Saturday, November 30, 2024
How Trump has changed the Brexit narrative
Freedland says that the November 2024 event that will have the most enduring global impact is the election of Donald Trump and although some in the higher reaches of the UK government are surprisingly relaxed about that fact, reassuring themselves that, in effect, we got through it once, we’ll get through it again, this is not going to be like last time:
Whether that’s complacency or naivety, it’s a mistake. This is not like last time. As Mark Leonard, director of the European Council on Foreign Relations, put it to me: “Trump is different and the world is different.” During his first term, Trump was hemmed in by the establishment types he had appointed to key jobs. Now he will be unbound. Back then, there was no war in Europe, China was relatively cooperative and Britain was still in the EU. That’s all changed now.
Consider what Trumpism, if implemented, means for the world. It would dismantle the post-1945 order, underpinned for eight decades by the US. In that period, the US acted as both guarantor for a system of global trade and defensive umbrella for the western alliance, with Britain and Europe the obvious beneficiaries. Playing that role came at a cost for the US, but successive presidents believed it was worth it, because a stable world was one in which the US could prosper.
Trump marks a radical break from that thinking. He believes those previous US presidents were suckers, ripped off by allies taking a free ride at US expense. He denies the US has any greater responsibilities than any other country: it should sacrifice nothing, looking out instead solely for itself. He’s happy for the US to be No 1 in the world, but not the world’s leader. The two are different. Like the slogan says: it’s “America first”.
For China, Russia, the Gulf states, Brazil and others there is some relief at that: they relish a future without a scolding Washington sticking its nose into their business. But for Europe, including Britain, it’s a disaster. In terms of both defence and the economy, our societies are predicated on a US-led world that will soon no longer exist.
The impact will be felt most sharply in Ukraine, which is weeks away from seeing US support fall away. Leonard fears a “Yalta-type settlement sealed by Trump and Vladimir Putin over the heads of European countries”, one that will reward Putin’s aggression and leave him emboldened. That leaves more than the likes of Moldova and the Baltic states feeling vulnerable. As the Guardian reported today, “Germany is developing an app to help people locate the nearest bunker in the event of attack. Sweden is distributing a 32-page pamphlet titled If Crisis or War Comes. Half a million Finns have already downloaded an emergency preparedness guide.” Berlin is taking steps to get the German public kriegstüchtig: war-capable.
On the continent, it’s become an urgent question: can Europe defend itself either without America or, at best, with less America? European defence spending is up and there is talk of shifting the industrial base, repurposing factories, to allow for a fast and massive, Europe-wide programme of rearmament. Our nearest neighbours understand that if the US president no longer believes in the core Nato principle of mutual defence – one for all and all for one – then, at the very least, Nato’s US pillar is gone. If Nato is to survive, the EU pillar will have to bear much of the weight alone.
It’s not clear that this penny has quite dropped in London. And remember there is a double threat here. Trump also plans to protect US domestic industry by slapping tariffs on imports from the rest of the world. China is likely to be hardest hit, with a 60% charge, but Trump wants a “universal” tariff of up to 20% on all goods coming into the US – including from Britain. For a trading nation such as the UK, that spells calamity.
He says that we can, of course, spend more on defence, and work more closely with our European allies to improve our security, but when it comes to a trade war then Brexit has left us isolated and much weakened. He adds that Britain alone would be all but impotent against the might of the US and that there is only one nearby market that is of comparable heft to the US, whose threats to retaliate against US tariffs would have a deterrent effect, a body, incidentally, that happens to be a virtuoso in the realm of trade and trade disputes - the European Union
What’s more, these two spheres, military and economic, are no longer as distinct as they once were. When states confront each other, they no longer do it solely through bombs and bullets. Everything else gets weaponised too, whether it’s the financial system through sanctions, the supply of energy or food or technology. Witness Russia’s war against Ukraine. As it happens, these are all areas where the EU’s particular brand of cooperation can help. So when Russia moved to choke off the gas supply to individual European countries, the EU was able to step in and connect what were previously separate energy grids, thereby thwarting that threat.
The point is, the landscape of 2016 – that fateful year – no longer exists. Plenty of Brexiters believed, in good faith, that a buccaneering, free-trading Britain could thrive in a world of open borders. But that world has gone now, replaced by one of war, barriers and Darwinian competition. Whatever case you could make for Britain being out of the EU in the Obama era of 2016 makes no sense now.
I don’t expect Starmer to announce a plan to rejoin the EU tomorrow. But it’s time for outriders to start riding out. Labour MPs, perhaps the odd minister, can begin to make the case that is becoming increasingly obvious to many millions of Britons. The polls are saying it, the governor of the Bank of England is saying it. And when immigration levels are four times higher now than when we were in the EU, the issue that served as the Brexiters’ trump card lies in shreds. One by one, the premises of Britain’s 2016 decision are crumbling.
I understand the political calculus that made Labour believe Brexit was an issue best avoided. But the reality around us is changing and politicians, governments especially, have to adapt to it. In the age of Trump, when the US is no longer the predictable guarantor it once was, Britain cannot thrive alone and in the cold. It’s not ideology or idealism, but hard-headed, practical common sense to say our place is in Europe – and to say so now.
Starmer needs to wake up to this reality and start to do something about it.
Friday, November 29, 2024
Union lanches legal action over winter fuel payments
The website says that Unite claimed the Government did not follow the correct procedure in making the decision, which will see around 10 million pensioners miss out on the benefit:
The union had threatened legal action earlier in November and announced on Thursday that it had applied to the High Court for leave to proceed with a full judicial review after receiving an “unsatisfactory” response to its demand that the Government reverse its decision.
Sharon Graham, Unite’s general secretary, said: “Labour’s decision to pick the pocket of pensioners was wrong on every level. The government has been given every opportunity to reverse its decision and it has failed to do so.
“This is a rushed, ill-thought-out policy and the government clearly failed to follow the proper legal measures before executing it. With winter approaching the courts must now hold the government to account and reverse this cruel cut as quickly as possible.”
The union said it hoped the court would grant an urgent hearing on its case in the context of “worsening weather conditions and dropping temperatures”.
In its pre-action letter, the union said it believed the Government had breached its legal duties by not referring the cut to the Social Security Advisory Committee (SSAC) and by failing to consider the impact on disabled people, among other grounds.
Ministers are not required to refer regulations on benefits to the SSAC if they are a matter of “urgency”, something the Government relied on when implementing the winter fuel cut.
The Government also conducted an “equalities analysis”, which was released under the Freedom of Information Act, but has been criticised for not carrying out a full impact assessment of the policy.
The bid for a judicial review will further strain relations between the Government and Unite, which has been one of Labour’s main donors but grown increasingly distant from the party since Sir Keir Starmer became leader.
This could run and run.
Thursday, November 28, 2024
Welsh Tory Leader under pressure
They say that a series of controversial “gaffes” by the most senior Tory in Wales has caused MSs to become “nervous” about the direction he was taking the party, leading to Davies bring informed on Wednesday evening that more than half of his group have asked for him to resign from his leadership role:
Pressure has been mounting on Davies since the Senedd’s summer recess when a number of senior Tory figures and members of his own shadow cabinet publicly lambasted his behaviour following a series of stories by Nation.Cymru.
In August, he was accused of Islamophic race-baiting by the Muslim Council of Wales after he posted a number of incorrect claims about Halal meat in Welsh schools to his social media.
One post published to X, formerly Twitter, went viral after it was amplified by anti-Muslim activist Tommy Robinson.
The rift in the Senedd’s shadow cabinet appeared to deepen further following another social media stunt at the Vale of Glamorgan show.
Davies and his team had constructed a home made ballot box to canvass the public on whether they thought the Welsh Parliament should be abolished.
Supporters and associates of the politician then began to secretly manoeuvre to change the party’s policy so it would support the abolition of the Senedd
Davies was later pressured by his Tory MSs to make an official statement rejecting calls for the party’s stance on devolution to change.
The rumblings of a coup appeared to lose pace after the group returned to the Senedd in the autumn for a new term.
But tension began to mount again this month after comments Davies made to the tabloids about a Welsh Government report which allegedly suggested dog-free zones could tackle racism.
The ethnic minority group at the heart of the viral news story said Davies had “cherrypicked” lines from the report “out of context, misrepresented and used as clickbait to drive engagement.”
An email exchange shown to Nation Cymru revealed how the head of organisation had reached out to Davies asking him to stop reinforcing the claims because some participants were being subjected to a “barrage” of racist abuse and hate mail.
The Welsh Tory leader responded by doubling down on his stance and arguing that nothing he had said on the issue was “untrue”.
He later discussed the issues on a podcast famous for offering a platform to Tommy Robinson and other far-right figures.
Davies also attacked a Welsh Government incentive scheme to recruit BAME teachers – a cause previously supported by one of his group.
Despite some MSs disagreeing with their leader’s comments, a statement was put out backing Davies without the full group’s sign off first.
Many of Tory figure’s divisive talking points and trademark Twitter persona are said to be the handiwork of his chief aide George Carroll who is a councillor in the Vale of Glamorgan.
Carroll recently lost his bid to become the Chairman of the Welsh Conservatives.
During his campaign he promised a members ballot on whether abolishing the Senedd should become party policy.
He also planned to change the rules around incumbency rights for sitting MSs ahead of the 2026 Senedd election.
Such a move could have seen some current members deselected.
Davies threw his support behind his senior advisor while the rest of the Tory Senedd group backed the winning candidate.
With Reform on the rise in Wales, maybe Welsh Tories feel that having Andrew RT Davies in a leadership role does not distinguish them enough from Farage's party.
Wednesday, November 27, 2024
Labour's misdirected tax rises
The Guardian reports that well-paid City lawyers and other self-employed partners at businesses including top accountancy and private equity firms have been spared the increases to national insurance contributions announced in October’s budget, in a move that will deny the Treasury “billions” of pounds of potential revenue.
The paper says that members of limited liability partnerships (LLPs) were not included in Rachel Reeves’ changes to employer national insurance contributions (NICs), which were raised to 15% from April 2025, while the threshold at which contributions are due was also lowered to £5,000 from £9,100:
The measures, expected to ultimately raise £25bn a year, have drawn criticism from a string of large businesses, including retailers and hospitality firms, who say they will be forced to cut jobs and raise prices. Separately, thousands of farmers have protested against the changes to inheritance tax affecting agricultural and business properties.
Top partners at City law and professional services companies that operate as LLPs can take home salaries of £1m and upwards, but will not be affected by the increase in contributions.
Most members of LLPs are considered self-employed for national insurance purposes, and pay the lower class 4 rate of contributions. Currently, class 4 workers pay a 9% rate on profits between £9,568 and £50,270, with an additional 2% paid on profits above the upper limit.
Before the budget there had been speculation that LLP members would also have been affected by the changes, according to the Law Gazette, which is published by the Law Society, the professional body for solicitors in England and Wales.
It has also reported estimates that the Treasury could have raised £4bn from four of the five firms that make up the so-called ‘magic circle’ of City law firms that operate as LLPs, including A&O Shearman, Clifford Chance, Freshfields and Linklaters.
Tony Williams, principal at the legal consultancy Jomati, said he estimated that such a move could have raised “into the billions”.
Keir Starmer warned in August that the October budget would be “painful” given the state of the public finances. The prime minister, who worked as a lawyer for decades before becoming the director of public prosecutions, added that “those with the broadest shoulders should bear the heaviest burden”.
Historically, self-employed workers paid a lower rate of national insurance, on the basis that they did not receive benefits they would have been entitled to as employees, including holiday pay, sick pay, minimum wage and pension contributions.
Williams added that Reeves could have closed the apparent loophole by bringing in a higher threshold for the self-employed, either at the current upper limit of £50,270, or alternatively by adding a higher rate over £100,000.
“When you think about the number of firms in the City and others where people are earning significantly over £1m, it could be £2m or £3m,” said Williams.
He added that the government may not have looked at changing rates for partners at LLPs to avoid breaking its manifesto promise not to increase taxes on working people.
The self-employed also used to pay lower rates of national insurance, as they were previously not able to access benefits such as unemployment benefit.
“But that rationale doesn’t stack up very well in this environment,” Williams said.
None of this sounds like the sort of omission a Labour government should be making.
Tuesday, November 26, 2024
A matter of perspective
This movement attracted much derision from the Tories, those fly-by-night charlatans who now form the bulk of Reform and the right-wing media, all of whom argued that the country had spoken and to reopen the debate again would be undemocratic. And yet these very same people appear to have had a change of heart, it seems that they no longer believe that a democratic election should be the final word.
The Independent reports on the now two million strong petition calling for another General Election just five months after the last one, an election that produced a landslide Labour majority, albeit within a flawed electoral system.
The paper says that the petition comes amid growing backlash over Labour’s budget, which has sparked controversy for hikes to national insurance and extension of inheritance tax to include farms, among other unpopular proposals which aim to fill the spending black hole.
And there amongst the usual suspects of those initiating this petition is the billionaire Trump-ally Elon Musk, who has repeatedly criticised Sir Keir Starmer since he came to power. So much for his outrage at Labour interfering in the US presidential election. But who exactly is signing this petition? The paper has carried out an analysis:
The petition was only set up on November 20, but has already received over 2,184,000 signatures at the time of writing.
The majority of signatories to the petition are concentrated in Conservatives or Reform safe seats.
Many of the names in these seats may seem familiar, as vocal critics of the current Labour government. The MPs in constituencies where the petitions have received the most signatures include leader of the opposition Kemi Badenoch, former leadership hopeful James Cleverly, and topping the list, Alex Burghart.
The petition is highly popular among constituents of Reform leaders Richard Tice and Nigel Farage, with 9,550 signatures between the two constituencies.
However, over a million signatures have come from constituencies with a Labour MP.
The Labour MP representing the most constituents calling for a general election is Kevin McKenna, with 4,609 constituents signing the petition.
Mr McKenna won his constituency of Sittingbourne and Sheppey by just 355 votes in July.
The constituency had a low voter turnout of just 51.9 per cent and was historically Conservative.
It is likely that his narrow win made many residents unhappy in an area with high Tory support; but even so, it is unclear whether those signing the petition would be able to oust Mr McKenna in another election.
However, this discontent may still cause some concern for Labour MPs with small majorities. In the Derbyshire Dales, Labour MP John Whitby won by 350 votes, and over 4,426 of his constituents have signed the petition to call an election. MPs in Ribble Valley, Middlesborough South, and Redditch face a similar dilemma.
A high number of constituents in South Norfolk have also signed the petition in South Norfolk, where Terry Jermy is the Labour MP.
Mr Jermy has faced recent pressure following the farmers protests, as his constituency is being eyed by the Tories and has 408 farm holdings.
Even some constituents of Labour leaders have signed the petition calling for a new election, with over 3,000 signatures in Deputy PM Angela Rayner’s seat.
At least 14,276 of the signatures were from people based outside the United Kingdom, according to self-declared locations required in the petition forms.
Thousands of signatures came from the United States, Spain, France and Australia.
The petition has also received hundreds of signatures from Thailand, UAE and Cyprus.
There are even five signatures reported from the Vatican City, where the Pope resides.
Only British citizens and UK residents are allowed to sign this type of petition to be considered by Parliament.
However, the rapid scale of the petition may make it more difficult to verify the identities of the two million-plus signatories. The Independent has reached out to the government to confirm how many of the signatures are verified.
This is not helped by non-citizens such as billionaire Elon Musk promoting the petition, saying on X that “the people of Britain have had enough of a tyrannical police state”.
I would argue that the lies and misrepresentation put about by Brexiteers in 2016, together with the many unexpected developments and dificulties in delivering the exit from the EU made the case for a second plebiscite a compelling one. Leaving the EU is final, with no second chance and is unlikely to be undone for generations, if at all.
In contrast, Keir Starmer's government has to face another general election is due course, when people will be able to judge for themselves whether Labour has been faithful to their promises and vote accordingly. The case for another contest so soon is entirely a partisan one, being made for political advantage, and has little to do with the best interests of the country.
I suppose it's all a matter of persepective.
Monday, November 25, 2024
Intimidation and cancellations
Joe Mulhall, an expert in far-right extremism, told The Independent venues had been forced to call off events after getting calls and emails from members of the far-right.
The cancellations happened after the leader of the National Front Tony Martin turned up at his book launch at Waterstones in central London, he said.
Mr Mulhall, whose new book is called Rebel Sounds: Music as Resistance, explained the book shop on Gower Street called the police in response to Mr Martin attending the launch.
The historian, who is director of research at leading anti-fascist charity Hope not Hate, recalled how Mr Martin had just sat there quietly before leaving.
Anti-migration protesters try to go into Holiday Inn Express Hotel housing asylum seekers on 4 August in Rotherham (Getty Images) He explained Mr Martin posted on social media site X, formerly known as Twitter, with the details of an event promoting his book and urged people to ring up the venue and “politely tell about Joe”.
Mr Mulhall added: “Post the riots, people are just understandably really terrified of the far-right. They have seen what that politics looks like for these people. And so, even if we don’t know if anyone was actually going to turn up to these events, there is the risk or the fear of people turning up.”
Mr Mulhall said the event cancellations had been “really frustrating” as he explained he thinks he is being targeted for his work with Hope Not Hate.
“It is quite sad in the sense that it feels like we are going backwards,” he added. “It’s like we are back at the stage where the far right are strong enough and scary enough that it’s not possible to sit in a bookshop and give a talk about music and history.”
He said it was difficult to work for years on the book and now be struggling to discuss it in person.
“It’s out in the world and you want to be able to tell the world about it,” Mr Mulhall added. “And the book is about that - the way that music can be used to fight oppression, fight racism, fight dictatorships.”
It comes after the BFI London Film Festival (LFF) cancelled a screening of a documentary called Undercover: Exposing The Far Right - which follows campaigners from Hope Not Hate - over “safety” fears last month.
“I don’t think there should be any street, town, or bookshop in the country where people can’t meet because of the far right and if we are in that situation, that means it’s bad news,” Mr Mulhall said. “I don’t blame the bookshops - especially after the riots, people are scared. It’s a sadness of where we are.”
He explained threats against him and Hope not Hate have worsened since the explosion of far right anti-immigrant violence across the UK over the summer.
Rioters attacked mosques, ambushed riot police, set fire to a hotel housing migrants and torched a public library and Citizens Advice Bureau building in the aftermath of the fatal stabbing of three young girls at a Taylor Swift-themed holiday club in Southport at the end of July.
There were multiple incidents of ethnic minorities being attacked on the streets. In the aftermath of the Southport stabbing, false information spread rapidly online, wrongly claiming the suspect was a Muslim asylum seeker who came to the UK on a small boat crossing.
This is a very worrying trend. For the sake of freedom of speech, venues should not be intimidated into cancelling events by anybody, Is it me or does the current atmosphere in the UK feel very much lime Germany in the late 1920s?
Sunday, November 24, 2024
Government inefficiency minister
The paper says that according to records published by watchdog IPSA, Mr Rees Mogg claimed the eye-watering sum for the “relocation of paintings etc from Parliament” - despite owning a £5 million mansion a stone’s throw away.
In 2018 he bought and renovated a five-story home just 390 yards from the Palace of Westminster, where he lived with his wife and six children.
The property is infamously closer to Parliament than 10 Downing Street.
No wonder he is lost the job as efficiency minister.
Saturday, November 23, 2024
Social care under threat
They add that the Nuffield Trust said that while the government has consistently spoken of its long term ambition to reform the social care sector, there may be “little of it left” to reform unless it takes urgent action to stabilise the care market financially:
The care sector faced an extra £2.8bn cost burden from next April, the trust estimated, adding most care providers will struggle to shoulder their share of the bill, and at least £1bn extra was needed to keep the market afloat.
Care providers, councils and charities have all warned of the potentially dire consequences of national insurance contribution (NIC) changes and rises in the “national living wage” announced by the chancellor, Rachel Reeves, last month.
Although the NHS and councils are protected from the rise in employers’ NICs, charity and private providers of state-funded services from care to homelessness are not, placing them under what some have called “existential” financial pressures.
The government has refused to offer national insurance exemptions to social care providers, although it has promised a financial lifeline for hospices amid fears the charity-run end of life care services face cuts and closure as a result of rising costs.
The Nuffield Trust calculates the cost to England’s 18,000 care providers of changes to NIC and national living wage rises will more than wipe out the extra £600m allocated to care in last month’s budget.
With councils – which fund 70% of adult social care – struggling financially and unlikely to meet rising contract costs, many providers will face “tough decisions” including laying off experienced highly paid staff, reducing staff hours, or freezing pay for those earning above the minimum wage, the trust said.
Other care providers may be forced out of business, it added. “Without additional funding from central government, the combined financial impact of the NIC rise and the new minimum wage level might see not just single providers going out of business but large swathes of the market collapsing.”
The most devastating consequences of such a market collapse would be for individuals using care services, whose lives would be disrupted, and by people who struggle to access or afford the care and support they need, the trust said.
Natasha Curry, the deputy director of policy at the Nuffield Trust, said: “Faced with a series of financial black holes in almost every corner of the public sector, the government faced the unenviable task of urgently raising funds at the budget to plug them. But by choosing not to provide support to adult social care providers in covering the costs of the rise in NICs, the result is likely to be catastrophic.”
She added: “The government rightly wants to reform social care, but with the real prospect of swathes of the social care market collapsing under these extra cost pressures, there may be little left of it to reform unless the government takes urgent action to cover NICs for adult social care providers.”
Nadra Ahmed, the executive co-chair of the National Care Association, which represents small and medium sized care providers, said: “With no tangible investment over the decades the impact on the increased financial burdens put upon providers is likely to lead to catastrophic consequences for those who rely on social care support.”
No doubt the same situation applies in Wales. If the government is to sort out the health service then they have to get social care right as well. This is not a good start.
Friday, November 22, 2024
Another side of Farage
The paper says that Farage is the chair and a co-founder of Action on World Health, which campaigns to reform or replace the WHO, arguing that it should not be putting pressure on governments to bring in public health measures.
They add that the other co-founder is David Roach, whose firm provides secretariat services to the Global Initiative on Novel Nicotine, which advocates for nicotine pouches and other products and that Roach’s firm has also lobbied in the past year on behalf of a vaping company called ANDS:
In the Action on World Health “manifesto”, released before the UK election, it opposed “excessive regulation” on vaping. It said: “Adults should be treated like adults, instead of the WHO bullying countries into treating its citizens like children through excessive regulations on food, alcohol, fizzy drinks, and vaping products that are 95% less harmful than smoking.”
Farage launched the group in May, and his role at the organisation does not appear on the MPs’ register of interests. It is understood Farage has made a late declaration to the register in recent weeks, but it has not yet appeared publicly.
His spokesperson had no comment on the group’s links to consultants working with the novel nicotine industry, which were uncovered jointly with the Good Law Project.
The spokesperson said: “Nigel Farage is not paid in his role at Action on World Health. He is chairman of the organisation because he has long believed that the WHO is bloated, undemocratic and a complete catastrophe.”
Roach is the campaign director of Action on World Health, and two more of his staff members from his company, David Roach Consulting, are listed as working for the organisation.
Asked about his clients, Roach said no vaping or novel nicotine companies were providing funding to Action on World Health, and that David Roach Consulting was not being paid for its services to the organisation. He said Action on World Health did not have a public list of funders because that would breach confidentiality.
Asked whether it should be transparently declared by Action on World Health that David Roach Consulting was participating in a campaign against the WHO while having had clients in the vaping and nicotine industry, Roach said: “We do not currently work with any vaping companies, but I imagine most novel nicotine companies would support AWH’s aims to reform or replace the WHO given its misguided approach to reduced-risk products.”
He added: “Action on World Health (AWH) is an international campaign group committed to reform all aspects of WHO activities. Health policies which infringe on national sovereignty should be under the control of nation states, not unelected global bodies. It should not dictate or put pressure on governments to implement public health measures which interfere with domestic policies; and rather than pushing for one-size-fits-all treaties and mandates, the WHO should instead be mandated to advise and facilitate international cooperation.
“We need a complete review of the WHO with a focus on taking back control of national public health in areas where it continually overreaches.”
Jo Maugham, the director of the Good Law Project, said campaign groups without transparency around their funding should be treated with scepticism about who was financing them. He said “social media influencers selling toasters” had to declare any hidden funders, so “the law really should treat the sale of political ideas in the same way”.
I always said Nigel Farage was bad for our health.
Thursday, November 21, 2024
Rebuilding the Quango state?
The jury is still out on the eventual bonfire of these bodies but it was not a process, as far as I'm aware that was followed in England. Now, it appears that we have come full circle with Keir Starmer's Labour government creating or overhauling 17 state agencies in their first few months in power to help them deliver on manifesto promises.
The Guardian tells us that an Institute for Government report has warned of some of the pitfalls when setting up government agencies from scratch, saying: “Successfully creating a new public body is difficult and entails high fixed costs in terms of time, budget and leadership focus.”
They found the price tag of creating a new government department can be £15m in set-up costs, plus £34m in lost productivity:
Matthew Gill, the author of the IfG report, said: “Public bodies – from the National Wealth Fund to the National Care Service – will be central to the Labour government’s success. But they are hard to build well and many questions about the funding, governance and remit of the 17 bodies so far announced remain unanswered. Our report provides a guide, based on lessons learned that have not been clearly set out before.”
The new government has wasted no time in bringing forward legislation to set up bodies such as the Fair Work Agency and the Armed Forces Commissioner.
However, there is little detail on the costs, with the impact assessment for the new Fair Work body stating: “It has not been possible to estimate … the set-up costs of the FWA associated with bringing together existing enforcement bodies [or] the costs associated with new state enforcement responsibilities including the enforcement of holiday pay regulations.”
Other bodies, such as the football regulator, will ultimately be paid for by an industry levy. The impact assessment for the legislation said: “The set up costs will initially fall to the exchequer. Once the regulator is operational, levy payments are expected to fund the regulator. The levy will claw back the majority of costs incurred during the set-up of the regulator, and will also cover the ongoing running costs of the regulator.”
Some public bodies promised by the Labour in its manifesto, including the Ethics and Integrity Commission, have not yet been established or detailed in legislation yet.
The IFG said most new governments set up new public bodies and that between 2000 and 2023, between two and 12 public bodies were established each year – although a much greater number have been abolished.
Setting out 10 lessons for setting up public bodies successfully, it said it was necessary to define its mission clearly, pointing to the Independent Commission on Civil Aviation Noise (ICCAN), which was abolished within three years because politicians, civil servants and leaders never agreed what it was for.
It also highlighted the need to build support, giving the example of the Trade Remedies Authority (TRA) that was cut back two years after launch because new ministers were less committed to the value of a technocratic body shielding ministers from producer lobbying.
The IFG also said it was key for a public body to be resourced at the right level, pointing to the UK Health Security Agency, which faced financial uncertainty and big cuts in its first year, frustrating recruitment, even at board level.
Promising to set up these bodies is easy, but it is an expensive and time-consuming process and they don't always deliver. We shall have to see if this time will be different.
Wednesday, November 20, 2024
Consequences
The Guardian reports on analysis which shows that 50,000 more people will be in relative fuel poverty next year – and another 50,000 by 2030 as a result of this cut.
The paper says that the government's own analysis has found that cuts to the winter fuel allowance could force 100,000 pensioners in England and Wales into relative fuel poverty, as ministers come under mounting pressure over measures in last month’s budget.
They add that the figures, which are rounded to the nearest 50,000, take into account the impact of housing costs, but not of thousands more people claiming pension credit since a government campaign earlier this year. The analysis was published in a letter from Liz Kendall, the work and pensions secretary, on Tuesday, just as temperatures plunged and parts of the UK experienced their first snowfall of the year:
Downing Street admitted in September it had not done an impact assessment before making the change, although Labour said in opposition that such a move would lead to the deaths of 4,000 people. Kendall’s letter on Tuesday marks the government’s first attempt to quantify how many pensioners will be seriously affected.
The analysis shows that by 2030, 1% of those who have lost their allowance are likely to be pushed into relative poverty – defined as households with less than 60% of that year’s median income. This will have the effect of putting up the relative pensioner poverty rate by 0.6 percentage points.
Only half that number will be force into absolute poverty, however, defined as households with less than 60% of the median income of 2010/11.
The cuts to winter fuel allowance are unpopular with Labour MPs and supporters. One MP defied Labour whips to vote against the cut in September, while another 12 missed the vote without permission. Later that month, party members voted for a motion calling on ministers to reverse it.
The Scottish Labour leader, Anas Sarwar, pledged to reinstate payments in Scotland should his party win the 2026 Holyrood election, saying it would mean a “fairer system” for Scotland and show the public that “we have listened”.
The pledge comes days before another set of council byelections in Glasgow and after polling suggesting the unpopularity of UK government policies is harming Scottish Labour’s vote. At the general election Scottish Labour was well ahead of the SNP, but that lead has collapsed.
Sarwar said he had been “clear from the outset” that he thought Reeve’s pension credit threshold was too low and that he planned to reintroduce a universal payment for all pensioners, but tapered like child benefit is so that wealthier people receive less.
Caroline Abrahams, charity director at Age UK, said: “This government announcement confirms what we always knew: brutally rationing winter fuel payment, as ministers made the choice to do, will swell the numbers of pensioners already living below the poverty line – this year and into the future.”
Along with inheritance tax and employers national insurance contributions this is going to be one of the main political battlegrounds over the coming winter.
Tuesday, November 19, 2024
Budget sapping consumer confidence
The paper says that a survey by S and P Global Market Intelligence showed that consumer confidence dropped this month after households said the outlook for the economy had deteriorated and the prospects for their own finances had worsened:
The consultancy said the government had failed to build on the underlying improvement in consumer sentiment seen in the months before and after the general election.
Goldman Sachs said in a separate report that the increase in employer national insurance contributions (NICs) announced in the budget, raising £20bn for the Treasury, would force employers to pass on some of the cost in lower wage increases.
Analysts at the investment bank said they believed wages growth would slow as a result.
“We expect consumer spending growth to moderate in the second half of next year as real disposable income growth falls back,” they said. “This partly reflects slowing real wage growth; we expect private sector pay increases to cool, partly because of the employer NICs increase being passed on to consumers.”
S and P Global Market Intelligence said that since a high point in July, consumers had spent the rest of the summer and autumn more buoyant about their finances over the next 12 months than in the period before the Covid pandemic.
However, the survey in November found the “ongoing pressure on household finances has resulted in squeezed spending, higher debt and lower savings”.
The consumer sentiment index – a mix of surveys tracking consumer financial wellbeing, the jobs market, household spending, savings and debt – fell from 47.3 in October to 46.9 in November, where a number below 50 indicates contraction.
Chris Williamson, the chief business economist at S&P Global Market Intelligence, said: “A key concern going forward will be the labour market. Rising incomes and busier workplaces have underpinned much of the improvement in consumer sentiment over the past two years, but job security is showing signs of waning.
“Any intensification of job worries, spurred perhaps the recent measures announced in the budget, including higher employer national insurance contributions, could result in a further loss of consumer confidence. This would likely in turn hit consumer spending and economic growth.”
The Goldman analysts said they feared mortgage rates would drift higher as the Bank of England signalled high interest rates would be in place for a longer period.
Rachel Reeves may have to wait some for the growth she needs if she is to invest higher tax revenues into public services.
Monday, November 18, 2024
Time to stop the money laundering
Transparency International estimates that £1.1 billion worth of properties in London are owned by individuals tied up in money laundering. Now, leading political campaigners have said that the UK’s offshore financial centres must fall in behind plans to stop “dirty money” by publishing registers of corporate ownership, as the UK Government seeks to reverse this trend:
Labour’s Dame Margaret Hodge and the Conservative MP Andrew Mitchell hit out at “dither and delay”, ahead of this week’s summit between UK government officials and overseas territories, such as the British Virgin Islands (BVIs) and Cayman Islands, in London.
In an editorial for the Guardian, they accuse overseas territories and crown dependencies, such as Jersey and the Isle of Man, of trying to water down or ward off measures designed to counteract money laundering and other illicit transactions.
“We know all too well that the overseas territories and crown dependencies play a pivotal role in helping crooks and tax dodgers launder and hide their dirty money,” Hodge and Mitchell said.
“Dirty money underpins corruption, crime and conflict. It causes immense harm at home and abroad, enabling serious and organised crime and diverting resources needed for vital public services.
“Public registers, and the scrutiny that they bring, are the best antidote to the scourge of illicit finance.”
Mitchell and Hodge are understood to have corralled support from dozens of MPs across the political spectrum to ramp up the pressure before the joint ministerial council. The two-day event starts on Wednesday.
“We must stop the dither and delay of recent years and pierce the veil of anonymity that protects criminals and kleptocrats,” they said.
The duo accused offshore centres of reneging on a promise to introduce public registers by December 2023.
A key point of contention is whether the registers would be open to everyone or only those with “legitimate interests”, such as anti-corruption campaign groups.
Some overseas territories are opposed to fully open registers and British lobbyists have been working with them in an effort to persuade the government to accept a “legitimate interest” compromise.
The UK has acted as a refuge for this sort of activity for too long. The government must do everything it can to change this and use what powers and influence they have to make the overseas territories follow suit.
Sunday, November 17, 2024
Setting the financial speculators loose
The Mirror reports that our new Chancellor of the Exchequer, Rachel Reeves believes that the financial crisis era curbs have “gone too far2, and is seeking a lighter touch regulation of the City and the banks:
The Chancellor, delivering her first Mansion House speech, signalled lighter touch regulation of financial firms following restrictions imposed after the 2008 banking meltdown.
Ms Reeves has written to the UK’s City regulators telling them to “ensure a greater focus on supporting economic growth.” The Treasury insisted “high regulatory standards will be maintained” but rules should be “rebalanced” to drive growth and competitiveness.
David Postings, chief executive of industry trade body UK Finance said: “I strongly welcome her support for the sector.”
Ms Reeves’ aim for lighter touch regulation, delivered to the great and good of the City, comes with Labour’s number one priority to grow the economy in order to boost public spending and improve people’s living standards. But her recent Budget, which saw a number of tax raids on business, has drawn widespread criticism.
Another key measure to drive growth announced last night was reform of the pension system with the aim of unleashing up to £80billion of investment. They include speeding-up pooling of the near £400billion in local authority pension schemes into eight “megafunds”, whose firepower could be more easily deployed for infrastructure spending, from energy projects through to housing.
Louise Hellem, chief economist at business lobby group the CBI, said: “The UK has the second largest pool of pensions assets in the world so finding ways to reorient them towards long-term investment in businesses and infrastructure could drive economic prosperity.”
Amanda Blanc, chief executive at financial giant Aviva, said: “This is just what we need. Rebalancing regulation to be pro-growth will be a real boost to competitiveness, spur more investment in the UK and deliver better value for customers. Let’s get moving quickly on this crucial agenda.”
But independent pension expert John Ralfe warned the shake-up could expose pension savers to greater risk, adding; “If it goes wrong, they suffer.”
Rocio Concha, director of policy and advocacy at consumer group Which?, criticised another announcement by Ms Reeves, to review the Financial Ombudsman Service after what she called "lobbying by the industry". She added: "For its financial regulation plans to succeed, the government must look beyond the boardrooms of the City of London and listen to millions of consumers who have been struggling through a painful cost of living crisis. The Chancellor must ensure they are not further exposed to poor treatment at the hands of the financial sector."
It was precisely this sort of stand-off regulation that led banks to overreach and which caused the crash in 2008 in the first place, plunging us into a recession that we still haven't fully recovered from. What could possibly have led Reeves to believe that anything will be different this time?
Saturday, November 16, 2024
Bank of England chief warns of Brexit consequences
The paper said that speaking alongside the chancellor at the annual Mansion House dinner in the City of London, Andrew Bailey spoke about the importance of economic growth and outlined the impacts of the UK’s departure from the single market on trade:
While he said he takes “no position on Brexit per se”, he added: “But I do have to point out the consequences”.
“The changing trading relationship with the EU has weighed on the level of potential supply”, Mr Bailey said.
“The impact on trade seems to be more in goods than services, that is not particularly surprising to my mind.
“But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people”.
“The picture is now clouded by the impact of geopolitical shocks and the broader fragmentation of the world economy,” the Bank chief added.
The remarks come one week after Donald Trump swept to victory in the US presidential election, with many economists questioning the potential impact of proposals to hike tariffs on all US imports.
Such a move could put pressure on UK goods prices, contributing to rising inflation, experts have suggested. It has also triggered renewed calls for closer ties with the EU.
Last month, Treasury minister Tulip Siddiq warned that 60 per cent of the impact of Brexit is yet to materialise in a damning assessment of Britain’s departure from the European Union.
The Treasury economic secretary cited Office for Budget Responsibility (OBR) forecasts that the economy would shrink by 4 per cent in the long run due to Brexit, as well as warning that Britain’s imports and exports would end up 15 per cent lower than they would be had the UK stayed in the EU.
Rachel Reeves, meanwhile, used her Mansion House speech to argue that restrictions imposed after the 2008 banking crash “went too far”.
In an attempt to regain the trust of the finance sector, Ms Reeves will pledge to ease banking regulations and unveil the first-ever financial services growth and competitiveness strategy.
In his address, Mr Bailey also said the UK has experienced weaker productivity growth since 2008.
“We need to encourage business investment in the UK,” he said.
Let's hope the government is listening.
Friday, November 15, 2024
Is Wales' homeless crisis spiralling out of control?
Shelter Cymru have just published a shocking report that lays bare the housing crisis facing local councils in Wales.
The report says that demand for temporary accommodation in Wales has grown dramatically in recent years. In March 2021 there were 3,729 households in temporary accommodation, by March 2024, this had risen to 6,447 households. Currently more than 11,000 people are living in temporary accommodation in Wales, including almost 3,000 children:
Across Wales local authorities are struggling to cope with the impact of this level of demand, and many have shared with Shelter Cymru the challenges of finding suitable temporary accommodation to meet people’s needs. As part of our work to further understand the impact of rising temporary accommodation demand Shelter Cymru issued a Freedom of Information Request to all 22 Local Authorities in Wales in the summer of 2024. This report explores the results of these alongside publicly available information and shows that:
• The cost of temporary accommodation in Wales has more than doubled since 2021. The Wales-wide bill for temporary accommodation in 2020/2021 was over £41million. This has risen to over £99million in the last financial year, 2023/2024.
• The cost of temporary accommodation is increasing at almost double the rate that demand for temporary accommodation is rising. The number of households accessing temporary accommodation has increased by 75% in the period covered by this FOI request while the cost of temporary accommodation has grown by 140%.
• A central factor in these dramatically rising costs appears to be local authorities’ increased reliance on private sector provision to meet the needs of people in their area. Across Wales, over half of the people in temporary accommodation are living in B and Bs, hotels, holiday accommodation (such as static caravans) and private sector rental homes. In 11 of our 22 Local Authorities, more than two-thirds of people in temporary accommodation were in options provided by private sector businesses and individuals (Stats Wales, March 2024).
• Conversations with local authorities and people living in temporary accommodation show that these private sector options are routinely of higher cost and lower-quality than alternatives. A spokesperson from one local authority noted that hotel and B and B owners are “charging us more than they could charge tourists in the off-season and their hotels are full year-round housing people who would otherwise be homeless here. They know they’ve got us over a barrel.”
At the heart of these figures are people. People stuck in extended stays in hotels where they don’t have the cooking facilities to meet their family’s need. People waiting for adapted properties who are struggling to navigate unsuitable B and Bs. Families and children in noisy and unsettling environments that are damaging their mental and physical health.
Our current approach to temporary accommodation is dysfunctional. It is seeing large sums of public money being transferred to private businesses and individuals as local authorities struggle to meet the demands of our housing emergency. While 51% of our temporary accommodation placements are in private provision, conversations with local authorities suggest that the inflated costs of private sector options mean that considerably over half of the £99million spent on temporary accommodation last year went directly to private profits.
We need long-term solutions that ensure people have access to permanent homes to reduce the need for temporary accommodation. However, we know that this will take time, and that people are also suffering now, which is why we propose that long-term approaches be partnered with pragmatic steps in the medium term. This approach will help to retain public funds for public good and improve the experiences of people and families in temporary accommodation right now. If Welsh Government considered the recommendations in this report, it would enable local governments to take greater ownership of temporary accommodation provision – resulting in more suitable and better quality options for people who need it while bringing down the cost.
We cannot continue to rely on privately owned temporary accommodation to fill the gap left by a long-term failure to deliver the homes we need. Doing so not only fails to ensure people are provided with the level of accommodation they deserve but also provides some organisations the opportunity to capitalise on our homelessness crisis.
In summary we need more social housing, but in the short term we need good quality, publicly owned temporary accommodation to cut costs and to properly support families and individuals. How the Welsh Government reacts to this report will be critical.
In summary we need more social housing, but in the short term we need good quality, publicly owned temporary accommodation to cut costs and to properly support families and individuals. How the Welsh Government reacts to this report will be critical.
Thursday, November 14, 2024
Big Brother?
The paper says that calls have been mounted for live facial recognition technology to be halted amid questions over accuracy and privacy. They add that the software - currently being deployed in London, South Wales and Essex - allows officers to scan the faces of passers-by and check them against watchlists:
Several MPs raised concerns about software misidentifying innocent members of the public - particularly Black, Asian and minority ethnic groups. Labour MP Bell Ribeiro-Addy said: "We're veering dangerously close to becoming a police state with levels of surveillance that would only be deemed acceptable in the most autheritarian police states. It's not a matter of 'those with nothing to hide have nothing to fear', it's a matter of our basic privacy."
She pointed to research by campaign group Big Brother Watch which found 89% of facial recognition alerts to date wrongly identified members. Tory Shadow Home Secretary Chris Philp said current software is far more accurate.
Ms Ribeiro-Addy told a Westminster Hall debate: "People of colour are already disproportionately stopped and searched and the use of potentially flawed technology will only increase the rate at which ethnic minorities are stopped, further damaging trust in police in this community."
And she questioned effective it is, stating: "As far as I've been made aware it hasn't produced a substantial number of results. Our constituents are effectively being placed under constant surveillance and the notion of their presumed innocence has effectively been undermined."
MPs heard that vans with the specialist facial scanners are able to scan people in crowds. If they are not on a police watchlist, their biometric data is deleted within half a second.
If they do match, a police officer approaches them and asks them for ID. The technology - which identifies people by measuring dozens of features on their face - has been controversial, with campaign groups demanding it is withdrawn.
Lib Dem Bobby Dean said: "It's clear from the room that there's many, many doubts. We should think about halting the use of this technology until we've cleared up those doubts."
I agree. There needs to be a full review of this technology, how it is used and safeguards put in place before it is redeployed, if it is redeployed at all.
Wednesday, November 13, 2024
Budget threatens social care in Wales
The organisation, which represents care homes and independent care providers has warned that the controversial measures announced by Chancellor Rachel Reeves pose a “greater threat than Covid” to the sector and fears care homes and domiciliary care companies will inevitably be forced to close:
The only way to avert the impending crisis, according to CFW chair Mario Kreft MBE, was for the social care sector to be granted an NHS-style exemption from the increases to employers’ National Insurance contributions as well as support to meet the other additional costs.
With a 1.2% rise in Employer National Insurance contributions and a cut to the Secondary Threshold to £5,000 alongside the five per cent increase in the Real Living Wage to £12.60, CFW has calculated the sector in Wales faces a £150 million funding hole to plug. In North Wales that amounts to a gap of £40 million.
CFW revealed that 40 care homes in Wales had already been forced to close since the onset of the Covid pandemic, at least four of them in North Wales with a combined loss of 163 beds.
Even before the Budget, specialist business property adviser Christie & Co Wales faced a 10,000 deficit in the number of care home beds Wales needs over the next decade.
It comes at a time when demand is spiralling upwards, with the over 85 population set to double over the next 20 years.
The sector in Wales, said Mr Kreft, was made up mainly of smaller, community based care homes and nursing homes and were typically family-run businesses.
He said: “Without an exemption from these additional and potentially ruinous costs -whether that comes from the UK Government or extra funding from the Welsh Government – many care homes and nursing homes and home care companies face a real existential threat.
“These measures will see average size care homes facing extra costs of tens of thousands of pounds, with larger care providers facing even heftier bills amounting to hundreds of thousands.
“The social care sector already has large wage costs compared to other industries because of the number of workers it needed.
“To put it into context, a typical residential home where people don’t need nursing has a wage bill as a proportion to turnover of about 60 per cent. That rises in nursing homes to 65 per and more.
“For domiciliary care the percentage of wages to turnover is over 80 per cent.
“So when you look at the context of those figures and add it to what we have seen in the Budget, it’s a triple whammy.
“In Wales we won the argument that was insufficient and the Welsh Government through their guidance to local authorities and health boards have provided funds for the Real Living Wage to be paid which is currently £12 an hour outside London and is going up to £12.60, a five per cent increase.
“So most of the people in our care homes, our care workers, are going to get a five per cent increase in their pay packet while others will eligible for 6.7 per cent increase in the National Living Wages.
“But the point is, that is a massive and significant cost on the wage bill.
“And when you add the National Insurance rise, this all amounts to a massive extra cost on the wages bill.
“On top of all of that we have the new measures around inheritance tax which is going to be a major threat to the future security of these family businesses which like the farmers are going to find it difficult if not impossible in many cases to pass them down the generations.
“Added to that there are realistic fears that this will accelerate the haemorrhage of staff from social care to the NHS.
He added: “One way or another, we need to have prompt reassurances that the sector will be reimbursed for these extra costs.
“The social care sector is essentially a support service for the NHS and should be given the same exemption from having to pay the extra NI employers’ contribution while the increased costs of the Real Living Wage should be funded by the extra £1.7 billion coming to Wales from the chancellor’s Budget.
“Basically, if you don’t fix social care, you will never fix the NHS, it’s as simple as that.
Can the Welsh government step in to mitigate these costs and if they do, what services will lose out so they can pay for it.
Tuesday, November 12, 2024
Business betrayal and falling living standards
The paper says that Barclays Bank has warned that the increase will hit workers’ living standards, with economists at the bank claiming that the policy will cause real incomes to take a hit, as companies pass on the cost of the levy through lower pay rises and higher prices. This, they say, will leave people feeling poorer as prices rise faster than wages:
Despite a manifesto pledge not to increase taxes for working people – including NICs, income tax and VAT – the chancellor increased employers’ NICs from 13.8 per cent to 15 per cent at the Budget. She also reduced the threshold at which employers start paying the tax, slashing it from £9,100 per year to £5,000.
In a note to clients seen by The Daily Telegraph, economists at the bank said: “We expect the additional costs implied by changes to employer NICs to lead to lower real incomes, through a combination of higher inflation and lower wages.”
Meanwhile, the prime minister has been urged to take “decisive action” to restore business confidence following the decision to increase employer NICs – something business groups have described as a “betrayal”.
The chancellor argued that the policy, which is expected to raise more than £25bn for the Treasury, does not breach Labour’s manifesto commitment because it does not show up on employees’ payslips.
However, businesses have urged the government to change course, warning that they will be forced to “tighten their belts” as a result of the policy and claiming that some are facing a sevenfold rise in their bills as a result.
John Longworth, chair of the Independent Business Network, described the Budget as “anti-growth”, while Dr Roger Barker, director of policy at the Institute of Directors, said the increase in employer NICs takes “no account of whether a business is profitable or not”.
It comes after hospitality bosses wrote a letter to the chancellor warning that the changes are “regressive in their impact on lower earners”.
Mr Longworth told The Independent that Sir Keir Starmer has “betrayed himself and the nation with his first Budget”.
“He and the chancellor persistently stated (correctly) that wealth creation and growth are the No 1 priorities on which all else depends. The Budget and other policies are anti-growth and will therefore fail,” he said.
He warned that the NICs increase will “either cause job losses, wage depression, or lead to underinvestment as a consequence of profit loss”.
Alex Veitch, director of policy at the British Chambers of Commerce, said the combined impact of the NIC increase and the rise in the national living wage means that some firms are looking at a sevenfold increase in their bills.
There is no doubt that Reeves needed to raise taxes to invest in public services, but the choice of employers' national insurance contributions could prove to be disastrous electorally and economically.
An alternative put forward by Dale Vince, the green energy tycoon who has previously donated £5m to Labour, is a 2 per cent wealth tax. He says that this tax would “barely touch the edges for the very wealthy” and would raise “£24bn for our NHS, for child poverty, to save our planet”.
Over to you Labour.
Over to you Labour.
Monday, November 11, 2024
Why is Labour afraid of the EU?
The paper quotes MEP and former Italian government minister Sandro Gozi, who has been recently elected as the new chair of the 70-strong UK-EU parliamentary partnership assembly (PPA), together with the chair of the Labour Movement for Europe, Stella Creasy MP, who say that failure to reconstitute the PPA since the July general election is an issue that “urgently” needs to be addressed:
They write that since Labour took office, the body, set up in 2021 to scrutinise the workings of the post-Brexit Trade and Co-operation Agreement and build closer working links, has been unable to function because the UK has not taken any steps to establish which 30 Westminster parliamentarians will form the country’s delegation. A parliamentary source, while critical of the government’s failure to appoint new MPs, suggested one reason for the delay was a request from the Conservatives to wait until the conclusion of their leadership election.
Calls for the UK to work more closely with the EU on everything from foreign policy to defence and trade – as well as immigration – have been growing since Trump’s stunning re-election success.
The president-elect has promised to impose substantial tariffs on all US imports in a move that could seriously damage a UK economy already suffering from having lost access to the EU’s single market as a consequence of Brexit. With Trump also talking of ending US funding for Ukraine in its war with Russia, the UK government finds itself in a position of potentially dangerous isolation from both the US and the EU on issues of economic and security importance.
Against this background, senior diplomats and Labour MPs now want Starmer to accelerate moves to get closer to the EU.
Privately diplomats and Labour politicians are astonished and despairing that many such public appointments including new trade envoys have not been named since the election. One key source said: “Whether it is all the trouble at No 10 I don’t know, but it is pretty astonishing.” Another said: “They have just not wanted to have any focus on what they are doing with Europe. With Trump back though that has to change.”
Peter Ricketts, former UK ambassador to Paris and one of the country’s leading ex-diplomats, who was appointed to the UK-EU PPA on its formation, said that he hoped the Starmer government would speed up the building of closer ties with Brussels.
“I would move away from the rather cautious and incremental approach to improving relations with Europe,” he said. “It is really important that we are getting in close and talking much more regularly to the French, the Germans, the Poles, the Italians.
“I think this is less about changing the treaty, which will inevitably take time, and more about working on foreign policy issues such as Ukraine, and on finding practical solutions on issues such as migration.”
Creasy told the Observer: “Trump’s election shows the risks to the UK of going it alone in an uncertain world. We have to rebuild our relationship with Europe as part of protecting the public from the economic, security and climate shocks heading our way.
“Yet the democratic structures designed to do that aren’t up and running as the Government hasn’t set out what will replace the Parliamentary European Scrutiny committee it abolished or appointed people to the UK EU Parliamentary Assembly. With so much at stake we can’t waste any more time – getting this right has to be a priority before the new president is in post.”
Given the precarious position the UK is in, isolated from Europe and facing Trumpian tariffs, it's essential that we repair relations with the EU and the single market. That Labour seem almost scared to engage with the EU is disturbing and certainly not in the national interest.
Friday, November 08, 2024
More pain for trade in post-Brexit farce
The paper says that the introduction of the Single Trade Window (STW), which is designed to reduce friction for traders moving goods in and out of Britain, had already been delayed from late October to January next year, but will now be halted until at least 2026:
The government hoped the STW would simplify border processes after Brexit by creating a single digital platform in which importers and exporters could upload all documentation linked to goods before they are transported.
Companies currently need to upload and submit documents to a number of different departments and agencies before importing and exporting goods, a system which has been criticised for duplication and for being time consuming.
However, the STW has been beset with problems, with the National Audit Office (NAO) warning in May that the launch faced “several major challenges” and the government’s timescales were “overly optimistic”.
The government said on Wednesday that the scheme would be put on pause for the remainder of this financial year, and throughout the next financial year. In a statement to parliament on Tuesday, James Murray, the exchequer secretary to the Treasury, said: “In the context of financial challenges, the government … [is] pausing delivery of the UK single trade window in 2025-26.”
He said it would now consider the role of the STW and provide an update on its future at the spending review in late spring.
The decision marks the latest government delay in implementing elements of the post-Brexit border plans since it was elected in July.
In September, the government pushed back checks on fruit and vegetables coming into the country, to allow more time to study the potential impact.
Last month, the government also announced that it would be pushing back the introduction of safety and security declaration forms on all imports by three months, that were initially meant to come into force on 31 October.
The STW rollout was also delayed until January at that point, but will now be halted until at least April 2026.
The Labour government has promised closer alignment with the EU over trade, including a veterinary agreement which could end new border checks and health certificates for imported meat and dairy goods.
The NAO cast doubt over the government aim of launching the first phase of the £349m scheme by the end of 2024, saying its development was “several months behind its timetable” and that it had “underestimated the complexity of what was required”.
It also said that a 12-month delay in launching the STW could reduce the benefits realised by £866m over 10 years.
So much for Brexit reducing red tape. It has actually increased it where it matters the most, in our trade transactions.
Thursday, November 07, 2024
Calls to rejoin single market to protect UK from Trump's trade war
The paper says that pro-EU campaigners have warned that Britain must urgently rebuild ties with Europe now Donald Trump has been elected:
The former president has threatened to impose tariffs on all imports to America if he returns to the White House, which would cripple the UK and global economy. The US is Britain’s single biggest trade partner by far, above Germany, the Netherlands, France and China.
And Mr Trump has threatened a blanket 10 per cent tariff on all imports, with the levy rising as high as 60 per cent for goods from China. He has said “tariff is my favourite word”, but critics have warned the fallout of his protectionism would be higher prices for consumers in the US and globally.
And, amid fears a solitary UK would face a heightened impact, campaigners called for Sir Keir Starmer to urgently rebuild trade ties with the EU to insulate the country from the trade war that would follow Mr Trump’s re-election.
Former Liberal Democrat minister Sir Nick Harvey said Britain must “make a clear choice to be part of a strong Europe”, both in terms of strength on defence and security and trade and the economy.
Sir Nick, chief executive of the European Movement UK, told The Independent a Trump win could add to the urgent need for Britain to build stronger ties with Europe - but stressed that Europe can no longer reply on protection from the US no matter who wins.
He added: “The time for posturing on the sidelines is over. Sensible conversations are more crucial than ever before, about the damage of leaving the European Union, and what shape our future relationship should take.”
And SNP MP Stephen Gethins told The Independent that post-Brexit Britain is “more isolated than at any other time in the post war period”.
That leaves us more vulnerable in terms of hard security as well as to the impact of a trade war,” he added. Mr Gethins said: “The best means of protecting ourselves and making us more secure is to rejoin the EU, and at least the Single Market. At a time when other European democracies are enhancing security cooperation and deepening trade links, it is the best means of protecting ourselves in a more dangerous world with an increasingly isolationist US that will remain a reality regardless of tonight’s result.”
At present the threat remains one for the future, but as Trump puts his agenda into effect, calls for a rapprochement with the EU may grow more urgent.
