Afternoon summary
- Patrick Minford, the economist cited by Liz Truss as providing the rationale for her plan to use huge tax cuts to stimulate the economy and supposedly cut inflation, has said that interest rates would have to go up to around 7% for his proposal to work. In an interview with the Times, Minford said he agreed that big tax cuts would require interest rates to rise. He said:
Yes, interest rates have to go up and it’s a good thing. A normal level is more like 5-7% and I don’t think it will be any bad thing if we got back to that level.”
If you’ve got incredibly low interest rates you kill off savings and create febrile markets with a lot of zombie companies surviving because it costs them nothing to borrow. It’s right that a healthy economy should have a decent interest rate. That’s certainly one thing I want to see.
- Liz Truss, the foreign secretary and favourite in the contest to be the next Tory leader and prime minister, has welcomed the signing of a deal between Ukraine and Russia to allow the export of millions of tonnes of grain from blockaded Black Sea ports. She said the UK had been at the forefront of pushing for the agreement. In a statement she said:
Putin’s barbaric invasion of Ukraine has meant some of the poorest and most vulnerable people in the world are at risk of having nothing to eat. It is vital that Ukrainian grain reaches international food markets, and we applaud Turkey and the UN secretary general for their efforts to broker this agreement.
The UK and our allies have been pushing hard to reach this point. Now this agreement must be implemented, and we will be watching to ensure Russia’s actions match its words. To enable a lasting return to global security and economic stability, Putin must end the war and withdraw from Ukraine.
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The Guido Fawkes website has got hold of a video of Rishi Sunak campaigning for leave in 2016. It says it took a while for the Sunak team to release the video, and it says it is surprised the campaign did not make it available sooner.
Perhaps that is because Sunak’s predictions have not stood the test of time. In the video he says British farmers will have a “bright future” outside the EU. But many farmers believe that Brexit has turned out to be harmful for the industry, and the National Farmers’ Union says its members says its members interests have been neglected in post-Brexit trade deals.
Rishi’s Vote Leave Campaigning Finally Dug Out https://t.co/s43jnOuWBG pic.twitter.com/L0vmeQ56Er
— Guido Fawkes (@GuidoFawkes) July 22, 2022
Sunak vows to press ahead with Channel 4 privatisation
Rishi Sunak has pledged to push ahead with the privatisation of Channel 4 if he becomes prime minister, clearing the way for the sale of the broadcaster next year, my colleague Jim Waterson reports.
Sturgeon accuses Sunak and Truss of being 'hypocrites' because they now oppose second Scottish independence referendum
Nicola Sturgeon, Scotland’s first minister, has accused Rishi Sunak and Liz Truss of both being “hypocrites” because they both oppose a second independence referendum which previous comments suggested they might support.
In 2017 Sunak told the Daily Express that it would be “hard” to block a second referendum, but that he thought it should be delayed until after Brexit was complete, when the choice would be “clearer” for voters.
And in the 1990s, when Truss was a Liberal Democrat, she told the Lib Dem conference that she supported the use of referendums to settle major constitutional issues. She made the comment in this speech, which is well worth watching in full.
Good afternoon - I have digitised & uploaded the complete version of Liz Truss' 1994 Lib Dem conference speech https://t.co/sn2Q08dLG8
— Glamorous Matt 📼 (@Glamorous_Matt) July 20, 2022
Now Truss says she would oppose a second independence referendum in any circumstances, and Sunak has ruled out supporting one too.
Sturgeon told PA Media:
There’s been comments in the media from both of them in previous years in the last few days.
Liz Truss talking about the importance of referenda in settling constitutional issues, Rishi Sunak a few years ago saying that there should be a referendum after Brexit - well we are after Brexit.
They’re hypocrites - changing their position just to suit their narrow, party-political, democracy-denying agendas.
It’s not about the interests of Scotland, it’s about their own interests.
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Jim O’Neill, the economist who served as a Treasury minister in David Cameron’s government, has dismissed Liz Truss’s claim that her plan to reverse the proposed rise in corporation tax would promote growth. He told Times Radio:
She seems to miss the fact that the government that’s been predominating over power has cut corporate taxes dramatically over the past 12 years, and it hasn’t done what she claims it would do. And so there’s not really a proper framework for what she’s saying. It’s obviously playing to the gallery of whatever small number of people that determine the future of the Tory party leadership.
He also said it was disappointing that none of the candidates in the contest have discussed what could be done to increase productivity. He said:
The only way of really growing anything close to the last 15 years, never mind the previous 15, is to have much bigger productivity. So the only relevance about the tax debate should be - particularly at the time of a large deficit and the inflation issues and the social issues - what taxes, if any, will clearly stimulate productivity. And that’s not the question that from what I can see a single leader that’s campaigned in this debate has asked themselves.
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Truss's tax allowance plan for stay-at-home carers would drive women out of workforce, campaign group claims
Liz Truss’s plan to give stay-at-home parents a tax break will cause “a mass exodus of women from the workforce”, a leading campaigner has said.
Commenting on the plan announced by Truss yesterday, Joeli Brearley, the founder and CEO of maternal rights campaign group Pregnant Then Screwed, said the proposals would remove choice from women unless childcare was also made cheaper. She told PA Media:
Initially the policy sounds great, because of course stay-at-home parents do deserve to be remunerated for the really valuable work that they do and we have been arguing for that for a long time.
However, if you give couples tax breaks for one person staying at home, we know it’s women that will leave the workforce, not men.
Brearley said the high cost of childcare in the UK meant it would be the woman who would stay at home. She said:
Couples compare that cost of childcare to the salary of the woman, not the man.
It actually removes choices from women rather than increasing choices for women, so inevitably we will see a mass exodus of women from the workforce. It just doesn’t add up for family finances.
Brearley also said it was “deeply frustrating” that Truss “doesn’t see the impact of a policy like this” despite having served as minister for women and equalities since September 2019.
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Liz Truss or Rishi Sunak would both be “terrible for Scotland” as prime minister, Nicola Sturgeon, Scotland’s first minister, said today. She said she did not have a preference because they were both unacceptable to the Scots.
FM @NicolaSturgeon tells @AlanJZycinski she doesn’t have a preference of who becomes next Prime Minister as both @RishiSunak + @trussliz would be “terrible for Scotland”.
— Heart Scotland News (@HeartScotNews) July 22, 2022
Describes them as “democracy deniers” and “hypocrites” on #IndyRef2 issue.
pic.twitter.com/LdSvzoJOWo
Raoul Ruparel, who was Theresa May’s Europe adviser when she was PM, thinks the European Commission’s decision to launch new legal action against the UK will prove counterproductive, because it will make it harder for the next Tory leader to compromise.
Think both approach & timing of this unwise (given EUs stated aims)
— Raoul Ruparel (@RaoulRuparel) July 22, 2022
1. Timing means even harder for either leadership candidate to signal any compromise
2. Focus on pointless stuff like challenging unfettered access NI to GB makes the case for hardliners for them https://t.co/Egs17Ftf2x
Mujtaba Rahman, a Brexit analyst at the Eurasia Group consultancy, says there was not much chance of the next Tory leader compromising anyway.
Likelihood of any signal of compromise during campaign pretty much close to zero? If anything risk is debate is being pushed in the other direction. Why does EU side always have to subordinate itself to domestic politics in UK?
— Mujtaba Rahman (@Mij_Europe) July 22, 2022
These are from Anton Spisak, the Brexit expert at the Tony Blair Institute for Global Change thinktank, on the significance of the EU’s decision to launch new legal proceedings against the UK over the Northern Ireland protocol. (See 11.56am.)
My take on this. It's mostly minor stuff the Commission is challenging this time round and, I'm guessing, it's to make a point: NIP needs to be implemented and, if it won't be, we're ready to act.
— Anton Spisak (@AntonSpisak) July 22, 2022
It's also sending a signal to Truss and Sunak: there's more serious stuff to come. https://t.co/dU9RAYUlV9
Will this play straight into the hands of hardliners in the Tory party who want to see the Protocol scrapped and the Bill passed? Yes, of course.
— Anton Spisak (@AntonSpisak) July 22, 2022
Does the Commission care about this? Not any longer.
David Frost, the former Brexit minister, says the European Commission’s threat to take the UK to the European court of justice highlights the flaws with the Northern Ireland protocol.
"Commission launches four new infringement procedures against the UK"
— David Frost (@DavidGHFrost) July 22, 2022
Those who still think that the CJEU's role in Northern Ireland is just a theoretical or ideological issue may want to think again. https://t.co/yhS7J0NsTw
Lord Frost, of course, played a large part in agreeing the protocol as Boris Johnson’s then Brexit negotiator. Now he says that it is flawed, but he argues that it was the best option available to the UK in 2019 and that it had to be agreed to get Brexit done.
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EU launches new legal proceedings against UK over its failure to implement Northern Ireland protocol
The European Union has launched fresh legal action against the UK for failing to comply with the Northern Ireland protocol.
In a statement, the European Commission says it is launching four new infringement procedures because the UK is ignoring obligations it has to the EU under the protocol, which imposes customs rules for goods going between Britain and Northern Ireland to avoid the need for checks at the border between Northern Ireland and Ireland.
The commission says:
In a spirit of constructive cooperation, the commission refrained from launching certain infringement procedures for over a year to create the space to look for joint solutions with the UK. However, the UK’s unwillingness to engage in meaningful discussion since last February and the continued passage of the Northern Ireland protocol bill through the UK parliament go directly against this spirit.
The aim of these infringement procedures is to secure compliance with the protocol in a number of key areas. This compliance is essential for Northern Ireland to continue to benefit from its privileged access to the European single market, and is necessary to protect the health, security and safety of EU citizens as well as the integrity of the single market.
Formal infringement procedures start with the commission writing to the UK and demanding remedial action. If the UK does not comply within two months, the commission could take the issues to the European court of justice, which could fine the UK. The commission has also not ruled out imposing trade sanctions on the UK as retaliation.
The four complaints are that the UK failed to comply with: 1) customs requirements, supervision requirements and risk controls on the movement of goods from Northern Ireland to Great Britain; 2) the transposition of EU legislation laying down general EU rules on excise duties; 3) the transposition of EU rules on excise duties on alcohol and alcoholic beverages; and 4) EU rules on Value Added Tax (VAT) for e-commerce, namely the Import One-Stop Shop (IOSS).
Last month the commission launched infringement proceedings in relation to a different aspect of the protocol, where it also said the UK was ignoring its obligations.
We have today launched four new infringement procedures against the United Kingdom for not complying with significant parts of the Protocol on Ireland / Northern Ireland.
— European Commission 🇪🇺 (@EU_Commission) July 22, 2022
Read more: https://t.co/4CMwPZvLZV
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In his LBC phone-in Wes Streeting, the shadow health secretary, also had a go at journalists who ask Keir Starmer about claims that he is too boring to be elected PM. The question was prompted by Starmer’s interview with Sky’s Beth Rigby last night, but Rigby was only asking a question that has frequently been put to Starmer.
'I don't think I am boring. I am not going to pretend politics is a brand of the entertainment business, it's not. Running the country is a really serious issue', says Labour leader Sir @Keir_Starmer.#Rigby: https://t.co/Ooe9h3fwsj
— Sky News (@SkyNews) July 21, 2022
📺 Sky 501, Virgin 602, Freeview 233 and YT pic.twitter.com/572nMyTlG4
Streeting said:
I must say that, that line of questioning and this sort of notion that politics is just a personality contest, makes me want to sort of bang my head against a brick wall.
Because, putting to one side the fact that actually Keir is a very nice person, with a very nice personality, I don’t care.
What I do care about is do you have the ideas to make our country better? Do you bring to the highest office in the land a degree of seriousness, to do a serious job?
Fewer people in politics have a bigger personality than Boris Johnson. But I think fewer people in politics have messed up as badly as Boris Johnson.
If you want a clown, go to the circus. I want someone serious in No 10.
This was roughly the answer that Starmer gave to Rigby in the Sky interview. He said he did not think he was boring, or that she really thought he was boring either, but he went on:
I’m not going to pretend that I think that politics is a branch of the entertainment business. It’s not. Running the country’s a really serious issue and you need serious politicians to do it.
Starmer considered quitting Corbyn's cabinet over antisemitism – Streeting
Wes Streeting, the shadow health secretary, has been hosting an LBC phone-in this morning, standing in for James O’Brien, who is on holiday. As the Sun’s Noa Hoffman reports, Streeting said that when Jeremy Corbyn was leader, Keir Starmer asked him if he thought he should resign from the shadow cabinet over the party’s handling of antisemitism. Streeting said he told Starmer to stay put.
NEW: Wes Streeting tells LBC that Keir Starmer asked him whether he should resign from Cornyn's shadow cabinet while shadow Brexit Secretary over AS etc. Wes said "no we need you there" and he stayed on
— Noa Hoffman (@hoffman_noa) July 22, 2022
Streeting: "We had quite a robust conversation about his challenges and Kier said look, do you think I should resign from the shadow cabinet? Is that what you're saying to me? And I said, oh no, for goodness sake, don't do that. We absolutely need you in there."
— Noa Hoffman (@hoffman_noa) July 22, 2022
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Yesterday Liz Truss visited a charity for children in Peterborough. Sky News has released this footage, showing that the youngsters she met had surprisingly strong views about Boris Johnson.
Conservative leadership candidate Liz Truss met with children in Peterborough, who told her the meeting was 'awkward' and asked why Boris Johnson hadn't been 'kicked out yet'.
— Sky News (@SkyNews) July 22, 2022
Latest politics: https://t.co/TIMFYJviWO pic.twitter.com/1JExEYMTtr
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Can Rishi Sunak defeat Liz Truss in the Conservative leadership contest? Two of the best newspaper columns on this subject around today suggest he probably can’t.
Prejudice may stop Rishi Sunak from becoming prime minister. For Mr Sunak, the grandson of Indian immigrants, comes from a demographic that has long gone unrepresented at the very top of British politics: Old Wykehamists.
Winchester, the posh school that Mr Sunak attended, churns out clever clogs who never quite make it to become prime minister. Two former Labour chancellors, Stafford Cripps and Hugh Gaitskell, both attended the school, which now charges £45,936 ($55,000) in annual fees. Geoffrey Howe, a former Conservative chancellor who, like Mr Sunak, helped bring down a prime minister, is another alumnus. In total Winchester boasts six chancellors but just one prime minister (from more than two centuries ago). In contrast, Eton, a posher school that extols the virtue of leading over reading, has managed 20, including two of the past three.
John Stuart Mill once labelled the Conservatives “the stupid party”. That is unfair. But it is true that Tories are suspicious of cleverness. They prefer a different characteristic: soundness. This trait is difficult to define. But, like pornography, Conservatives know it when they see it. Roger Scruton, a right-wing thinker, wrote that conservatism’s “essence is inarticulate”. To put it another way: anything that can be greeted with the guttural baying Conservative MPs use to show approval (“Yeeeyeeeyeeeyeee”) is sound. The choice that party members must now make as they weigh up whom to pick as their leader is between cleverness or soundness. Mr Sunak is clever. Liz Truss, the foreign secretary and his opponent in the runoff, is sound.
- Fraser Nelson in the Daily Telegraph says, with CCHQ due to sent ballot papers out to party members at the start of August, Sunak has until the end of next week to turn things to his favour. Truss is in a stronger position, he says.
[Sunak] promises “radical” plans to “unleash growth”, but says no more. Having spoken to him over the years about the need for reform, I have no doubt he’s sincere. But he’ll never get the chance to implement reforms unless he hurries up and tells people what his plans might be.
Truss is probably winging it. Her ideas may be just as flaky as Sunak says. She may have not the faintest idea how she’d find the money, or what to do if the debt markets play up. But she has at least started with a firm promise to make a difference – and if there’s no difference, what was the point of deposing a prime minister?
Sunak seems to be betting that less is more: that he’s more credible because his offer is not dazzling. But with so little time left his strategy may be, by far, the bigger gamble.
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Ladbrokes, the betting company, says this morning that although Liz Truss is the favourite in the Tory leadership contest, with odds of 4/9, 62% of the bets it is taking are on Rishi Sunak to win, at 7/4.
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Rishi Sunak claims 20,000 people have signed up to support his campaign for the Tory leadership.
Over 20,000 people have already joined our campaign and we're only just getting started.
— Ready For Rishi (@RishiSunak) July 22, 2022
🙋♂️Want to volunteer?
🙏 Help with our events?
📱Be a part of our social network?
Join the team 👉https://t.co/3cXn1rFhca pic.twitter.com/R62PF83Kb3
In his interview with Andrew Marr on LBC last night Rishi Sunak claimed he played a big part in the government’s decision to avoid a return to lockdown last Christmas. He told the programme:
What I did in December was fly back from a government trip I was on overseas and I flew back to this country to stop us sleepwalking into a national lockdown. Because we were hours away from a press conference that was going to lock this country down again because of Omicron, and I came back and fought very hard against the system because I believe that would be the wrong thing for this country, with all the damage it would have done to businesses, to children’s education, to people’s lives.
We were hours away. We were hours away from a national lockdown, but I came back and challenged the system and said this is not right, and we don’t need to do this. And I’m glad I won the argument.
In the Daily Mail (which is vigorously supporting Liz Truss in the Tory leadership contest) Jason Groves reports that Sunak’s version of this story is disputed by other government sources who were involved. Groves writes:
One source said Mr Sunak’s claim was ‘categorically untrue’.
‘He was out in California and planning to stay there on holiday until he started to get criticism from business back home. It is categorically untrue to say we were hours from another lockdown.
‘By the time he got back, the PM had already decided he didn’t want to go beyond Plan B restrictions.’
Two Cabinet sources said that when Mr Johnson asked Mr Sunak for his views on the matter at a crunch meeting, he replied: ‘Oh no, no one wants to hear from me, Prime Minister.’
It is not unusual for accounts of how and when a particular decision got taken in government, and the part played by any single individual, to vary. But this story is damaging because the YouGov polling out yesterday suggested that 40% of Tory members do not view Sunak as honest, and that this is one reason why they like Liz Truss more.
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In his Sky News interview Robert Halfon, the Rishi Sunak supporter and Tory chair of the Commons education committee, also insisted that inflation was “the No 1 enemy of the cost of living” and that Sunak, not Liz Truss, had the best policies to bring it down.
Asked about Truss’s claim that Sunak’s high taxes had stifled growth, he replied:
I don’t accept that narrative at all. Yes he did put up corporation tax but don’t forget we spent £400bn during Covid. I mentioned the £80bn of debt interest that we have. We’re £2tn in debt overall. You have to pay some of that money back.
But he also cut taxes. He cut national insurance tax for 70% of households. He also cut business taxes for hospitality, retail and leisure.
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Rishi Sunak has time to win over Tory members and is not making promises he can’t keep, leading supporter says
Good morning. The final stage of the Conservative party leadership contest has just started, but some polling from YouGov last night implied it may already be all but over. It suggested that Liz Truss has such a large lead over Rishi Sunak with members that it will be very hard for him to catch up and overtake her. Polls are not always right, of course, and opinions shift as a campaign goes on, but Truss is looking like the probable next prime minister.
Robert Halfon, the Conservative chair of the Commons education committee, is one of Sunak’s most prominent supporters and this morning he told Sky News that Sunak has time to turn things round. Asked why members did not seem to like Sunak, he replied:
It’s very early days of the contest. We just finished the MP elections and the former chancellor is going to be going around the country meeting members. I believe, when Rishi Sunak makes his case, more members will come and support him because they know he’s not making promises he can’t keep - and that’s the important thing.
One factor that may explain Sunak’s relative unpopularity with members is the perception that he stabbed Boris Johnson in the back, but Halfon insisted that accusation was unfair. He said:
Rishi Sunak was very loyal to the prime minister. He resigned when he just thought things had gone too far. He had differences with the prime minister over the economy but he was there til almost the very end. He was loyal right through the Partygate episode. Another MP went to see him and he refused to countenance any kind of disloyalty to the prime minister.
Halfon is referring to Andrew Murrison, who wrote an article for the Guardian describing how his attempt to persuade Sunak a few months ago to lead a cabinet uprising against Johnson failed.
MPs have started their summer recess, and there is very little scheduled on the Westminster agenda for today. But Tory leadership campaigning is continuing, and the news is not going to dry up.
I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.
If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.
Alternatively, you can email me at andrew.sparrow@theguardian.com
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