London Playbook PM: Hunting for black holes

17 mins read

May 17, 2024 6:17 pm CET

Good afternoon. This is Andrew McDonald.

FRIDAY’S CHEAT SHEET

— Jeremy Hunt attacked Labour for making apparently unfunded spending pledges.

— Labour hit back by … attacking the government for making an apparent unfunded spending pledge. It’s gonna be a long election campaign.

— Plaid Cymru ended its co-operation agreement with Welsh Labour, in a blow for new FM Vaughan Gething.

— David Lammy hinted that a Labour government would keep aid and development within the FCDO.

**A message from bp: bp is working to bring more lower carbon energy to the UK – like designing two hydrogen plants on Teesside. And, we’re keeping oil & gas flowing to help meet today’s energy needs. And, not or – that’s our approach. See how bp is backing Britain.**

TOP OF THE NEWSLIST

LONGEST ELECTION CAMPAIGN EVER: The Tories and Labour spent a sunny(ish) Friday afternoon arguing about who has the bigger black hole.

Going first: Bleary eyed journalists, including POLITICO’s financial services reporter James Fitzgerald, gathered early in a medium-sized room in Westminster to watch as Chancellor Jeremy Hunt gave a quick wave to the silent hacks and sauntered up to the podium for a (party political) speech on the economy. Hunt accused Labour of “playground politics” and “fake news” with its attacks on the state of the economy.

Subtlety is overrated: James writes that you could’ve been forgiven for thinking the chancellor was about to defect as he began his speech in front of red and white signage, entitled “Labour’s Tax rises” (Hunt said he would talk to his team about the rogue capitalized “T.”) But, in fact, he was about to fire a few salvos at the opposition’s policies and tax plans in an attempt to defend his own.

Taxing times: Hunt said “independent” civil servants in the Treasury — more on those top lads and lasses in a moment — had costed 15 of Labour’s policies and, according to the government’s figures, there will be a £38 billion black hole in the opposition’s plans. Needless to say, Hunt argued that hole could be filled only by Labour tax hikes of around £10 billion.

The line for the bulletins: “Taxes will go up with any future Labour government as sure as night follows day,” Hunt said. He added that Starmer’s first step in government — if he makes it, obvs — would be to “help himself to you and your families’ wallets.”

Just one problem: The chancellor was saying all this stuff, and speaking in front of the “Labour’s Tax rises” sign, after, er, raising overall taxation to its highest level in 70 years. Hunt blames this on the pandemic and war in Ukraine.

The key dividing line: Hunt pledged to journalists in the room that “taxes will go down under a Conservative government,” and that Labour doesn’t want to lower taxes in government. He also hinted at a further cut to national insurance in the fall.

But but but: Asked in the Q&A following the speech exactly when and how he could deliver tax cuts, as was promised about 10 minutes earlier, Hunt said he couldn’t “look into a crystal ball” and predict world events five or years down the track.

Unfreeze me: And even though the event was supposed to be about Labour coming for your wallets, almost all the journo questions were about when Hunt would provide more tax relief and unfreeze thresholds — which are dragging millions more into paying tax for the first time, or even more tax, through fiscal drag. Again, the chancellor wouldn’t commit to when or if he would do this. He preferred to focus back onto his black hole dossier of doom on Labour’s spending commitments.

Talking of which: To go alongside Hunt’s speech, the Treasury released documents detailing where they found the £38.5 billion black hole in Labour’s spending promises across the next four years. You can read it in full here if you want to add some sparkle to your Friday evening plans.

But with a huge caveat: While the figures are produced by impartial officials and published on HMT paper, the civil servants produce the figures based on assumptions made by political special advisers. As the IFG’s Gemma Tetlow wrote in February, in a piece arguing that the independent OBR should make these analyses instead, these kinds of opposition costings “are partial at best and can be extremely misleading.” Former mandarin turned government critic Sam Freedman did an X thread on how he thinks they’re BS too.

To be fair: The government pointed out this morning that, when in government all those years ago, Labour had their SpAds and officials work up these kinds of slightly dubious costings too.

SPIN WAR BEGINS: With that in mind, Labour promptly hit back — arguing the government’s costing calculations are based on political assumptions and that the government is trying to distract from its own funding black hole around Hunt’s vague promise to abolish national insurance.

The spokes quote: “This is another desperate attempt by the Tories to deflect from their £46 billion unfunded tax plan that could lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it,” a Labour spokesperson said. “Jeremy Hunt would be better spent getting Rishi Sunak to confirm the date of the election, rather than putting out any more of these dodgy dossiers.” BBC Verify had a go at digging into some of the Tory claims.

The most pointless argument ever: Labour’s core argument is that the government’s figures make so many assumptions that they can’t be relied on. But at the same time, the party reckons Westminster should take very seriously its claim about the Tories’ apparent un-costed £46 billion promise to abolish national insurance — even though that is something that Hunt has said is an ambition for when public finances improve, rather than a current funded pledge. Labour argues this is an unfair comparison.

That argument, set out: “If the Labour Party came out and said we wanted to scrap national insurance, you would rightly expect us to set out how we plan to pay for that and what the trade-offs and consequences are,” Shadow Chief Secretary to the Treasury Darren Jones told journos this afternoon. “That’s all we’re asking the Conservatives to do, and they refuse to do so — so it’s not comparing apples to apples.” The party put out a video this afternoon arguing that the pledge means “your bank account isn’t safe from Rishi Sunak.”

But then on the other hand: Labour hasn’t said how it would pay for its pledge to eventually increase defense spending to 2.5 percent of GDP, which is also only a promise under the Hunt-vibe wording of “as soon as resources allow.” They’re all at it.

Basically: All of this is just filling time, newspaper columns and bolstering the word counts of beleaguered Friday afternoon newsletter writers until the final manifestos drop when the election campaign actually begins.

While everyone wangs on about tax cuts: It’s worth remembering that plenty of polls show that lots of Brits would stomach tax rises, if it meant more spending on public services. See exhibits one, two and then a new Health Foundation poll, conducted by Ipsos, out today which suggests that almost half of Brits (47 percent) want tax rises to maintain the current level of care provided by the NHS. Opinion is generally split on the issue of tax cuts v public services — but there’s no unifying desire across Britain for taxes to go down.

DO THESE CHAPS DECIDE EVERYTHING ANYWAY? This morning’s Westminster Insider by POLITICO’s own Sascha O’Sullivan looks into the question of the whether the Bank of England is actually the secret political player that effectively runs the show on the economy, rather than the folks trading blows today — with an all-star cast including ex-PM Liz Truss, former senior Bank officials and Ed Balls.

DRIVETIME DEBRIEF

MEANWHILE, ON THE GROUND IN THE UK: Britain has the worst homelessness rate in the developed world, according to some new FT charts by John Burn-Murdoch. Bit of a caveat: the U.K.’s big homelessness rate is overwhelmingly made up of people in temporary accommodation, rather than people literally sleeping on the street. But that’s still a huge number of people — 50.5 per 10,000 — stuck and often forgotten about in what can be shoddy homes full of damp, mould and other nasties.

BIG NEWS IN WALES: Plaid Cymru this afternoon ended its cooperation agreement with the Welsh Labour government, blaming First Minister Vaughan Gething’s failure to pay back a £200,000 leadership election donation from a company run by a man twice convicted for environmental offenses … and the sacking of Hannah Blythyn for leaking (which she denies). It’s been a pretty turbulent start to Gething’s tenure at the top of Welsh politics. WalesOnline’s Will Hayward reports Gething called an urgent meeting of Labour MSs as Playbook PM was going to pixel.

On that note: Hayward, a Welsh politics doyen, has an X thread on how all this came about. He says the Welsh Tories are gearing up for a vote of no confidence in Gething.

I’LL BE KEEPING THAT: It looks like Shadow Foreign Secretary David Lammy is dead keen to keep aid and development within the Foreign Office if Labour wins the election, Playbook’s Stefan Boscia writes in. Starmer was previously committed to recreating the Department for International Development, however this is now up in the air.

Don’t tell Lisa: Lammy told an Institute for Government event this morning he was not interested in “change for change’s sake” and that the wars in Gaza and Ukraine showed “diplomacy and development must be aligned.” This would be a massive blow for Shadow Development Minister Lisa Nandy, who has already been demoted twice by Keir Starmer. Unless, of course, he opts to give the former leadership contender a different brief altogether if Labour wins.

Are these serious people? The shadow foreign secretary also reiterated his commitment to working closely with a potential Donald Trump administration in the States, after Lammy’s recent efforts to schmooze the presidential nominee’s allies. Lammy said this is a “profoundly serious moment” which requires “seriousness and that seriousness means that the special relationship between the United Kingdom and our American friends is core.” And who could possibly say the 45th president of the United States isn’t a serious person?

Worth remembering: Not all in Labour are that fond of working with Trump, as London Mayor Sadiq Khan made clear to POLITICO’s Jon Stone this week.

DIPLOMATIC ROW OF THE WEEK: Western allies including the U.K. are disgruntled by France’s decision to invite Russia to the 80th anniversary of the D-Day landings, POLITICO’s Clea Caulcutt and Esther Webber report.

YEAH, HE’S RUNNING: As he mulls a run against whoever Labour picks in his constituency, Jeremy Corbyn’s summary of his week included these telling final sentences: “Talking to people, listening to them and helping them with their problems, whatever they may be. That is what being an MP is all about.”

YER BARRED: Tory peer Kulveer Ranger could be suspended from the Lords for three weeks and banned from all parliaments bars for a year, after the Lords Conduct Committee found the “visibly drunk” peer made “various inappropriate comments” to parliamentary staff. The peer was asked to leave Strangers Bar. Ranger, who worked with Boris Johnson while he was mayor of London, doesn’t dispute the findings of the report, and its recommendations for sanctions will be voted on by peers next month.

MORE DOSH FOR SAMBAS: Rishi Sunak and his wife Akshata Murty’s personal fortune increased by £120 million to £651 million in the latest Sunday Times rich list figures, placing them 245^th overall in the country and £41 million better off than King Charles.

Also doing well as Britain burns: Tony Blair’s son Euan appears on the rich list for the first time, thanks to his stake in educational tech company Multiverse. CityAM’s Charlie Conchie has a bit of detail on Blair junior’s firm.

RWANDA LATEST: Writing for the i, Lizzie Dearden has a read out on further delays incoming on the governments Rwanda plan — and an apparent sense of chaos in the Home Office as detailed by her sources.

NEW SANCTIONS: The government has announced a new package of sanctions to tackle trade between North Korea and Russia — with an aim to crack down on “arms for oil trade” between the two countries, POLITICO financial services reporter Eleanor Myers writes in. This involves Russia trading its oil for much-needed weapons, supplied by North Korea. The sanctions come just a day after the U.S. announced a similar package on Russians involved in trade with North Korea.

THEY CALL HIM THE POSTMAN: Boris Johnson’s weekly Mail column is on … being stuck in an LA driverless car. More as we have it.

PIERCING THE BRUISE: As per this morning’s Playbook, podcast bro George Osborne appeared to have in-the-room details from his old bestie David Cameron’s Mar-a-Lago summit with Donald Trump, which he was loose lippedly discussing on his Political Currency podcast. Outgoing U.K. Ambo to the U.S. Karen Pierce, who was in the room, won’t be too buzzing about that — she told Anne McElvoy’s Power Play podcast that all involved agreed they wouldn’t talk about the “private conversation.” Wonder who spilled the beans to Cameron’s former chancellor?

DUNNE DUNNE DUNNE: Even climate-friendly Tory MPs are skeptical about the government hitting its net zero goals. The government’s 2035 clean power target is an “enormous challenge,” Tory MP and Chair of the Environmental Audit Committee Philip Dunne told Charlie Cooper at POLITICO’s Energy and Climate Summit Thursday. He said that the target is achievable only if “everything goes right — and it rarely does in government.” Write-up here.

AROUND THE WORLD

MIDDLE EAST UPDATE: The U.S. military confirmed the first aid shipment for Palestinian civilians via a temporary pier off Gaza had gone ashore, though the U.N. warned the maritime corridor was not a replacement for land routes — the BBC has the details. The U.K. also delivered aid via the pier, with Prime Minister Rishi Sunak calling for “more land routes open” — Sky has a liveblog.

UKRAINE UPDATE: Russian President Vladimir Putin said his forces weren’t planning to capture the city of Kharkiv in Ukraine’s northeast where troops have been pushing forward — my colleague Pierre Emmanuel Ngendakumana has his words.

IN SLOVAKIA: Slovakia’s Prime Minister Robert Fico has undergone another operation two days after being shot multiple times, and remains in a serious condition — AP News has a writeup.

IN FRANCE: French police shot dead a knife-wielding man who set fire to a synagogue and threatened police in the northern city of Rouen — via Reuters.

IN SERBIA: Donald Trump’s son-in-law Jared Kushner secured a 99-year permit for his investment firm Affinity Partners to develop a luxury compound in Belgrade. Serbia’s Construction and Infrastructure Minister Goran Vesić said the government had chosen “a reputable American company as a partner in this venture” — my colleague Una Hajdari has more.

**A message from bp: We’re investing in today’s energy system and helping to build out tomorrow’s while we do. And, not or – that’s our approach. While today we’re mostly in oil and gas, we increased the proportion of our global annual investment that went into our lower carbon & other transition businesses from around 3% in 2019 to around 23% in 2023. bp.com/AndNotOr.**

TONIGHT’S MEDIA ROUND

LEADING THE NEWS BULLETINS: Channel 5 News (5 p.m.) leads on Ahmed Alid being jailed for life for killing a pensioner in a “terrorist act” … BBC News at Six has a frontline piece from Kharkiv in Ukraine … Channel 4 News (7 p.m.) focuses on the Israel—Hamas war and aid shipments arriving via a temporary pier off Gaza.

Tom Swarbrick at Drive (LBC, until 7 p.m.): Tory PPC and George Osborne’s former Chief of Staff Rupert Harrison (6.05 p.m.).

BBC PM (Radio 4, 5 p.m.): Former Commander of the Joint Forces Command Richard Barrons … Institute for Fiscal Studies Director Paul Johnson.

News Hour (Sky News, 5 p.m.): The Norwegian Refugee Council’s Shaina Low (5.45 p.m.) … Tory MP Anthony Mangnall (6.45 p.m.).

Drive with Cathy Newman (Times Radio, 5 p.m.): Anthony Mangnall … Tory peer James Bethell … Labour peer Helena Kennedy.

Any Questions (Radio 4, 8 p.m.): Education Minister David Johnston … Shadow Health Minister Karin Smyth … Green New Deal Co-Executive Director Fatima Ibrahim … commentator Tim Montgomerie.

TWEETING TOMORROW’S PAPERS TONIGHT: Neil Henderson.

REVIEWING THE PAPERS TONIGHT: Times Radio (10.30 p.m.): Broadcaster Lucy Beresford and academic Ivor Gabor … Sky News (10.30 p.m. and 11.30 p.m.): Mirror columnist Susie Boniface and the Sun’s Deputy Political Editor Ryan Sabey.

YOUR WEEKEND IN POLITICS

HANG WITH THE (SCOTS) LIBS: Lib Dem Leader Ed Davey addresses the Scottish Lib Dem spring conference Saturday.

PREP FOR NEXT WEEK: Politics at Jack and Sam’s — the weekly political lookahead by my boss Jack Blanchard and Sky’s Sam Coates — drops Sunday evening as normal.

Oh, and: Coates will be running the Hackney Half for the Literacy Pirates charity after recording the pod. Donation details here.

WEEKEND MEDIA ROUND

Week in Westminster (Radio 4, 11 a.m. on Saturday): Former Defense Secretary Liam Fox … Labour PPC Douglas Alexander … former Labour adviser Theo Bertram … Lib Dem MP Wendy Chamberlain … Tory MP Nigel Mills … Bishop of Leeds Nick Baines … Guardian columnist Polly Toynbee.

Ayesha Hazarika with Times Radio Drive (Times Radio, 4 p.m. on Saturday): Former U.N. Under Secretary General for Humanitarian Affairs Mark Lowcock (4.35 p.m.) … Ukrainian MP Oleksandr Merezhko (4.45 p.m.).

Trevor Phillips on Sunday (Sky News, 8.30 a.m. on Sunday): Shadow Health Secretary Wes Streeting … crossbench peers John Woodcock and Kishwer Falkner … former BBC Director General Greg Dyke … former Sun Editor David Yelland … the Sunday Times’ Political Editor Caroline Wheeler.

Sunday with Laura Kuenssberg (BBC One, 9 a.m. on Sunday): Defense Secretary Grant Shapps … Wes Streeting.

The Camilla Tominey Show (GB News, 9.30 a.m. on Sunday): Grant Shapps …Wes Streeting … Tory MP Lia Nici … former Foreign Secretary Malcolm Rifkind.

Lewis Goodall (LBC, 10 a.m. on Sunday): Wes Streeting … Communication Workers Union General Secretary Dave Ward … German Ambassador to the U.K. Miguel Berger.

Sunday Morning with Kate McCann and Adam Boulton (Times Radio, 10 a.m. on Sunday): Grant Shapps … Wes Streeting … former Australian Foreign Minister Alexander Downer … former NATO Secretary General George Robertson.

Henry Bonsu with Times Radio Drive (Times Radio, 4 p.m. on Sunday): Deputy Tory Chair Rachel Maclean … Labour MP Clive Efford … Green Party Deputy Leader Zack Polanski … Tortoise’s Politics Editor Cat Neilan.

Westminster Hour (Radio 4, 10 p.m. on Sunday): Former Business Secretary Jacob Rees-Mogg … Labour peer Shami Chakrabarti … Queen Mary University of London academic Tim Bale … Caroline Wheeler.

ANY OTHER BUSINESS

WHAT I’VE BEEN READING: British Future director Sunder Katwala’s thoughtful Twitter thread about new phrase “the global majority.”

ON THIS DAY IN POLITICS: Then-PM Anthony Eden hosted a ground-breaking half-hour television debate program with newspaper editors on this day in 1955, marking one of the first broadcasts of its kind.

Oh, and it’s not politics but: One of the happiest days of Playbook PM’s life was on this day 10 years ago. Happy May 17 to all who celebrate.

WRITING SUNDAY CRUNCH: Matt Honeycombe-Foster.

WRITING PLAYBOOK MONDAY MORNING: Dan Bloom.

THANKS TO: My editor Rosa Prince, reporter Noah Keate, and the POLITICO production team for making it look nice.