Connect with us

Published

on

This spending review is a massive deal. It’s a massive deal because of the sums of money and capital the government is about to allocate – £600bn over the next three to four years.

But it is also a massive political moment as the Labour government tries to turn the corner on a difficult first year and show voters it can deliver the change it promised.

It is not, say No 10 insiders, another reset, but rather a chance to show ‘working people’ why they voted Labour. Look at the blitz of announcements over recent days, and this is a government trying to sell the story of renewal.

Tap here for the latest political news

On Tuesday, the prime minister and his energy secretary, Ed Miliband, announced the biggest nuclear building programme for half a century, with £14.2bn being poured into Sizewell C on the Suffolk coastline to create over 10,000 jobs over the next decade and provide energy security.

Last week, the chancellor announced £15bn for new rail, tram and bus networks across the West Midlands and the North. She’s also expected to green-light a new rail line between Liverpool and Manchester on Wednesday, and invest capital in housebuilding.

In total, there will be £113bn of additional capital investment, which the government will frame as the long-promised ‘decade of renewal’ around the three pillars of security, health and the economy.

Please use Chrome browser for a more accessible video player

How will Rachel Reeves balance the books?

But that is only one half of this spending review and only one half of the story we will hear on Wednesday, because the largesse of the capital investment – which the chancellor will say is only possible because of the choices she made in the first year of government – will be matched with spending settlements for day-to-day spending across Whitehall that will draw into sharp relieve the choices and priorities for this government.

Security and health are two of her pillars, and it will be defence and health that will take a bigger share of the spending pot.

Frustration in the Home Office

Having front-loaded day-to-day spending into the first and second years of this Labour administration, the overall pot will rise by 1.2 per cent in real terms every year for the rest of the parliament.

That is pretty modest growth and, bluntly, it means that if the defence and NHS budgets get a bigger share of the pot, there will be real terms cuts in some unprotected departments.

One to watch is the Home Office, where the home secretary was the last to hold out on a settlement and seems to have had it imposed on her by the chancellor.

Hers is a huge brief, spanning police – including the manifesto pledge to increase police on the beat by 13,000 – border security, immigration, and homeland security.

There is frustration in the Home Office that while ‘security’ is one of the government’s pillars, it is the Ministry of Defence that has been given the funding. If Yvette Cooper is to deliver on police numbers, what else might have to give?

Watch too for a squeeze on council budgets as the chancellor uses her capital budget to invest in house building, while day-to-day spending is squeezed across our councils, schools and courts.

Please use Chrome browser for a more accessible video player

Sky’s Economics and Data Editor Ed Conway explains what we can expect in Rachel Reeves’ spending review.

Reeves under pressure to boost spending

This is the rub. Rachel Reeves will insist on Wednesday that spending is rising by £190bn more over the course of the parliament, partly because of those tough tax rises in her first budget.

But largesse in capital investment won’t be able to disguise the short-term pressures on day-to-day spending from a Labour Party and a set of voters fed up with cuts and feeling like their lives aren’t improving.

The winter fuel reversal is the proof point. The chancellor, who will not loosen her fiscal rule of funding day-to-day spending through tax receipts, has to find £1.25bn to pay the allowance to nine million pensioners this winter.

She is also under pressure to lift the two-child benefits cap, with Liz Kendall, Bridget Phillipson and Sir Keir Starmer all thought to want this to happen. That will cost up to £3bn.

There is pressure to change the disability cuts in order to get the welfare changes through parliament.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

The point is that the chancellor is under huge pressure to lift spending, not keep her foot on its throat, and that means into the autumn, the clamour for targeted tax rises will only grow.

Can Reeves sell this government’s ‘renewal’ story?

But amongst the top team, there is some guarded optimism.

The political pain of the winter fuel allowance U-turn has eased the pressure on the doorstep: one very senior Labour politician told me this week that last weekend was the first time in a long time that the matter didn’t come up on the doorstep and “the first time in a long while that it felt alright.”

On Wednesday, there will be pain. The headlines will scream cuts and open up talk about tax rises that will run right up to the budget in October.

But it will also be a moment where this Labour government can show voters in the form of dozens of projects and thousands of jobs, that it does have a plan to rebuild.

Read more:
Guide to the spending review
Five things you need to know about the spending review
New nuclear power station gets green light

It is a spending review that will define Labour in power for the rest of this parliament and how our country looks and feels for years to come.

The political aim is to do enough – be it on hospital waiting lists, energy bills, wages, or shovels in the ground – to persuade voters at the next election to give Labour another chance.

For months, MPs have been quietly grumbling that this Labour government is in power without a story to tell. On Wednesday, we’ll see how well Ms Reeves can write, and sell, the next chapter.

Continue Reading

Politics

Final two candidates confirmed in Labour’s deputy leadership race

Published

on

By

Final two candidates confirmed in Labour's deputy leadership race

Left-wing MP Bell Ribeiro-Addy has said she did not secure the nominations required to make it into the next round of Labour’s deputy leadership contest.

It means it is now a two-horse race between Education Secretary Bridget Phillipson and former Commons leader Lucy Powell, after the other three contenders pulled out.

Politics Live: Read Lord Peter Mandelson’s letter to US embassy staff after being sacked

In a statement on social media, Ms Ribeiro-Addy said: “Unfortunately, I have not secured the high number of nominations required to proceed in the deputy leadership contest.

“I am disappointed that the full range of Labour members’ views will not be represented on the ballot paper.”

The required nominations from fellow Labour MPs was 80, which Ms Phillipson surpassed yesterday evening with 116 votes. Ms Powell was just shy of the threshold at 77 as of 7pm Wednesday, however many MPs have declared their backing for her since so she is expected to make it through.

Bell-Ribeiro-Addy
Image:
Bell-Ribeiro-Addy

The deadline to reach 80 was 5pm Thursday, with a final tally expected to be published later this evening.

More from Politics

Nominations only opened on Tuesday, leading to accusations from the left of a “stitch-up” aimed at preventing outsiders from having time to shore up a high level of support. (80 MPs is 20% of the parliamentary party).

Labour’s ruling National Executive Committee decided on the rules of the contest, which was triggered by the resignation of Angela Rayner after she admitted to underpaying stamp duty on a flat she bought in Hove.

Initially six people entered the race but housing minister Alison McGovern dropped out on Wednesday afternoon, conceding she was not going to get the support required. She had just two official nominations at the time.

Dame Emily Thornberry and Paula Barker withdrew this morning, having less than 15 nominations each as of last night’s tally.

Please use Chrome browser for a more accessible video player

Length of race ‘doesn’t feel right’

Many MPs had wanted a third candidate to make it to the next round to offer an alternative to Labour members, who will decide on the winner, as Ms Powell and Ms Phillipson are seen to be similar.

Ms Powell, the MP for Manchester Central, was a member of government until last week when she was sacked in Sir Keir Starmer’s reshuffle.

One reluctant backer told Sky News that while she is “more left than Bridget” she is “hardly a socialist”.

However, another of her supporters said she gave an impressive pitch at an online hustings event on Wednesday night, when she argued that no longer being in government would work in her favour.

They told Sky News: “Her pitch is that she’s been the shop steward of the parliamentary Labour Party (PLP) in government, but now she’s not in government, she can dedicate herself to the role of deputy leader full time without a department to run. She wants to focus on defining our voter coalition and making sure we’re speaking to them.”

The same MP suggested Ms Phillipson might be too busy to take on the deputy leadership role properly, especially as she is overseeing reforms to SEND (Special Educational Needs and Disabilities) “which could be a horror show”.

However, while Ms Powell might be the preferred choice for those who want a candidate independent of the party leadership, Ms Phillipson is popular with MPs loyal to the government.

The contest is an unwelcome distraction for Sir Keir, who just last week launched his phase two “reset” following a difficult first year in office and weeks of negative headlines on immigration.

This was before the row over Ms Rayner’s tax affairs kicked off – forcing her to also quit as housing secretary and deputy prime minister and sparking a wider government reshuffle.

Continue Reading

Politics

Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

Published

on

By

Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

Standard Chartered-backed Zodia Custody has exited its Japan venture with SBI Holdings after two years, with both firms calling the move a strategic realignment.

Continue Reading

Politics

MPs want Mandelson back in Britain to face questions over Epstein ties

Published

on

By

MPs want Mandelson back in Britain to face questions over Epstein ties

MPs are demanding Peter Mandelson appears on British soil to give evidence on his relationship with paedophile Jeffrey Epstein.

But there is frustration within parliament at Lord Mandelson’s ability to avoid scrutiny, as Sir Keir Starmer faces mounting pressure to sack him as ambassador to the US over his links to the deceased billionaire.

It comes after it emerged the Labour peer, who has said he wishes he had never met Epstein, had written him a 2003 birthday note in which he described him as his “best pal”.

According to reports in Bloomberg and The Sun, he also sent Epstein messages of support while he was being investigated for sex offences, telling him he was “following you closely and here whenever you need”.

Politics Hub: Follow the latest from Westminster

Sky News has learned that the powerful Foreign Affairs Select Committee of MPs made a request to hear from Lord Mandelson after he was appointed by Sir Keir last year, but this was blocked by the Foreign Office.

Lord Mandelson‘s status as a member of the House of Lords means the committee cannot force him to appear before them. People overseas can also not be compelled to give evidence.

Committees have the power to summon people to give evidence and find them in contempt of parliament if they do not comply.

Lord Mandelson’s failure to appear adds to the controversy around a lack of government transparency sparked by the decision to not let national security adviser Jonathan Powell give evidence to the Joint Committee on the National Security Strategy.

Mike Tapp, the Home Office minister, told Sky News that it is “important we have full answers” on Lord Mandelson’s relationship with Epstein.

Asked if he should face the scrutiny of parliamentary committees, Mr Tapp said: “What is important to me, and I’m really clear on this, is we do have the full answers on this.

“But Sir Keir Starmer has been clear yesterday in the House that all of the answers are there.”

Conservative MP and FAC member Aphra Brandreth is the only person on the committee to publicly call for Lord Mandelson to give them evidence on the ambassador’s links to Epstein.

Sky News understands that others on the committee are keen for Lord Mandelson to speak to them, but have decided not to go public. As the committee make-up mirrors that of parliament, most members are Labour MPs.

Please use Chrome browser for a more accessible video player

Beth’s breakdown: PM grilled over Mandelson

Read more on Mandelson:
Starmer backs his ambassador
What was his relationship with Epstein?
The disconnect between his claims and letters to Epstein

Ms Brandreth said in a statement: “At a time of huge instability around the globe, it’s vital that the UK’s ambassador to the US is focused completely on his job

“As a member of the Foreign Affairs Committee, I would welcome the opportunity to question Lord Mandelson on his ability to carry out his duties to the UK.”

She shared a letter written by fellow Tory MP and former Foreign Affairs Select Committee chair Alicia Kearns.

In the letter, Ms Kearns called on current chair Dame Emily Thornberry to summon Lord Mandelson, question him and put the concerns of MPs to him.

Ms Kearns also wants to know what questions Dame Emily has asked the Foreign Office since the appointment of Lord Mandelson, and to find out “how substantial” his relationship with Epstein was.

Ms Kearns told Sky News: “Months and months have passed with no action from the chair of the Foreign Affairs Committee, instead, there has been an unsettling silence from her on all things Mandelson.

“I would have summoned Mandelson long ago, it’s the chair’s duty to get the answers parliament deserves. It’s all too evident Thornberry has long been focused on her next role, not the one she’s been elected and paid to do.”

In January, Dame Emily raised Lord Mandelson’s appointment with Foreign Office minister Stephen Doughty.

She said the appointment was “inspired” – before asking the minister and government to “allow Lord Mandelson the time to come before my committee before he leaves for the United States”.

Mr Doughty said: “I am sure that we will consider any request that my right honourable friend makes in due course in the normal way in which we consider requests from her committee.”

The FCDO has been approached for comment.

Sky News’ deputy political editor Sam Coates reports that the lead civil servant in the Foreign Office, Ollie Robbins, has written to Lord Mandelson to ask a series of questions.

These questions include: When did you last meet Jeffrey Epstein before he took his own life? When did you last accept hospitality? What were your last business dealings with?

It is not known if Lord Mandelson will respond.

👉 Follow Trump100 on your podcast app 👈

Please use Chrome browser for a more accessible video player

Will Lord Mandelson have to be replaced in US?

Meanwhile, Labour MPs Andy McDonald, Bell Ribeiro-Addy and Kim Johnson have called for Sir Keir to sack Lord Mandelson.

The SNP’s Westminster leader, Stephen Flynn, also urged the prime minister to remove Lord Mandelson without further delay – warning his “reputation is now on the line”.

But a source within diplomatic circles who has known Lord Mandelson told Sky News correspondent Rhiannon Mills they believe the US ambassador “can ride it out”.

“Unless there is worse to come, if he can stomach the attention, he can ride it out. In the UK residence in Washington, with its grounds and security, it is easy to hide away,” the source said.

“The most important part of Mandelson’s role as ambassador is his relationship with the US administration, they will not be the least bit fussed about this. They have bigger problems.

“This isn’t going to be a big story in the States as the focus is on Trump and dozens of other prominent American figures. The US press have lots of other fish to chase”.

Continue Reading

Trending