory leadership candidate, is responding for the opposition.
She says Rayner may not be able to answer all her questions now. But she expects her to provide written anwers before the end of the summer.
She says, as a party that has governed for most of the past century, the Conservative party accepts Labour has the right to govern. But they should not break their commitments.
Labour said they would update the NPPF [national planning policy framework] within 100 days. But now they are saying it will happen by the end of the year, she says.
But Badenoch goes on to question if Labour is allowing enough time for consultation on some of the changes it is making.
Badenoch says Rayner is reducing the housing need calculation for London. But cities like London have the infrastructure to deal with more houses, she says.
She says Rayner is restricting the right to buy. But Rayner used the right to buy herself. Will she confirm that young people will still be able to do what she did?
She asks what will happen if mayors like Sadiq Khan do not build as many homes as promised.
And she asks why the government is removing a condition intended to ensure that new homes are beautiful.
Housebuilding targets could force councils in England to build on ‘grey belt’, Rayner says
Here is Peter Walker’s story about the announcement from Angela Rayner.
Rayner says in the coming months she will publish a long-term housing strategy.
She says Tory MPs may claim that she cannot achieve this. But she will prove them wrong, she says.
Rayner says she will hold herself accountable. She will report how well ministers are doing in meeting the 13-week target for turning around planning decisions.
Rayner says the housing reforms are key to the government’s wider growth ambitions.
She says planning rules are being changed to promote more renewable energy projects.
All local authorities must have a development plan in place, she says.
She says she will set clear expectations for universal development plan coverage.
Rayner says she is looking at right to buy too.
She is already reviewing right to buy discounts, and will consider wider right to buy policy too.
Rayner says she wants developers to commit to matching the government’s pace of reform.
She says she wants “a council house revolution”.
This is not an add-on, she says. She says schemes with a lot of social housing are more likely to be completed more quickly.
She says 70,000 families would be losing out as a result of the previous government’s failure to build enough social housing.
Rayner says the first places where homes must be build should be on brownfield land.
But more green belt land must be released too, she says.
She says low-quality grey belt land must be released. A definition is being released today.
And where this land is released, 50% of it should be for social housing, she says.
Rayner says new housing target system will raise number of homes planned from 300,000 per year to 370,000
Rayner confirms that local housing targets will be made mandatory.
And the method used to calculate local housing need will be changed.
Local authorities will have to plan for a total of new homes proportionate to local communities.
As a result, the number of new homes planned will rise from 300,000 a year to 370,000 a year.
UPDATE: Rayner said:
Decisions about what to build should reflect local views… well, that should be about how to deliver new homes, not whether to.
Whilst the previous government watered down housing targets, caving into their anti-growth backbenchers, this Labour government is taking the tough choices putting people and country first.
For the first time we will make local housing targets mandatory, requiring local authorities to use the same method to work out how many homes to build. But that alone is insufficient to meet our ambition, so we’re also changing the standard method used to calculate housing need so it better reflects the urgency of supply for local areas.
Rather than relying on outdated data, this new method will require local authorities to plan for homes proportionate to the size of existing communities, and it will incorporate an uplift where house prices are most out of step with local incomes.
The collective total of these local targets will therefore rise from some 300,000 a year to just over 370,000 a year.
Updated
Rayner says the government is ambitious. But what she says “won’t be without controversy”, she says.
She says 150,000 children live in temporary accommodation.
Under 30s are half as likely to own their own home as in the 1990s.
Homelessness is at record levels, she says.
But the Tories “ducked the difficult decisions”, she says. They put “party before country”.
She says the Tories made housing targets advisable, not mandatory, even though this would tank housing supply.
And she says the number of new homes is below 200,000.
UPDATE: Rayner said:
There are simply not enough homes. Those on the benches opposite knew this but what did they do for 14 years? As [Rachel Reeves] said yesterday they ducked the difficult decisions. They put party before country.
They pulled the wool over people’s eyes by crowing about getting one million new homes in the last parliament but they failed to get anywhere near their target 300,000 homes a year and, in a bid to appease their anti-housing backbenchers, they made housing targets only advisable.
They knew that this would tank housing supply, but they still did it.
And as I stand here today, I can now reveal the result. That the number of new homes is now likely to drop below 200,000 this year – unforgivable.
This legacy makes our job all the harder, but it also makes it so much more urgent.
Updated
Angela Rayner's statement to MPs about planning policy
Angela Rayner, the deputy PM and housing secretary, is making a statement to MPs on housing and planning.
She starts by saying the statement is about her plan “to get Britain building”.
Jonathan Reynolds, the business secretary, has confirmed that he has written to the Low Pay Commission asking it to ensure that it takes cost of living factors into account when it sets rates for the national minimum wage and the national living wage. He also confirmed that the government wants to set a single rate for adults (instead of having a higher rate for people aged 21 or over).
In a written ministerial statement, Reynolds said:
I have written to Baroness Stroud, the chair of the LPC, to set out an updated remit.
Following the cost of living crisis which has harmed working people in recent months and years, the remit asks the LPC to consider the cost of living for the first time. The remit highlights the need to also consider the impact on business, competitiveness, the labour market and the wider economy.
We are ambitious in developing a path towards a genuine living wage, but we know that this path must be backed by evidence and consistent with delivering inclusive growth for workers and businesses.
As part of the government’s commitment to a genuine living wage that benefits every adult worker, we also pledged to remove discriminatory age bands.
The Green party has criticised the government for cutting the winter fuel payment when it could have raised money by imposing higher taxes on the wealthy.
In a statement, Adrian Ramsay, the co-leader and Green MP, said:
Yesterday, Rachel Reeves engaged in a piece of political theatre to prepare the public for cuts and tax rises on those already struggling - the “tough decisions” Labour says it is being forced to make. Why is it that these “tough decisions” always land on the more vulnerable, and not those with the broadest shoulders?
In November last year, Labour MP Darren Jones said “Pensioners mustn’t be forced to bear the brunt of Tory economic failure.” He was right. In May this year, Keir Starmer asked Rishi Sunak to “rule out taking pensioners’ winter fuel payments off them to help fund his £46bn black hole”. Now the Labour government is doing just that, with a decision that threatens to leave up to two million financially struggling older people cold and at risk this winter.
There are other decisions - obvious decisions - the government could and should make to raise revenue for public investment, starting with a modest tax on the wealth of the very richest in our society. The chancellor rejected this idea out of hand when I asked her to consider it yesterday, but unless this government finds the courage to tax wealth fairly, it will never deliver the real hope and real change the public is craving.
It seems the government is committed to “tough decisions” for some, and business as usual for the wealthiest few.
Seema Malhotra, the immigration and citizenship minister, has announced that the government is extending the Afghan Citizens Resettlement Scheme (ACRS) so that Afghans who were evacuated to the UK when the Taliban took Kabul in August 2021, but who had to leave behind close family members, can now use the scheme to bring those relatives to this country.
In his interview with Times Radio Andrew Dilnot said the government would only save about £1bn in 2025-26 by abandoning the plan to impose a cap on social care costs. (See 11.36am.) He said he hoped the government would soon find an alternative way forward. He said:
This is an area where, working together, we can transform people’s lives and move the experience of needing social care from being one of deep anxiety and distress to being one that works for people …
This is another pretty tragic betrayal of another generation of families who thought that they were going to be looked after properly.
What we have to do now is build a consensus for some action and action quickly. So I think what I’ll be pressing for in the next few months is a rapid move towards working out what we’re going to do, because one thing we’ve definitely learned is if you don’t make plans for this at the beginning of a parliament, you don’t get around to doing it.
Andrew Dilnot says Labour has broken pre-election promise to implement cap on social care costs his report championed
Andrew Dilnot, the economist who produced the report saying adult social care costs should be capped, has accused the government of breaking a promise to implement the policy.
Speaking to Times Radio, he said that during the election campaign Wes Streeting, who was then shadow health secretary and who is now in charge of health in cabinet, said Labour would go ahead and introduce the cap, as planned by the Tories.
Dilnot first proposed a cap in a report published in 2011. Successive Tory governments delayed implementing this plan, but under Rishi Sunak the government was committed to bringing in the cap from October 2025. That would have imposed a cap of £86,000 on how much anyone would have to contribute to the cost of their own care during the course of their life.
In an interview with the BBC’s Laura Kuenssberg on 16 June, Streeting said he was committed to this policy. He told her:
One of the things that we’ve committed to is – obviously the cap on care costs is due to come in, I’ve wanted to give the system the certainty this side of the election of knowing we’re not planning to come in and upend that and scrap that.
When Kuenssberg asked him to confirm that Labour would stick to the plan set out by the Tories, and the October 2025 date, he replied:
Yeah, and I’ve met with Andrew Dilnot. What he set out is a framework that can also be adjusted to make it fair and more progressive when resources allow, but that is something that is already there. I’m not interested in tearing things down, until we’ve got something better to put in its place.
Dilnot told Times Radio this meant Labour had broken a promise made to voters. He said:
I think people have got a reasonable case for breach of promise.
Wes Streeting, who’s now the secretary of state for health and social care, in the run up to the election said one of the things that we’ve committed to is the cap on care costs, ‘I’ve wanted to give the system the certainty this side of the election.’
So they promised they’d do it. Now, of course, we could say that’s just politics. But if we can’t take seriously when members of the shadow cabinet become the members of the cabinet and have made a promise, what are we to do?
This allegation is serious because generally Labour was very careful about not making promises during the election campaign it did not intend to keep.
Although the Tories argue that, if Rachel Reeves raises taxes in the autumn budget, she will be breaking promises, Labour only made a firm commitment not to raise a limited number of taxes (principally income tax, national insurance and VAT). The Tories repeatedly highlighted the multiple taxes where Labour was not ruling out an increase.
They also criticised Labour for not ruling out means-testing winter fuel payments, which meant that when Reeves announced this yesterday, she could not be accused of breaking a pledge.
In his interview with Sky News this morning Jeremy Hunt, the shadow chancellor, said that it was “disappointing” that Rachel Reeves had called him a liar. Asked about her comment (see 8.06am), he told Sky:
I think it’s very disappointing that the new government is choosing to do politics this way. I think it actually discredits politics when people call each other liars.
I thought more highly of Rachel Reeves. I actually praised her on election night as being a committed civil servant. I think she can do better than that.
Electoral Commission reprimanded over data breach that left 40m people's data exposed to hackers
The Electoral Commission has been reprimanded over online security lapses which allowed a database containing details of 40 million voters to be hacked.
The Information Commissioner’s Office (ICO) issued a formal reprimand after it found that the Electoral Commission did not ensure its servers were kept up-to-date with the latest security updates.
Stephen Bonner, deputy commissioner at the ICO, said:
If the Electoral Commission had taken basic steps to protect its systems, such as effective security patching and password management, it is highly likely that this data breach would not have happened.
By not installing the latest security updates promptly, its systems were left exposed and vulnerable to hackers.
I know the headline figures of 40 million people affected caused considerable public alarm when news of this breach emerged last year. I want to reassure the public that while an unacceptably high number of people were impacted, we have no reason to believe any personal data was misused and we have found no evidence that any direct harm has been caused by this breach. The Electoral Commission has now taken the necessary steps to improve its security.
This action should serve as a reminder to all organisations that you must take proactive and preventative measures to ensure your systems are secure. Do you know if your organisation has installed the latest security updates? If not, then you jeopardise people’s personal information and risk enforcement action, including fines.
As PA Media reports, the data breach, which has been blamed by the government on Chinese hackers, occurred in August 2021 but was not identified until October 2022.
Updated
New redress scheme opens for post office operators affected by Horizon scandal
The new compensation scheme for post officer operators wrongly accused of stealing money because of the Horizon IT scandal is now open, the Department for Business and Trade has said.
In a news release, it says:
Postmasters whose convictions have been overturned by the Post Office Offences Act (including that passed by the Scottish Government) can now apply to a new redress scheme.
From today, postmasters are invited to come forward and register for the scheme, known as the Horizon Convictions Redress Scheme (HCRS). Once eligibility is confirmed the new scheme will provide swift and fair redress, allowing those affected to rebuild their lives …
Postmasters eligible can either accept a fixed settlement of £600,000 or those who believe their losses exceed that amount can choose a full claim assessment route. This will mean their application will be fully examined by a team of dedicated caseworkers in the Department for Business and Trade.
The scheme will be delivered by the Department for Business and Trade with a key aim of providing as much transparency as possible about how it will operate and how decisions will be taken on redress. Guidance has been published today which will allow postmasters to see how much redress they may be eligible for and what will be taken into account when assessing applications.
UPDATE: There are details of how to register for the scheme here.
Updated
These posts on X are from George Eaton from the New Statesman on the difference between George Osborne and Rachel Reeves.
Reeves rewarding a key voter constituency – public-sector workers - under the guise of austerity is Osborne-esque but definitely not Osbornite.
— George Eaton (@georgeeaton) July 30, 2024
Reeves rewarding a key voter constituency – public-sector workers - under the guise of austerity is Osborne-esque but definitely not Osbornite.
Osborne froze public sector pay and refused to means-test pensioner benefits. Reeves has done the opposite. It’s almost as if Labour and the Tories have different electoral coalitions…
Reeves refuses to say HS2 will definitely run to Euston station in London
In her interview with LBC this morning, Rachel Reeves, the chancellor, refused to say the HS2 high-speed rail line will definitely reach Euston station in London.
When Rishi Sunak axed plans for the Birmingham to Manchester phase of HS2 last year, he also left a question mark over the future of the final 4.5 mile stretch into Euston.
The line will definitely run from Birmingham to Old Oak Common, a station in west London. Sunak said he wanted the line to run to Euston, but the last link is dependent on the project securing private sector funding.
Asked if HS2 would definitely run to Euston, Reeves told LBC:
We will look at the details of all of the projects that we have inherited. But look, we’ve made some difficult decisions yesterday on road and rail.
Jeremy Hunt rejects claims about Tory overspending as 'absolute nonsense'
In interviews this morning Jeremy Hunt, the shadow chancellor, rejected Rachel Reeves’ claim that he left a £22bn black hole in the public finances.
Referring to the £6.4bn overspend on immigration and asylum measures, he claimed that this problem was known and that the Conservative government had a policy, the Rwanda plan, to deal with this.
Speaking to Sky News, he said:
We were warned by the Home Office, that the asylum bill could be up to £11bn a year by 2026 - that number was in the public domain.
And so we had a plan to deal with it. It was the Rwanda plan. What Labour did was they cancelled that plan on day one. As a result, all the money was spent on it without any of the benefits.
Referring to Reeves’s claim that the last government had spent the annual reserve three times over within the first three months of the financial year, he said that was “absolute nonsense”.
He went on:
We would have been able to live within our means. You can accuse me of making many mistakes, but not taking tough decisions on the public finances to make sure that they are in order is something that no one would accuse me of.
Reeves refuses to say if Labour will impose cap on adult social care costs before next election
Yesterday Rachel Reeves, the chancellor, said the government was shelving plans to impose a cap on the amount adults might have to pay for their own social care. This is something governments have been promising, but repeatedly delaying, since Andrew Dilnot recommended one in a report published in 2011.
The report published by the Treasury was unclear as to whether the plan was being shelved for good, or just for the foreseeable future. It said the government was “not proceeding with adult social care charging reforms” and went on:
The previous government committed to introduce these in October 2025 but did not put money aside for them. The reforms are now impossible to deliver in full to previously announced timeframes.
In her Today programme interview, asked if a cap would be imposed during this parliament (ie, before 2029), Reeves replied:
Wes Streeting [the health secretary] will work with the sector to now take forward plans to improve social care, and indeed to improve the crumbling state of our hospitals, because of the mess left by behind by the Conservative government.
But the worst thing that I could have done yesterday was to just accept that we were going to have to borrow £22bn more. That would have put at risk our economic and our financial stability.
We saw what happened when the previous prime minister, Liz Truss, did that. It resulted in pensions being put in peril, financial market turbulence and mortgage rates, interest rates and rents all going through the roof.
Reeves claims £350m cost of 22% pay rise for junior doctors 'drop in ocean' compared to overall cost of NHS strikes
In her interview on Times Radio this morning Rachel Reeves, the chancellor, said that funding the 22% pay rise for junior doctors would cost about £350m. She said that was “a drop in the ocean” compared to the £1.7bn direct costs of the NHS strikes. (See 8.16am.)
The £1.7bn figure is what the Treasury said in its document yesterday was the direct cost of strikes to the NHS. The report says the strikes also had a direct and indirect impact on the wider economy. It says:
Direct economic impacts. ONS GDP data covering previous strike days highlights lost activity across the health sector. In July 2023, one of the main contributors to the fall in monthly output was the human, health and social work activities sub-sector, which fell by 1.2%. This was attributed to a 2% fall in the human health activities industry amidst strike action from healthcare workers (senior doctors, radiographers and junior doctors).
Indirect economic impacts. There are also likely to be indirect economic effects from the impact of industrial action on health outcomes. The NHS elective waiting list in England reached a record high of 7.8 million in September 2023 up from 4.6 million in December 2019, in part exacerbated by industrial action. Over a similar period, ill-health related inactivity has increased sharply and has been the leading reason for rising economic inactivity, standing at a near-record 2.8 million people in the three months to May 2024. Analysis by the National Institute of Economic and Social Research has highlighted that the record size of healthcare waiting lists has likely contributed to the increase in ill-health related inactivity.
Balls, who, of course, is a former Labour cabinet minister, and a former shadow chancellor, questions whether Reeves is right to suggest that Jeremy Hunt is wholly to blame for the black hole. He says that other cabinet ministers and departments drew up the spending plans that she says were unfunded.
Reeves repeats the point she has been making all morning about how the public were misled. (See 8.06am.)
That is the end of the interview. But Balls goes on to say that “strictly speaking” Reeves was not right in how she is allocating blame. He says that, if civil servants are asked to approve something they think is improper, then can demand a ministerial direction (a written instruction, enabling them to show they raised objections in any future inquiry into whether public money was misspent).
The Home Office demanded a ministerial direction in relation to the Rwanda policy, but other policy decisions referenced by Reeves yesterday do not seem to have been covered by ministerial direction.
Reeves is asked about a letter sent by Darren Jones, the then shadow chief secretary to the Treasury, to the Treasury in November 2023 suggesting it would be wrong to means-test the winter fuel payment.
Here’s where it gets tricky: 7 months ago Darren Jones wrote to the Tories asking them to reassure pensioners that they wouldn’t means-test winter fuel payment… “Pensioners mustn’t be forced to bear the brunt of Tory economic failure,” he wrote… https://t.co/Qf0qvsL22E
— Alex Wickham (@alexwickham) July 29, 2024
Reeves says Labour has had to take decisions it did not want to take.
Rachel Reeves, the chancellor, is now being interviewed on ITV’s Good Morning Britain.
Asked about a message from a viewer complaining about the decision to cut the winter fuel payment, Reeves says she discovered a £22bn black hole in the public finances.
If she had not addressed that, it could have put the government’s finances in peril, in the way that Liz Truss did.
Ed Balls, on of the GMB presenters, asks her about the Daily Mail front page headline, saying old people will pay for Labour’s decisions.
MAIL: Two children dead in holiday club carnage #TomorrowsPapersToday pic.twitter.com/USyGajbPiN
— Neil Henderson (@hendopolis) July 29, 2024
Reeves says she is requiring efficiency savings. But she repeats the point about the £22bn black hole.
Husain asks about Hunt’s point about the estimates presented to parliament last week having different spending figures. (See 8.10am.)
Reeves says the estimates presented to parliament last week were the ones from the last government. MPs needed to vote on them to give the government authority to spend money, she says. She says updated estimates will be published later this year.
And that’s the end of the Today interview.
Q: Before the election, Labour politicians were asked over and over again about comments from groups like the Institute for Fiscal Studies saying there was a black hole in the public finances. But you refused to accept that.
Reeves says the IFS said yesterday the situation was worse than they thought.
Q: But you used to say you would grow your way out of these problems?
Reeves says she remains committed to growth. She says she has announced moves to promote growth. But she did not anticipate a £22bn black hole. And no one else anticipated that either – not the IFS or the OBR. Only the last government knew. And they covered it up, she says.
Husain moves on to adult social care, and she plays a clip from an interview the programme did with Andrew Dilnot earlier. Dilnot is the economist who wrote a report for the coalition government recommending having a cap on what people might have to pay for adult social care (a policy that was endlessly postponed by the Tories, and shelved by Reeves yesterday). Dilnot told Today Reeves’ decision was “a tragedy”.
Reeves says local authorities did not have the money to fund this scheme.
Q: But Labour’s manifesto talked about a national care service?
Reeves says there are lots of things Labour would like to do. But it needs to have the money available.
She says she found the reserves for this year had been spent three times over, just three months into the start of the financial year.
Q: Will you cap social care costs later in this parliament?
Reeves says Wes Streeting will be drawing up plans for social care.
She says the Liz Truss experience shows what happens when the government spends money it does not have.
Q: Do you accept that, having funded a 22% pay rise for junior doctors, other health workers will want the same?
Reeves says the pay review bodies recommended different settlements for different groups of workers.
She says she published analysis yesterday showing the health strikes cost £1.7bn.
That is a reference to this passage from the report published yesterday.
A total of £1.7bn of funding was provided to NHS England to mitigate against the direct cost of industrial action in 2023-24 and ease pressures on hospitals. This was provided through a combination of reprioritised Department of Health and Social Care funding and new funding from HM Treasury. This includes the cost to cover shifts and lost pay efficiencies, whilst subtracting salary savings across those staff on strike.
She says the government did not give the junior doctors all they wanted. They wanted 35%, she says.
Reeves defends above-inflation pay increase for public sector workers, saying they're in line with private sector pay deals
Mishal Husain is interview Rachel Reeves on the Today programme now.
Q: Do you accept that part of the £22bn black hole comes from decisions you made, on public sector pay?
Reeves says the last government set the remit for the public sector pay review bodies. It did not include guidance on what was affordable. She says it was right to accept the recommendations. It would have been almost unprecedented to ignore them, she says.
Q: So you would have set tighter guidelines for the public sector pay?
Reeves says it is right public sector workers are properly rewarded.
She says some of the money, just over a third, will be funded by efficiency savings.
Q: Are you saying you would rather have given them less?
Reeves says it is right public sector workers are properly rewarded. These pay increases are in line with what is happening in the private sector, she says.
Updated
Last night Jeremy Hunt, the shadow chancellor, wrote to Simon Case, the cabinet secretary, asking why Rachel Reeves had presented public spending figures to MPs that contradicted what the Treasury said in the estimates (public spending figures) it presented to parliament last week.
Hunt said:
After the statement made in the House of Commons today, I am writing to follow up with deep concern over some of the conflicting claims that have been made which risk bringing the civil service into disrepute.
It is deeply troubling that the chancellor has today chosen to make claims about the public finances to the House of Commons which directly contradict the documents and legislation the new government put before parliament, signed off by senior civil servant accounting officers.
The Treasury has rejected this claim (as explained on this blog late yesterday). In the document it published yesterday it said it used the pre-election figures in the estimates to allow a vote on them to take place before recess. The report explained:
The government laid main estimates for 2024-25 before parliament on 18 July, the earliest available opportunity after the general election and considerably later than the usual timetable. These estimates were prepared before the general election, and the government was forced to lay them unchanged in order to allow them to be voted on before the summer recess. This was necessary to avoid departments experiencing cash shortages over the summer. The pressures set out in this document represent a more realistic assessment of DEL spending. As usual, departmental spending limits will be finalised at supplementary estimates.
Rachel Reeves says Tories ‘lied about public finances’ as she defends her response to £22bn spending shortfall
Good morning. Yesterday’s statement from Rachel Reeves on the “spending inheritance” was not a budget, but it had all the significance of what the Treasury call a “fiscal event” and, as happens after a budget, the chancellor and shadow chancellor are fighting it out on the airwaves on the next morning’s interview round.
Here is our overnight story about what Reeves announced, by Pippa Crerar, Larry Elliott and Peter Walker.
And here is Nimo Omer’s assessment in her First Edition newsletter.
In the Commons yesterday Reeves was constrained in what she could say about the inheritance left by the Tories by rules that prevent MPs from calling each other liars. Sky News does not have these restrictions, and in her interview on the channel this morning Reeves let rip, accusing her predecessor of deliberately misleading the public about the state of the public finances. She said:
Jeremy Hunt covered up from the House of Commons and from the country the true state of the public finances. He did that knowingly and deliberately.
He lied, and they lied during the election campaign about the state of the public finances …
It is beyond reckless and irresponsible, and at a time when trust in politics is already at an all-time low ... to then mislead people in that way during a general election about what was possible - it was unforgivable.
I will post more from her interviews, and Hunt’s, shortly.
Here is the agenda for the day.
Morning: Keir Starmer chairs cabinet.
11.30am: David Lammy, the foreign secretary, takes questions in the Commons.
After 12.30pm: Angela Rayner, the deputy PM and housing secretary, gives a statement to MPs on changes to planning rules. Later she will do a planning-related visit in Hampshire.
Afternoon: MPs debate the budget responsibility bill at second reading.
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