IFS report highlighting £52bn stealth tax rise shows Tories have ‘crashed our economy’, says Labour – UK politics live | Politics
IFS report highlighting £52bn stealth tax rise shows Tories have ‘crashed our economy’, says Labour
Good morning. With Israel poised to invade Gaza, after Hamas committed the biggest slaughter of Jewish people in a single day since the Holocaust, and 2 million people in Gaza facing a humanitarian catastrophe, the news is rightly focused on the Middle East, and other political stories getting much less attention than they otherwise would. From the point of view of No 10, that is probably a blessing. The announcement yesterday about short jail sentences mostly being abandoned, and some prisoners being let out early, hardly got a mention on the news bulletins this morning, which for Downing Street must be a positive result. As the Daily Mail’s splash shows, the Ministry of Justice’s attempt to spin this as hardline “Texas” justice has, understandably, failed
There is another good example this morning. A report from the Institute for Fiscal Studies on the state of the public finances, ahead of the autumn statement, is getting some coverage, but not as much as it would if there wasn’t a war on. The Treasury will be pleased, because its findings are unremittingly grim. Here is the full report, and here is Richard Partington’s write-up.
The Conservatives have fought every election at least since the 1980s as the party of low taxation. But, as the IFS report suggests, that is no longer plausible. It says that Rishi Sunak’s decision to freeze the income tax personal allowance at its 2021-22 level for four years in his March 2021 budget, and Jeremy Hunt’s decision last year to make that a six-year freeze, not a four-year freeze, is now set to raise £52bn by 2027-28 – the same as a 6p rise in basic rate and higher rate income tax. The IFS says:
If we instead calculate revenue based on the latest inflation forecasts from the Bank of England (August 2023) and assuming that beyond 2026Q3 inflation remains at 2%, it looks like the freeze to both income tax and NICs thresholds is now on course to raise £52bn in 2027–28 (or £43bn if subtracting the cost of the increase in the point at which employees and the self-employed pay NICs)
This is a huge tax rise. To give a comparison, the biggest single tax-raising measure in recent history was the June 2010 budget decision to increase the main rate of VAT from 17½% to 20%, which is estimated to raise £21bn in 2027–28. Or, to put it another way, other ways to raise roughly £52 bn of revenue include increasing both the basic and higher rate of income tax by 6p, or increasing the main rate of VAT from 20% to 26%.
Despite this colossal rise in the tax take (a consequence of what is known as “fiscal drag”), the IFS also says the government cannot afford to cut taxes in the autumn statement.
Labour says this shows the Tories have crashed the economy. Darren Jones, the shadow chief secretary to the Treasury, said:
After 13 years of chaos and instability, the Conservatives have crashed our economy and left working people worse off.
Successive failures by Conservatives ministers have left us with low growth, high tax and national debt at the highest level in generations. Britain cannot afford another five more years of the Conservatives.
And Sarah Olney, the Lib Dem Treasury spokesperson, said:
This research lays bare the sheer scale of economic vandalism by the Conservative party.
Ministers have condemned the UK to sluggish growth, high inflation and soaring interest rates. It is hard-working families who are left to pick up the pieces, shouldering a huge burden of unfair tax rises and seeing our public services on their knees.
Here is the agenda for the day.
Morning: Rishi Sunak chairs cabinet.
11.30am: Downing Street holds a lobby briefing.
11.30am: Steve Barclay, the health secretary, takes questions in the Commons.
2pm: Prof Neil Ferguson, the epidemiologist whose modelling is credited with having had a decisive impact on Boris Johnson’s decision to order a lockdown in March 2020, gives evidence to the Covid inquiry.
3.15pm: Humza Yousaf, Scotland’s first minister, gives his keynote speech to the SNP conference in Aberdeen.
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Key events
Academics challenge Starmer to accept Israel’s seige of Gaza is against international law
Haroon Siddique
Labour has been urged to clarify its position on collective punishment in the context of Israel’s response to the 7 October Hamas massacre of Israeli citizens, in a letter to Keir Starmer signed by 39 academics.
The signatories, including experts in international law, international humanitarian law, international criminal law and related disciplines say that comments by Starmer, Emily Thornberry and David Lammy have provided tacit approval of the war crime of collective punishment.
Starmer attracted criticism from the Labour Muslim Network and the UN special rapporteur on the occupied Palestinian authorities, among others, when, asked in an interview with LBC about Israel cutting off water and electricity, he said “Israel does have that right” while adding that “obviously everything should be done within international law”. Several Muslim Labour councillors have resigned in response to Starmer’s comments.
On Sunday, the Labour leader issued a statement calling on on “all parties to act in line with international law, including allowing humanitarian access of food, water, electricity and medicines to Gaza”. But the letter says the latter statement “does nothing to rescind your tacit approval of Israel’s collective punishment of the population of Gaza”.
It states:
The right to self-defence is not unqualified, it is bound by longstanding laws that form one of the pillars of a rules-based international order. International humanitarian law, including the fourth Geneva Convention and additional protocols, prohibits collective punishment in all circumstances. The imposition of collective punishment can be considered a war crime under customary international law. The cutting off of food, water and electricity to the population of Gaza is a clear case of collective punishment.
Indiscriminate bombing of populated areas, the use of white phosphorus, as documented by Human Rights Watch on 12 October, and the forced transfer of a population are incompatible with international humanitarian law. The atrocities committed by Hamas on 7 October and its slaughter of Israeli citizens do not abrogate international humanitarian law; on the contrary, these laws were designed for precisely these circumstances.
We request that you immediately issue a public and detailed clarification of Labour’s legal position on collective punishment and on the forcible transfer of civilians. We request that you confirm that you and your party oppose the commission of war crimes, wherever and whenever they may occur.
There is a copy of the letter here. Michelle Farrell, a professor of international law at Liverpool University and one of the signatories, has posted it on X.
Yesterday the International Centre of Justice for Palestinians (ICJP) issued Starmer, Thornberry and Lammy with notices of intention to prosecute “for their role in aiding and abetting Israel’s perpetration of war crimes”.
🚨UPDATE🚨
ICJP has now issued the Labour Leadership with a notice of intention to prosecute any UK politician for their complicity in war crimes in Gaza.
The announcement comes after Saturday’s notice to @RishiSunak of the UK government’s complicity in Israeli war crimes. pic.twitter.com/UZgbMoM6za
— ICJP (@ICJPalestine) October 16, 2023
Neil Ferguson says he was always uncomfortable with the label “reasonable worst case scenario” for what might happen if the virus were allowed to spread. He says he did not like the term because it made that outcome sound unlikely, when in his view is was the likely outcome if nothing were to happen.
Back at the Covid inquiry, Neil Ferguson was asked if any of his scientist colleagues thought in January or February 2020 that a Wuhan-style lockdown was worth considering for the UK. Ferguson said a “minority” of them thought that at that point.
In the Commons MPs are debating a Lords amendment to the levelling up and regeneration bill. Opening for the government, Rachel Maclean, a housing minister, said the government would not accept an amendment made by peers aimed at placing extra duties on planners to tackle climate change. She said:
The government agrees that the planning system must support our efforts in meeting our legal net zero commitments by 2050 and to tackle the risk of climate change. We have committed to updating the national planning policy framework (NPPF) to make sure it contributes to climate change mitigation and adaptation as fully as possible.
What is crucial, however, is that we address climate change in a way which is effective without being unnecessarily disruptive or giving rise to excess litigation for those seeking to apply the policies once they are made. That is why we can’t support amendment 45.
Asked when the government would update the NPPF, Maclean said the government would bring forward an update when the bill became law.
Hugo Keith presents Neil Ferguson with another of his emails, and suggests it shows he was engaging in the policy debate.
Ferguson says he was pointing out that the effectiveness of measures depended on other factors.
Q: Was there a general acceptance at the start of February that stopping the virus would be impossible?
Ferguson says he and colleagues thought stopping the virus getting into the UK would be extremely difficult.
At the hearing, Hugo Keith KC is now presenting Prof Neil Ferguson with an email he wrote on 29 January 2020 which discusses various interventions. He asks why more stringent measures were not considered.
Ferguson says he wrote about school closures because that was an intervention that had been used in the past.
Q: But where is the debate on whole-society measures?
Ferguson says he was addressing the questions he had been asked to consider.
Prof Neil Ferguson says the UK implemented very limited border controls. So it was only going to stop a small fraction of people entering the country, he says.
Q: When did you realise containment would not stop the virus entering the UK, or slow its spread?
Almost as soon as he heard what the measures were, Ferguson says.
He says the community spread of Covid probably started in late January 2020.
He says there was a point in February when it was reported that the UK had 20 cases of Covid, and they were all travellers. But at that point the only people being tested were travellers, he says.
Hugo Keith KC is questioning Neil Ferguson.
He asks if there had been modelling for the impact of “non-pharmaceutical measures” (lockdown-type measures, like working from home) during a pandemic before Covid struck.
Ferguson says there had been some modelling of the impact of these measures. But none of the modelling anticipated them being used for as long as they were.
Q: At the start of February 2020, were you and other experts sceptical about whether containment would work as a strategy?
Ferguson says containment did not work globally.
But he says he was more sceptical than others about whether containment would work in China. He changed his mind when he saw the data from what was happening on the ground, he says.
Prof Neil Ferguson, the Imperial College epidemiologist, is giving evidence to the Covid inquiry, which is currently investigating government decision-making at the start of the pandemic.
Ferguson was one of the most prominent of the many Sage (Scientific Advisory Group for Emergencies) scientists who were frequently in the news during the pandemic, and he was one of the most influential. He was in charge of a paper produced in March 2020, which is credited with persuading Boris Johnson to order the lockdown.
There is a live feed on the inquiry’s website.
Ferguson was due to start at 2pm, but the morning session wrapped up earlier, and he started taking questions before lunch.
Equality and Human Rights Commission urges government to keep its promise to ban conversion practices
The Equality and Human Rights Commission has written to the government asking it to honour its promise to legislate to ban conversion practices.
Theresa May first promised a ban when she was PM five years ago, and the Conservative party promised one again in its 2019 manifesto. Earlier this year, Penny Mordaunt, the leader of the Commons, said draft legislation would be ready before the end of this parliamentary session
But it has been reported that ministers have now decided not to go ahead with a ban, and to publish guidance instead.
Today the EHRC has published a letter from its chair, Lady Falkner, to Kemi Badenoch, the minister for women and equalities, in which she says:
The commission’s position remains that legislation to ban harmful conversion practices is needed, and that thorough and detailed scrutiny remains imperative to ensure that any ban is fully effective in protecting people with the protected characteristics of sexual orientation and gender reassignment from harm while avoiding any unintended consequences. As such I hope to see this legislation in the forthcoming king’s speech.
No 10 says ‘right group’ of people to attend PM’s AI safety summit, as it dodges questions about Olaf Scholz staying away
At the No 10 lobby briefing the PM’s spokesperson would not confirm or deny a report saying Olaf Scholz, the German chancellor, is likely to refuse an invitation to attend the global summit on artificial intelligence safety that Rishi Sunak is hosting in the UK in November.
Asked about the report, the spokesperson said:
We are confident that the summit will bring together the right group of individuals to discuss this important issue. But I’m not going to get into speculation, it will be for other countries to set out their attendance.
At cabinet this morning ministers received an update on the summit, including a briefing from Ian Hogarth, the chair of the government’s frontier AI taskforce, who is overseeing it.
In its cabinet readout, No 10 said:
The prime minister made clear that it is only by managing the risks around AI that we can reap its benefits as a powerful tool for good, improving lives, boosting productivity, delivering better public services and growing our economy. This requires international cooperation, which the UK is uniquely placed to lead as the third most advanced country on AI behind only the US and China, and because we are the leading investor in AI safety.
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