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By ANNABELLE DICKSON
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Good Thursday morning. This is Annabelle Dickson.
DRIVING THE DAY
RISHI’S RICHES: Rishi Sunak faces a barrage of questions about whether he really is a low-tax low-spend Conservative chancellor this morning as the dust settles on a budget which saw him use a projected economic growth windfall for a Johnsonian spending spree, and to scale back a controversial cut to the government’s flagship welfare policy. Sunak, who has presided over the biggest hike in taxes since the 1950s, will tour broadcast studios this morning as journalists and policy wonks dig deep into the small print of the Treasury’s red budget book.
High on the news agenda: Sunak also will have to field questions about Anglo-French relations after the French government issued an extraordinary statement last night saying it would impose extra controls on boats and trucks coming from the U.K., and overnight announced it had detained a British trawler that had been fishing off its coast without a license and issued a warning to another. More on this further down the email, and here from my POLITICO colleague Rym Momtaz.
Sunak’s broadcast round: Sky Sunrise (7.05 a.m.) … BBC Breakfast (7.32 a.m.) … ITV GMB (7.47 a.m.) … BBC Today (8.10 a.m.) … BBC Good Morning Scotland (8.22 a.m.) … LBC (8.35 a.m.).
Beyond the spin: The Resolution Foundation’s budget post-mortem is at 8.45 a.m., followed by the often newsworthy Institute for Fiscal Studies press call at 10.15 a.m.
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Public opinion: Getting lots of the bad news, including the new health and social care levy, out of the way early appears to have paid off for the PM and chancellor. More than half (53 percent) of the U.K. adults surveyed by Savanta ComRes for a snap poll last night approve of the budget, including half of 2019 Labour voters (51 percent). Quite some feat. Only 15 percent disapproved. YouGov’s snap poll also suggested the public is broadly positive about the budget, with 30 percent supporting and 15 percent opposing the measures. The YouGov poll is a useful reminder that not everybody in the country has budget day blocked out in their diary, and spends it glued to the telly and on social media. More than half of those quizzed by YouGov had not yet heard enough to make a judgment.
Focus group: In another barometer of public opinion More in Common’s Luke Tryl has a fascinating write-up of a focus group held yesterday in the South Yorkshire constituency of Rother Valley in the Times this morning. It was with voters who swung strongly behind the Conservatives from Labour in 2019. “As the speech went on, and ever-larger numbers started to flash up on the TV, the questions quickly turned to where all this extra money was going to come from,” Tryl writes.
What the papers says: It is a question some of the papers were also asking this morning. The Times editorial warns the extent of the tax burden and spending Sunak is laying on the electorate is “immense,” a view echoed by the Sun, which describes the budget as an “epidemic of government spending.”
Digs: There are some not-so-subtle warnings on the front pages of some of the right-leaning publications about Sunak’s big spend pivot. While the Telegraph news story plays it fairly straight, an Allister Heath column warning the Tories “nightmare conversion to Brownism can only end in catastrophe” gets a big plug on the front of the PM’s favorite broadsheet. The Mail front page warns Sunak to keep his tax cut vow.
Not impressed: The Indy goes big on the climate backlash against the chancellor after he decided to cut domestic air passenger duty days before the COP climate summit kicks off in Glasgow. The Mirror is unsurprisingly not impressed with a budget that it says delivers Champagne for the rich and real pain for the poor.
That said: Getting the chancellor and the PM into a pub together yesterday was a shrewd move. Spinners will be pleased with the Metro’s front page toasting the budget, as it majors on the beer duty cut. The pictures make it onto the front of a few other papers too.
Triumph of Johnsonism: Inevitably much of today’s commentary focuses on Johnson’s perceived triumph in getting big spending commitments out of his No. 11 neighbor. Sunak’s line toward the end of his budget speech that “government should have limits,” adding that “if it sounds controversial, that means it needed saying,” did little to dispel this narrative.
Pet projects: But as POLITICO’s Esther Webber points out in this excellent analysis piece, it may actually suit Sunak for the government’s largesse to be associated with his boss. A former colleague of both men tells her: “I would say Rishi and his team are better at strategy, so whatever is in the budget both men wanted.” The tug of war is not just between No. 10 and No. 11, but between the chancellor and the whole parliamentary party, who have all been making their case for investment in pet projects over the past few months.
Political winner: And so far it appears to be politically astute. “Under Johnson, Thatcherism has been dumped and replaced by the ruthless pragmatism that is the real reason the Conservative party is the most successful political party in history,” the i’s Paul Waugh writes in his always excellent analysis.
Pivot back: Sunak did try to assure Tory backbench MPs at a 1922 committee meeting that he was not abandoning his Thatcherite credentials. He would use “every marginal pound” going forward to lower taxes rather than spending more, he told MPs (h/t Katy Balls).
Gordon or Gideon? The high-spend, high-tax nature of the budget saw many (including the IFS’ Paul Johnson) draw comparisons between Sunak’s budget and those of the former Labour Chancellor Gordon Brown. This included one Conservative member who asked Sunak during a post-budget livestream interview with Tory Chairman Oliver Dowden if he was “a Gideon or a Gordon” — a reference to the more austere former Tory Chancellor George Osborne. He didn’t really answer. You can watch the full Dowden-Sunak love-in, which included hard-hitting questions like how Sunak’s new puppy was settling in to No. 11, here. A Tory source said there were plans to get more “big hitters” in to CCHQ as part of Dowden’s campaign shake-up.
Talking of Brown: On last night’s Newsnight Political Editor Nick Watt said there were a growing number of backbenchers and ministers who were unhappy with Sunak. One minister, claiming to speak for many, told Watt they were “getting a bit fed up with Rishi Sunak showing off all the time” and “all those tweets with his personal signature … We’ve all been watching the Blair/Brown documentary and that should serve as a warning of what can happen when a chancellor thinks it’s all about him,” the minister told Watt.
What Remain Twitter is talking about: The OBR’s assessment that Brexit will have a bigger impact on U.K. GDP than the pandemic in the long term did not go unnoticed in the post-match analysis. The budget watchdog said “both import and export intensity had been reduced by Brexit.” They also noted that full post-Brexit checks are still to be imposed, and the ultimate effects of the 2016 referendum decision will take longer to be felt. POLITICO’s Emilio Casalicchio has more for trade pros here. The Tony Blair Institute claimed in its analysis that “without the Brexit shock most of the past year’s £40 billion tax raid would have been unnecessary.” A line the Labour Party with its past Brexit woes may be reluctant to claim.
Ready for rates: Asked about next Thursday’s hotly anticipated Bank of England interest rate decision, Sunak told ITV’s Robert Peston last night he had been mindful of inflationary pressures when drawing up his budget because he wanted to “protect us against future rises in interest rates, make sure we have a bit of a buffer to cope with those.” Beyond the big spending headlines, the other big story was the economic outlook. Inflation is expected to reach 4.4 percent next year, the Office for Budget Responsibility warned.
Also worth knowing: Most news organizations have a comprehensive rundown of the measures which most Playbook readers will be familiar with now, but there are a few nuggets spotted by esteemed colleagues worth highlighting …
Civil service cull: Civil Service World spotted a potentially big cut in the non-frontline civil service headcount.
More taxes: The Mail and Telegraph highlight a forecast suggesting council tax bill hikes will equate to £12 billion over seven years by 2026/27 — mainly driven by local authorities trying to plug the big holes in their social care budgets. A fact which will have not gone unnoticed by many of the Tory base who are in local government.
The Claret Tax: Some in SW1 are not impressed with aspects of the alcohol tax overhaul which will see the duty on most red wines increase. “People who say this is not a proper Tory government may have a point. Its MPs cheered a rise in duty on full-bottomed clarets but a cut in the price of rosé and Asti spumante. Pink wine?” Quentin Letts thundered in today’s Times sketch. The Treasury compiled a useful and accessible factsheet showing how the overhaul, based on a system of “the stronger the drink, the higher the rate,” might impact your favorite tipple.
Universal questions: While Sunak’s budget “rabbit” — cutting the taper rate on Universal Credit, the government’s flagship welfare policy, from 63 to 55 percent — was smart politics, there are plenty of questions today about exactly how many of the poorest families it will help. The Mirror’s Dan Bloom, who has done sterling work in keeping welfare issues in the news in recent months, has a really comprehensive look at what it all means. A hat tip to ITV’s Anushka Asthana, who got wind of the change a while ago.
High earners: The Speccie’s James Forsyth notes: “The 8p cut in the taper rate is welcome. But it is worth remembering that even the new level is far higher than the 47 percent rate faced by those earning over £150,000.”
Inheritance tax by default: A few people have picked up on a projected inheritance tax boost to Treasury coffers as a result of higher-than-expected inflation.
Another U-turn: The HuffPost has a rundown of who was and wasn’t wearing a mask on the Tory frontbench during yesterday’s budget speech. Spoiler: Leader of the House of Commons Jacob Rees-Mogg was keeping the “convivial fraternal spirit” alive by going unmasked.
A star is born? Shadow Chancellor Rachel Reeves, who filled in at the last minute for Keir Starmer after he tested positive for COVID-19, got some plaudits for her last-minute response. She told Peston she only had 45 minutes to prepare before heading to the chamber. She delivered one of the zingers of the session, concluding it was “bankers on short-haul flights sipping Champagne” who would be cheering the budget.
**For two exclusive weeks, to mark COP26 in Glasgow, POLITICO Pro’s Energy and Climate newsletter will be free for all, offering access to the hottest political takes and insight from the most important international gathering of the year. Sign up in one click to start receiving it from next week.**
ANGLO-FRENCH FALLOUT
RETALIATION NATIONS: France overnight announced it had detained a British trawler that had been fishing off its coast without a license, and issued a warning to another. The move came as the U.K. government warned last night that it would retaliate if France introduces extra controls on boats and trucks coming from the U.K. next Tuesday. And the French threat was its own retaliation for what it says is Britain’s failure to honor its commitments on fishing rights. The affected ports should be announced at the beginning of next week, a French diplomatic official told my POLITICO colleague Rym Momtaz. But they said the new controls shouldn’t apply to the Eurostar rail link between the two countries.
Second wave: In an extraordinary statement yesterday evening, Paris also threatened to disrupt the U.K.’s energy supply if Britain fails to address French concerns over fishing licenses. The French government said “a second series” of measures is “being prepared.”
Retaliating against the retaliation: The U.K. government was quick out of the blocks in responding. “France’s threats are disappointing and disproportionate, and not what we would expect from a close ally and partner,” a U.K. government spokesman said. “The measures being threatened do not appear to be compatible with the Trade and Cooperation Agreement (TCA) and wider international law, and, if carried through, will be met with an appropriate and calibrated response.”
Frosty response: Brexit Minister David Frost weighed in too, tweeting that it was “very disappointing” that France has felt it necessary to make threats. In what does not appear to be a great sign for diplomatic relations, Frost said there had been “no formal communication” from the French government on the matter, and they would be “seeking urgent clarification” about the plans.
What timing: The big question is how much support France will get from the rest of the European Union for its measures. It is all particularly awkward timing for the EU given they have officials in London this week holding sensitive talks about a way forward in Northern Ireland.
Stick with us: France said it wanted the European Commission to hold a meeting of the EU-U.K. Partnership Council “as soon as possible” and added: “No other European cooperation issue with the United Kingdom will be able to move forward without restoring trust and fully applying the signed agreements.”
TODAY IN WESTMINSTER
HOUSE OF COMMONS: Sits from 9.30 a.m. with DEFRA questions followed by the weekly business statement from Commons Leader Jacob Rees-Mogg … The main business will be continuation of the budget debate.
COMMITTEE CORRIDOR: Welsh Secretary Simon Hart and junior Welsh Minister David TC Davies will be quizzed on the work of the U.K. government in Wales by — guess who — the Welsh affairs committee (10 a.m.) … The public accounts committee will question senior officials from the DWP on underpayments made in the state pension (10 a.m.) … and the joint committee on the draft Online Safety Bill will quiz representatives from Facebook (3 p.m.), YouTube and Google (4.30 p.m.), and Twitter and TikTok (6 p.m.). Full list here.
CONCERNING NEWS: A 52-year-old man has been arrested on suspicion of making threats against Labour’s deputy leader Angela Rayner. The Guardian’s Jessica Elgot reports Rayner — currently away from parliament on bereavement leave — has canceled her constituency surgeries in recent weeks due to concerns for her safety, after an increase in abuse and threats against her since Labour conference.
RED CARD TO THE RED LIST? Ministers are “almost certain” to take the last seven countries off the quarantine red list, the Telegraph says. It is a factor that delegates from all the remaining countries on the list are coming to COP26 next week, the paper reports.
COP OUT: The U.N. climate summit is almost certain to end in failure — just don’t expect world leaders to admit it, write POLITICO’s Karl Mathiesen and Zack Colman in this walk-up.
LAST-DITCH DEAL: But in better news for COP delegates, rail strike action planned for the summit has been called off after the RMT union accepted an improved pay and conditions offer from train operator ScotRail. For Scots, it means the end of eight and a half months of no trains on Sundays, as well as what should be a disruption-free rail service during COP26, which kicks off on Sunday. Thousands of council workers in refuse, maintenance and schools are still planning to strike during the second week of the summit however — while Extinction Rebellion also plans to make itself heard. The BBC has a write-up.
LISTEN UP: There’s been much industry gossip about how many listeners Times Radio has managed to attract since its multi-million-pound launch in June last year. Well, this morning the station’s first-ever figures are published: They had 637,000 listeners a week in Q3 (listening for more than 15 minutes), busting through News UK’s highest expectations of half a million. Their total listening hours are 3,497,000 hours a week, or 5.5 hours per week per listener — pretty high for speech radio. One number that will particularly please bosses is the 142,000 peak audience of the Breakfast show, which surpasses Kay Burley on Sky News at 54,000. Might we see more ministers shift to Times Radio for their morning round?
SCOOP — TRUSS BLOCKAGE: Former International Trade Secretary Liz Truss rejected a proposal to fast-track import bans on products made to low animal welfare standards, my colleague Emilio Casalicchio reports. The Department for Environment Food and Rural Affairs (Defra) suggested a legislative plan that would allow the government to slap bans on new products more easily. But Truss blocked the move, arguing it would reduce British leverage as it negotiates trade deals, according to numerous people with knowledge of the discussions, he hears. More here for POLITICO Trade and Agriculture and Food Pros.
HOUSE OF LORDS: Sits from 11 a.m. with questions on the contribution of migration to society, trade policy and removing dangerous cladding … Followed by debates on the planning system, the Treasury’s Green Book and the impact of the end of furlough, the UC uplift and the rise in fuel prices.
YESTERDAY’S UK COVID STATS: 43,941 new cases, ⬆️ 2,987 on Tuesday. In the last seven days there have been 307,716 positive cases, ⬇️ 12,878 on the previous week … 207 reported deaths within 28 days of a positive test, ⬇️ 56 on Tuesday. In the last seven days 1,010 deaths have been reported, ⬆️ 56 on the previous week. As of the latest data 8,801 COVID patients are in hospital.
VAX STATS: A total 49,794,120 people or 86.6 percent of the population aged 12+ have received a first dose, ⬆️ 41,083. A total 45,605,922 people or 79.3 percent of the population aged 12+ have received a second dose, ⬆️ 23,031 … A total 6,706,468 people or 11.7 percent of the population aged 12+ have received a booster/third dose, ⬆️ 264,468.
NOW READ THIS: The fourth wave of the coronavirus pandemic is breaking over Europe, with few countries spared. My POLITICO colleagues Cornelius Hirsch and Ashleigh Furlong have the numbers.
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MEDIA ROUND
Chancellor Rishi Sunak broadcast round: Sky Sunrise (7.05 a.m.) … BBC Breakfast (7.32 a.m.) … ITV GMB (7.47 a.m.) … BBC Today (8.10 a.m.) … BBC Good Morning Scotland (8.22 a.m.) … LBC (8.35 a.m.).
Shadow Chancellor Rachel Reeves broadcast round: ITV GMB (6.50 a.m.)… BBC Breakfast (7.10 a.m.) … LBC (7.40 a.m.) … Today program (7.50 a.m.) … Sky News (8.05 a.m.) … Times Radio (8.30 a.m.).
Also on the Today program: Chief Scientific Adviser Patrick Vallance (7.30 a.m.).
Also on Good Morning Britain: Journalists Ayesha Hazarika and Quentin Letts (6.30 a.m.) … Comedian David Baddiel (7.35 a.m.).
Also on BBC Breakfast: The Resolution Foundation’s Torsten Bell (6.30 a.m.) … Chief Scientific Adviser Patrick Vallance (8.10 a.m.).
Also on Sky News breakfast: Founder of the Big Issue John Bird (7.30 a.m.) … Night Time Industries Association CEO Michael Kill (7.45 a.m.) … Defense committee Chairman Tobias Ellwood (8.20 a.m.) … Chief Scientific Adviser Patrick Vallance (8.30 a.m.).
Also on Nick Ferrari at Breakfast (LBC): CBI President Karan Bilimoria (7.05 a.m.) … Michael Barber, former head of the PM’s delivery unit under Tony Blair (7.10 a.m.) … Former Greens leader Natalie Bennett (8.05 a.m.).
Also on Times Radio breakfast: Member of the JCVI Adam Finn (8.15 a.m.) … Former United Nations climate chief Christiana Figueres (9.05 a.m.).
Julia Hartley-Brewer breakfast show (talkRADIO): Tory MP John Redwood (7.05 a.m.) … Work and pensions committee Chairman Stephen Timms (7.10 a.m.) … IFS Director Paul Johnson (7.33 a.m.) … Shadow Treasury Minister James Murray (7.45 a.m.) … Former Work and Pensions Secretary Iain Duncan Smith (8.05 a.m.) … Treasury Minister Helen Whately (8.50 a.m.) … Former Chancellor Ken Clarke (9.05 a.m.) … Shelter’s Chris Wood (9.40 a.m.).
Question Time (From Stockport, BBC One 10.35 p.m.): Chief Secretary to the Treasury Simon Clarke … Shadow Chief Secretary to the Treasury Bridget Phillipson … NatWest Group Chairman Howard Davies … New Economics Forum boss Miatta Fahnbulleh … Entrepreneur Jenny Campbell.
Reviewing the papers tonight: Sky News (10.30 p.m. and 11.30 p.m.): Columnist Carole Malone and editor of the Courier David Clegg … Times Radio (10.30 p.m.): The Evening Standard’s David Bond and commentator Yasmin Alibhai-Brown.
TODAY’S FRONT PAGES
(Click on the publication’s name to see its front page.)
Daily Express: Cheers! Rishi on a mission to cut taxes.
Daily Mail: The drinks are on us!
Daily Mirror: Champagne for rich … real pain for poor.
Daily Star: The Hangover Part IV.
Financial Times: Sunak backs Johnson on spending.
HuffPost UK: Sunak’s ‘roll out the barrel’ budget.
i: Big spender Sunak takes tax burden back to 1950s.
Metro: Cheers Rishi.
POLITICO UK: Why the COP26 climate summit won’t save the planet.
The Daily Telegraph: Hey, big spenders.
The Guardian: Sunak’s post-COVID plan — Spend now, cut taxes later.
The Independent: Sunak faces climate backlash over Budget.
The Sun: ‘I ballooned to 15st on diet of wine, beer and chicken wings .. now I’ve knocked it on the Ed’ — Sheeran exclusive.
The Times: Sunak’s spending spree.
TODAY’S NEWS MAGS
POLITICO Europe: Blah blah blah, blah blah blah — The COP26 talks are almost certain to end in failure.
The New European: A future made in China.
The Spectator: Cop out — Fraser Nelson on Boris’s battle to save the climate summit.
LONDON CALLING
WESTMINSTER WEATHER: ⛅️⛅️⛅️ Breezy with sunny intervals. Highs of 16C.
CONGRATS TO … All the winners of this year’s London Press Club awards, which were handed out a glitzy ceremony last night. Among the big winners were the Mail’s chief reporter David Williams, who did peerless work on left behind Afghan interpreters and won print journalist of the year … The BBC’s ace chief international correspondent Lyse Doucet, who took home broadcaster of the year after reporting extensively from Kabul Airport in August … The Mail’s Andrew Pierce, who picked up multimedia journalist of the year … and the Mirror and Guardian, who won scoop of the year for their joint exposé on Dominic Cummings’ lockdown wanderings. Special mention goes to the Mail and the Mail on Sunday, who won the daily and Sunday newspaper of the year categories respectively.
SPOTTED: The PM’s wife Carrie Johnson practicing her curtsy while waiting for the Duchess of Cornwall to arrive at the Wellcome Trust event in London last night, according to the Mail’s Rebecca English.
BIRTHDAYS: POLITICO Europe’s Editor-in-Chief Jamil Anderlini … Gosport MP Caroline Dinenage … Liverpool Walton MP Dan Carden … Amber Valley MP Nigel Mills … North West Leicestershire MP Andrew Bridgen … Somerton and Frome MP David Warburton … Lib Dem peer and “Gang of Four” member Bill Rodgers turns 93 … Crossbench peer Digby Jones … MoD Director General of Security Policy Dominic Wilson … Broadcaster David Dimbleby … Mail on Sunday columnist Peter Hitchens … and Microsoft founder Bill Gates.
PLAYBOOK COULDN’T HAPPEN WITHOUT: My editor Zoya Sheftalovich, reporter Andrew McDonald producer Grace Stranger.
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Annabelle Dickson
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