Afternoon summary
Rachel Reeves, the chancellor, has told MPs that the government does not want to give a hasty response to the Trump tariffs because it does not want to put the “prize” of an economic deal with the US at risk. (See 3.36pm.) But, in evidence to the Commons Treasury committee, she said even with a deal with the US, the UK could still face difficulties. As Bloomberg reports, she said:
If we are able to secure an economic agreement with the United States, which we very much want to secure, and are working hard to secure, even if that is possible, it doesn’t mean that somehow we are therefore out of the woods and not impacted by tariffs.
The specific tariffs on the UK are less relevant to the growth and inflation impacts than the global picture because we are an open trading economy and depressed demand from overseas because of tariffs, higher inflation overseas because of tariffs has a direct impact on the UK.
The National Institute of Economic and Social Research thinktank has said much the same. In an assessment, it says:
Our estimates also show that the UK economy is vulnerable to the negative effects of US tariffs through both direct and indirect channels. We find that tariffs raise prices and weaken economic activity in the United Kingdom, with the size of the effects depending on the scope of the tariffs. Even if the United Kingdom were exempt from these tariffs, economic activity could still suffer due to broader global disruptions. In a worst-case scenario where high tariffs are applied, UK GDP growth could fall to zero next year.
Keir Starmer has accused the Conservatives of using a “fantasy figure” to claim that families will be £3,500 poorer due to the rise in employer national insurance contributions.
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Greater Manchester demonstrates 'game changer' approach UK needs to deliver public services properly, Burnham says
Greater Manchester offers a model for Britain as to how public services should be delivered and improved, Andy Burnham has said.
In a speech today at the Institute for Government, Burnham said that his city showed why combined authority mayoralties were the best way of delivering services locally. At the heart of this was “a place-first approach”.
The push for elected mayors started when Tony Blair was prime minister, but the concept was extended under the coalition and Conservative governments, with mayors being elected to run combined authorities – not just a single town or city, but a wider area, incorporating several local authorities.
In 2017 Burnham was the first person to be elected Greater Manchester mayor and his combined authority, which covers 10 boroughs, is the most powerful outside London.
In his speech, Burnham paid tribute to George Osborne, the former Tory chancellor, and Sir Howard Bernstein, the former Manchester city chief executive, for their work on the devolution deal that gave his authority its powers.
It had been a great success, he argued.
Since Greater Manchester and the UK government signed the first devolution deal a decade ago, our city-region has been the fastest-growing in the UK, with average annual growth of 3.1% over the last 10 years and the highest productivity growth.
The jury is in: the combined authority model of English devolution, pioneered by Greater Manchester, works. The scale of the achievement is all the more significant when you consider this was a decade of Brexit, Covid and all the shocks since …
The signature achievement is the successful introduction of a new, integrated public transport system, the Bee Network.
But just as significant, although less visible to the public, is the unique, highly-integrated model of public services built in close partnership with the private sector, our universities and the community and voluntary sector. I think we have the most integrated system of public services anywhere in the country.
The Labour government wants to extend the combined authority mayoral model and Burnham said this this approach was right.
In the mayoral combined authority model, the country has stumbled upon the game-changer that the British state has long needed.
It allows a coherent, whole-place approach and, if used properly, could provide the roadmap to a more streamlined and financially sustainable state, breaking down silos, joining the dots around people and places and, in the process, securing more value for public money. Particularly in an era when it is scarce.
And he said a “place-first approach” was at the crucial to making this work.
Combined authorities work best when they operate on the principle of place-first rather than party-first.
Unlike the divisions of party, place is a unifying force. However people vote, they are united by a desire to see the place where they live move forward.
These days, we are lacking things which unite us in common cause. If places have more agency, and a sense of forward direction, and those places are likely to be more cohesive and less divided.
A place-first approach also creates the right conditions for businesses to invest. It creates a long-term stability in direction that Westminster is simply not set up to provide.
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