Rishi Sunak makes five promises on economy, health and immigration in keynote speech

Published

2 years ago

January 4, 2023

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Rishi Sunak has pledged to boost the economy, cut hospital waiting lists and stop migrant crossings in the Channel in his first speech of the year.

Speaking in Stratford, the PM laid out his priorities for 2023 and asked the public to judge his premiership on five promises.

These pledges are:

• to halve inflation

• to grow the economy

• to reduce debt

• to cut hospital waiting lists

• to stop migrant crossings

Mr Sunak promised to work “night and day” to deliver on the above five challenges during this parliament and to create “a future that restores optimism, hope and pride in Britain”.

PM faces questions on NHS pressures – politics latest

“So I want to make five promises to you today. Five pledges to deliver peace of mind. Five foundations, on which to build a better future for our children and grandchildren,” the PM said.

“First, we will halve inflation this year to ease the cost of living and give people financial security.

“Second, we will grow the economy, creating better-paid jobs and opportunity right across the country.

“Third, we will make sure our national debt is falling so that we can secure the future of public services.

“Fourth, NHS waiting lists will fall and people will get the care they need more quickly.

“Fifth, we will pass new laws to stop small boats, making sure that if you come to this country illegally, you are detained and swiftly removed.

“So, five promises – we will: Halve inflation, grow the economy, reduce debt, cut waiting lists, and stop the boats.

“Those are the people’s priorities. They are your government’s priorities. And we will either have achieved them or not.

“No tricks, no ambiguity, we’re either delivering for you or we’re not. We will rebuild trust in politics through action, or not at all. So, I ask you to judge us on the effort we put in and the results we achieve.”

Mr Sunak continued: “People don’t want politicians who promise the earth and then fail to deliver. They want government to focus less on politics and more on the things they care about.

“The cost of living, too high. Waiting times in the NHS, too long. Illegal migration, far too much.

“I think people do accept that many of these challenges are at least in part, the legacy of COVID and impacted by the war in Ukraine. But that’s not an excuse. We need to address these problems, not just talk about them.”

The PM added: “I will only promise what I can deliver, and I will deliver what I promise.”

But he acknowledged he vision he set out may not be delivered in its entirety this year.

Mr Sunak’s speech comes as the UK is facing a wave of strikes, a cost of living crisis and huge pressures on the NHS.

Earlier today, a leading medical organisation said the PM must recall parliament “immediately” so MPs can discuss the “NHS crisis”.

The PM said his government is “taking urgent action” to increase hospital bed capacity by 7,000, adding: “And the NHS is working urgently on future plans for A&E and ambulances.”

He acknowledged that, at present, “patients aren’t receiving the care they deserve” and said “something has to change”.

The PM told his audience that the “most acute” pressure in the NHS is on A&E.

On the continuing industrial action, Mr Sunak called for a “reasonable dialogue” with the unions and promised an update on the government’s next steps.

Saying ministers “hugely value public sector workers like nurses”, the PM said his government’s actions will “reflect the people’s priorities”.

Yesterday, the PM’s new mission to combat high rates of innumeracy in England was unveiled through a pledge to ensure all pupils in the country study some form of the subject until the age of 18.

Addressing this ambition, Mr Sunak said: “Just imagine what greater numeracy will unlock for – people the skills to feel confident with your finances, to find the best mortgage deal.

“The ability to do your job better and get paid more and greater self-confidence to navigate a changing world.”

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Budget: Hostile market response as chancellor suffers Halloween nightmare

Published

11 hours ago

October 31, 2024

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Budget: Hostile market response as chancellor suffers Halloween nightmare

First things first: don’t panic.

What you need to know is this. The budget has not gone down well in financial markets. Indeed, it’s gone down about as badly as any budget in recent years, save for Liz Truss’s mini-budget.

The pound is weaker. Government bond yields (essentially, the interest rate the exchequer pays on its debt) have gone up.

That’s precisely the opposite market reaction to the one chancellors like to see after they commend their fiscal statements to the house.

In hindsight, perhaps we shouldn’t be surprised.

After all, the new government just committed itself to considerably more borrowing than its predecessors – about £140bn more borrowing in the coming years. And that money has to be borrowed from someone – namely, financial markets.

But those financial markets are now reassessing how keen they are to lend to the UK.

The upshot is that the pound has fallen quite sharply (the biggest two-day fall in trade-weighted sterling in 18 months) and gilt yields – the interest rate paid by the government – have risen quite sharply.

This was all beginning to crystallise shortly after the budget speech, with yields beginning to rise and the pound beginning to weaken, the moment investors and economists got their hands on the budget documentation.

But the falls in the pound and the rises in the bond yields accelerated today.

This is not, to be absolutely clear, the kind of response any chancellor wants to see after a budget – let alone their first budget in office.

Indeed, I can’t remember another budget which saw as hostile a market response as this one in many years – save for one.

That exception is, of course, the Liz Truss/Kwasi Kwarteng mini-budget of 2022. And here is where you’ll find the silver lining for Keir Starmer and Rachel Reeves.

The rises in gilt yields and falls in sterling in recent hours and days are still far shy of what took place in the run up and aftermath of the mini-budget. This does not yet feel like a crisis moment for UK markets.

But nor is it anything like good news for the government. In fact, it’s pretty awful. Because higher borrowing rates for UK debt mean it (well, us) will end up paying considerably more to service our debt in the coming years.

And that debt is about to balloon dramatically because of the plans laid down by the chancellor this week.

And this is where things get particularly sticky for Ms Reeves.

In that budget documentation, the Office for Budget Responsibility said the chancellor could afford to see those gilt yields rise by about 1.3 percentage points, but then when they exceeded this level, the so-called “headroom” she had against her fiscal rules would evaporate.

In other words, she’d break those rules – which, recall, are considerably less strict than the ones she inherited from Jeremy Hunt.

Which raises the question: where are those gilt yields right now? How close are they to the danger zone where the chancellor ends up breaking her rules?

Short answer: worryingly close. Because, right now, the yield on five-year government debt (which is the maturity the OBR focuses on most) is more than halfway towards that danger zone – only 56 basis points away from hitting the point where debt interest costs eat up any leeway the chancellor has to avoid breaking her rules.

Now, we are not in crisis territory yet. Nor can every move in currencies and bonds be attributed to this budget.

Markets are volatile right now. There’s lots going on: a US election next week and a Bank of England decision on interest rates next week.

The chancellor could get lucky. Gilt yields could settle in the coming days. But, right now, the UK, with its high level of public and private debt, with its new government which has just pledged to borrow many billions more in the coming years, is being closely scrutinised by the “bond vigilantes”.

A Halloween nightmare for any chancellor.

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Football financier Harris spearheads £200m bid for Crystal Palace stake

Published

12 hours ago

October 31, 2024

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Football financier Harris spearheads £200m bid for Crystal Palace stake

The football financier Keith Harris is spearheading a bid to buy a 45% stake in the Premier League football club Crystal Palace in a deal that could be worth close to £200m.

Sky News has learnt that Mr Harris is advising a group of businessmen including Zechariah Janjua and Navshir Jaffer on an offer to acquire the shareholding from Eagle Football, a vehicle created by American businessman John Textor and owner of a number of major clubs around the world.

Sources said on Thursday that the consortium advised by Mr Harris was a leading contender to buy the stake in the Eagles, although they cautioned that at least one, and possibly two, other parties were also in discussions with Mr Textor.

Mr Harris’s group, which would probably execute its deal through a recently established corporate vehicle called Sportbank, may also require financing from other investors as part of its plans, the sources added.

Eagle Football is said to be hopeful that a deal to offload its Crystal Palace shareholding would value the club, which recorded its first win of the Premier League campaign against Tottenham Hotspur last weekend, at more than £400m.

Stanley Tang, one of the founders of the US-based food delivery company DoorDash, is also understood to have expressed an interest in acquiring Eagle Football’s stake in Crystal Palace.

A spokesman for Mr Tang denied that he was in discussions to buy Eagle Football’s Crystal Palace stake.

Mr Textor, who declined to comment, is keen to own a controlling interest in a club in English football’s top flight, and came close to securing a deal to buy Everton during the summer.

Instead, Everton’s long-standing owner agreed a transaction with Dan Friedkin, the owner of Italian Serie A side AS Roma.

Eagle Football’s other footballing interests include Olympique Lyonnais in France, Botafogo, which currently leads Brazil’s top division, and RWD Molenbeek in Belgium.

This week, the holding company issued a statement confirming that it is preparing to file confidentially with US regulators ahead of a public listing in the first quarter of next year.

Sky News revealed in August that Eagle Football had lined up Stifel and TD Cowen, the investment banks, to work on the initial public offering (IPO).

The stake in Crystal Palace is being sold by The Raine Group, which has been involved in recent deals involving Chelsea and Manchester United.

In its statement this week, Eagle Football said it would seek $100m from the sale of shares in the company ahead of an IPO, as well as a further $500m as part of the flotation itself.

It also wants to raise “up to $500m to retire existing senior debt, to be achieved through the sale of its interest in Crystal Palace Football Club and, possibly, the placement of long-term senior notes”.

Collectively, these moves are expected to help Mr Textor achieve an enterprise value for Eagle Football of around $2.3bn (£1.74bn), they said.

In the past, Mr Textor has spoken about his belief that public ownership of football teams provides fans with greater transparency about the running of their clubs.

He has described this as the democratisation of ownership – an issue set to face greater scrutiny now that a bill on football regulation has been reintroduced to parliament by the new Labour government.

Some clubs with listed shares, including Manchester United, have, however, endured a torrid relationship with supporters, partly as a result of their voting rights being controlled by a single dominant shareholder.

Mr Harris declined to comment on Thursday.

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Disposable income levels to worsen and wages to stagnate in wake of budget, says thinktank

Published

17 hours ago

October 31, 2024

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Disposable income levels to worsen and wages to stagnate in wake of budget, says thinktank

The next five years will hurt disposable income and wages will stagnate further following Chancellor Rachel Reeves’ budget, an influential thinktank has said.

Household disposable income, or living standards, will be the worst under any Labour government since 1955 when inflation is factored in, the Resolution Foundation said.

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The thinktank also said pay will stagnate in the middle of the parliament as higher inflation lessens pay rises and growth is slowed in an already challenging economic environment.

It will mean that in 2028, pay adjusted for inflation – real wages – is forecast to have grown on average by just £13 a week over the past 20 years, according to analysis from the foundation.

Previous analysis from the thinktank showed weekly wages had increased by just £16 in 14 years when inflation was factored in.

But the foundation added that households’ disposable income will grow more throughout the five-year parliamentary term than the last – by an expected 0.5% a year, compared to 0.3% under the Conservative government.

Rising prices

Prices will rise more because of the budget and growth will be weaker in part due to the rise in employer’s national insurance, it added.

Inflation will rise as a result of employers passing on the national insurance contributions to customers, the introduction of VAT on private school fees and the reform of vehicle tax, the Office for Budget Responsibility (OBR) said.

The OBR predicts UK economic growth to be 1.1% in 2024, peaking at 2% in 2025 before falling to 1.85% in 2026, 1.5% in 2027, and 1.5% in 2028 before rising again to 1.6% in the final year of the parliament.

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The OBR reached the same conclusion as the Resolution Foundation on disposable income. It also anticipates it will grow just over 0.5% a year.

Some positive response

The International Monetary Fund (IMF) has broadly welcomed the UK budget, praising the proposed debt reduction targets and tax-raising measures.

The focus on boosting growth and increasing public investment was singled out in their comment as was the move to having only one fiscal event, a budget, a year.