Energy levels — Cream tea coup — National housing scandal

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By ALEX WICKHAM

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Good Thursday morning.

THANK YOU: To the many, many MPs, SpAds, opposition aides, civil servants, government sources, Whitehall insiders, “senior Tories,” diplomats, journalists, think tankers, public affairs types and readers who turned out for POLITICO’s packed London drinks last night. There were far too many to name for a spotted roll call — that or Playbook mislaid the guest list on the way home. Please send any letters of no confidence to my editor.

DRIVING THE DAY

ENERGY LEVELS: Downing Street is braced for a cost of living double whammy today as a massive increase to the energy price cap is announced this morning alongside an expected hike in interest rates. Ofgem, the energy regulator, is set to confirm that bills could rise as high as £2,000 per household from April, with Chancellor Rishi Sunak due to make what Treasury sources are billing as a “significant intervention” in the Commons spending billions of pounds to help ease the crisis. Sunak will also hold a press conference in Downing Street this evening to explain the coming squeeze and his support package to the public. As the number of Conservative MPs sending no confidence letters in Boris Johnson ticks up further, today is a stark reminder that the Tories face voters’ concerns on issues other than Partygate.

Key timings: Cost of living is the story of the day. Here’s how it will play out:

11 a.m. — Ofgem energy price cap statement. The BBC and today’s front pages have been briefed that it could be set as high as £2,000 per household, an increase of around 50 percent from the current cap of £1,227. The Guardian’s Jillian Ambrose says the announcement had been due next Monday but has been brought forward “to help ease growing concern and speculation over the maximum energy tariff.”

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11.30 a.m. — Sunak will make a statement to the Commons setting out further steps he will be taking to help people deal with this rise. Journalists will get a press notice from the Treasury at the same time.

Midday — The Bank of England’s monetary policy committee will then announce its interest rates decision, widely expected to be an increase from 0.25 percent to 0.5 percent. This would be the first successive rise in interest rates since 2004. The bank will also issue revised inflation forecasts.

5 p.m. — Sunak will hold a televised press conference from No. 9 Downing Street.

Why are energy bills rising? The BBC has a useful explainer on the basics. A worldwide squeeze on gas and energy supplies, the cold winter in Europe, a relatively windless summer, increased demand from Asia — not to mention ongoing geopolitical issues — mean wholesale gas prices have risen to unprecedented levels. More than 20 retail energy suppliers have collapsed in the U.K. in the past few months, affecting 3.8 million households.

What does the cap rise mean? Paying £600 plus per year more for their energy will push a quarter of U.K. households into fuel poverty, the Resolution Foundation think tank says. A house is in fuel poverty if more than 10 percent of its post-rent or mortgage income is spent on energy. Sky News has that story. Similarly, the Mirror’s Graham Hiscott has a Deltapoll survey that finds a £33 per month rise would put one in four households into “extreme financial difficulty.”

What’s Sunak going to do about it? It is not every day that the chancellor gives an emergency press conference from Downing Street, which shows how keen the government is to show it is acting (and to top the news bulletins amid the ongoing Tory leadership mess). There was no confirmation from the Treasury last night on exactly what measures the chancellor will announce in response to Ofgem and the BoE rate rise, though today’s papers have some well-informed speculation. The FT’s George Parker, Nathalie Thomas and Chris Giles say Sunak will work “in tandem” with the BoE, with “coordinated moves intended to calm nerves among consumers and in the markets.”

Council tax cut: It appears Sunak will be taking a dual approach to help save households money. The Times’ Steve Swinford and Emily Gosden say there will be council tax rebates for millions of people in bands A to C, with the poorest households getting the biggest cut. Wednesday’s Playbook reported that senior Tories expected targeted tax interventions to help people in poorer areas to be a key plank of the leveling up agenda. The Telegraph says Leveling Up Secretary Michael Gove has been arguing for the council tax cut.

On top of that … all households will get a one-off £200 discount on their energy bills in April thanks to a “rebate and clawback” plan that will see the taxpayer underwrite loans to energy firms, the firms then give consumers an immediate rebate on bills, then claw the money back in years ahead when energy prices fall. Swinford and Gosden got the scoop on that on Wednesday. The Resolution Foundation’s Torsten Bell reacts: “Higher bills tomorrow for not quite such a big bill rise today is a massive political gamble. People will be paying for 2022’s energy bills when they go to vote in 2024 (the only benefit of this approach is it keeps it largely off government books).”

What Sunak won’t be doing: Some on the Tory right had wanted the government to scrap green levies on energy bills instead. The Telegraph’s Ben Riley-Smith, Harry Yorke, Rachel Millard and Tom Rees say that won’t be happening, and carry strong criticism of the loan plan from backbenchers Steve Baker and John Redwood. Baker says: “Once again they are piling intervention on intervention, when we should be a free market, conservative government. The levies should be suspended and moved on to general taxation.”

Broken VAT promise: Expect more questions today about Boris Johnson’s Brexit referendum pledge on removing VAT from energy bills. He said in 2016: “As long as we are in the EU, we are not allowed to cut this tax. When we Vote Leave, we will be able to scrap this unfair and damaging tax.” Well, the country voted leave, Johnson became PM, and now this “unfair and damaging tax” does not appear to be being scrapped.

Where does your money go? The Beeb has a great graphic showing the make-up of a typical consumer’s £1,227 energy bill (scroll down here). Some £528 goes toward the wholesale cost, £268 goes on network costs such as pipes and wires, £204 goes on operating costs, then there’s £159 on green levies and £61 VAT, leaving £23 profit for the supplier.

Only so much they can do: Today is a moment of serious political danger for Johnson and Sunak as they risk going into the next election with people having less money in their pockets. The Mail’s front page storms “the heat is on Rishi,” but government sources admit to Jason Groves and Sean Poulter that the scale of the cost of living crisis was beyond what the government could afford to offset.

Timing: The Confederation of British Industry meanwhile today warns that government policy risks trapping Britain in a cycle of high taxes and low growth. Director Tony Danker says: “The current settlement isn’t working. There are rising spending pressures; too much tax; and too little growth. We’re caught in a trap.” The Guardian’s Larry Elliott has his comments.

What Labour is saying: Elliott notes that the CBI intervention echoes the attack lines Labour leader Keir Starmer used at Prime Minister’s Questions on Wednesday. Labour will spend the day pushing its plan for a windfall tax on oil and gas companies and cutting VAT on energy bills.

DRIP, DRIP, DRIP

CREAM TEA COUP: The drip of public letters of no confidence in Boris Johnson increased to an unmistakable trickle on Wednesday as three more Conservative MPs withdrew their support for the prime minister. Gary Streeter, an unassuming and generally well-respected veteran who’s been in parliament since 1992, will be of most concern to Downing Street as he is hardly a usual suspect. Anthony Mangnall is a former William Hague aide, One Nation Tory and aid rebel who has been critical of the government for some time. Defense Select Committee Chair Tobias Ellwood is not a name that is going to inspire many more colleagues to follow him, especially after the curious spectacle of journalists being briefed of his intentions in advance. The Mail’s John Stevens has a double page spread noting that Streeter and Mangnall are both Devon MPs, branding it the “cream tea coup.”

It is not lost on Tory MPs … that Ellwood has put a letter in despite being exposed by the Mail for himself allegedly breaking lockdown in Christmas 2020 by attending a dinner with 27 guests at a Mayfair private members’ club. Ellwood claimed it was a “business meeting.” Sounds more like an ambush.

The names are worrying for No. 10 for several reasons: Three MPs going public with confidence letters in one day means there is every chance that several more may have done so without making it known. There is the possibility therefore that the number of overall letters could be higher than thought. These MPs are not from the same wing of the Tory party so there is the chance that the key 54-threshold triggering a confidence vote is met organically, without any plot to make it happen. Alternatively, some speculated yesterday that the announcements were being timed deliberately and that there was some level of orchestration. The Times’ Henry Zeffman and Steve Swinford reckon another five MPs, including members of the government, are considering sending letters in the coming days.

A question of timing: Tory MPs who spoke to Playbook yesterday mostly agreed that a confidence vote on Johnson’s future was likely at some point in the next few months. A consensus view appears to be emerging that how that vote goes depends on its timing. One Tory MP and vocal Johnson critic suggested to Playbook yesterday that if the letters hit 54 imminently, with a confidence vote this week or early next week, Johnson would win as he would be able to argue he should be judged after the police investigation into Partygate concludes. The MP said this would be a disaster for those who want rid of the PM as he would then be safe from a challenge for a year. However, if the letters hit 54 following a major new development — either a new revelation, a police fine or the publication of a very damning full Sue Gray report — and the vote was held then, it would be much easier to reach the 181 Tory MPs needed to oust Johnson, the MP argued.

Caveat: The above seems to be a rational argument from a Tory MP on how best to remove Johnson. However, you cannot rely on Tory MPs to act rationally — others may decide now is the time to force a vote, or the letters may just hit 54 naturally over the coming days or weeks without a specific trigger. And of course when that happens, the narrative can always quickly turn again in terms of how likely it is that Johnson would win the vote. The most likely next step is that the steam of letters just continues to tick up.

8-year plan: Johnson tells the Sun’s Harry Cole that he won’t quit over Partygate, that “I’ve got a lot more to do,” that he’ll seek reelection in 2024 and wants to govern until the end of the decade.

Energy levels — Cream tea coup — National housing scandal – POLITICO 2

TODAY IN WESTMINSTER

HOUSE OF COMMONS: Sits from 9.30 a.m. with transport questions, followed by any UQs … Commons leader Jacob Rees-Mogg is up next with the weekly business statement … then the main business will be backbench debates on the government’s education catch-up and the code of conduct for MPs.

IT’S BY-ELECTION DAY: In Southend West following the killing of David Amess. The Tories will hold the seat with Brexit campaigner Anna Firth becoming the next MP as the main opposition parties have stood aside.

HEADING UP: Boris Johnson and Michael Gove are on a visit to the north-west today where they will build on the announcement of Wednesday’s leveling up white paper. Playbook is told they’ll be visiting several locations and there will be another clip for broadcast. It’s fair to say the white paper probably landed better than expected, in part thanks to the rock bottom expectations set by negative briefings at the beginning of the week.

Mission impossible: My POLITICO colleague Esther Webber says the 12 missions announced Wednesday were Johnson’s most serious set of promises yet, but notes he may not get the chance to deliver on them. Esther has the boffin reaction: Henri Murison, director of the Northern Powerhouse Partnership think tank, said there “was a lot to like” in the strategy, notably that “after a few years in the wilderness,” devolution of power away from Whitehall and Westminster now appears to be “back on the agenda.” Will Tanner, director of center-right think tank Onward, said the plan fired “the starting gun on a regeneration revolution” offering “a practical route map” to reversing inequality between U.K. regions. “What we’ve had so far is just short-termism and pork-barreling, so missions set over a decade are to be welcomed,” said Nicola Headlam, an economist and former senior civil servant who worked with George Osborne, the former Conservative chancellor who became an enthusiast for giving power away to the regions.

Where’s the money, Rishi? The FT’s Seb Payne wrote the book on leveling up and the red wall. His “Broken Heartlands” has affected leading politicians’ decision-making and rhetoric on both sides of the divide in a way that is particularly rare — Gove told colleagues they should read the book ahead of the white paper launch, and Keir Starmer has also used it to help plot Labour’s return to power. Payne has this detailed and nuanced analysis of what is and isn’t in the white paper, concluding that “it’s strong on diagnosis and aspirations,” that there’s “lots to welcome,” but “key questions remain on delivery and detail” and the plan is going to need “a lot more cash.”

UKRAINE LATEST: Johnson finally had his call with Russian President Vladimir Putin last night. Here’s the No. 10 readout: “The Prime Minister expressed his deep concern about Russia’s current hostile activity on the Ukrainian border. He emphasised the need to find a way forward which respects both Ukraine’s territorial integrity and right to self-defence. The Prime Minister stressed that any further Russian incursion into Ukrainian territory would be a tragic miscalculation.” Meanwhile, the FT’s Jim Pickard has a good tale on how the U.K. sanctions agency has only issued six fines in six years.

BREXIT NEWS: Foreign Secretary Liz Truss will speak to her EU counterpart Maroš Šefčovič to take stock of the Northern Ireland protocol talks. A U.K. official told Playbook: “Talks have been positive and constructive so far, but Liz will stress the need for urgent progress and a deal that defends political stability and peace in Northern Ireland. That should be the goal for both sides.” An EU official said that so far there has been no change in the substance of the talks since Truss took over from David Frost as Britain’s Brexit negotiator.

STARMER’S DAY: This could be one to watch … Labour leader Keir Starmer is giving the keynote speech today as Edelman unveils its annual U.K. trust findings. No way he was gonna miss that one.

Time up for Cress? Spokesperson for London Mayor Sadiq Khan says he put Met Police Chief Cressida Dick “on notice” during a “very frank” meeting yesterday following the shocking revelations of police abuses at Charing Cross station. The BBC’s Laura Kuenssberg says there have been tensions between Home Secretary Priti Patel and No. 10 on what to do with Dick, with Patel wanting to speed up the process for finding a replacement. No. 10 overruled her and still Dick stays in post.

SHOULD BE A MUCH BIGGER STORY: Campaigner Kwajo Tweneboa posted this video of the dire state of cockroach infested, black-mould-covered social housing in Lewisham. ITV’s Daniel Hewitt has done some incredible reporting on this national scandal but it remains an issue with a total lack of focus in Westminster.

CRUMBLEWATCH: Regular readers of Esther Webber’s dispatches in Playbook will know that Commons management recently asked the independent sponsor body responsible for restoration at Westminster to conduct yet another review into MPs’ “continued presence” in the palace while work is carried out. This exercise cost £5 million and upheld the findings of multiple previous reviews that keeping MPs on the estate would cost more, take longer and be less safe. Following that verdict, the commission has proposed getting rid of the sponsor body altogether. It would be replaced with a new “department” answerable to … the commission, on which the speaker and Jacob Rees-Mogg sit. The proposal will now go to the Lords, which has in the past looked more favorably on the idea of moving out. Hold onto your hard hats.

A government official said: “The intention of the proposal at Commission is to enable a more rapid prioritisation of critical work on the Palace and reduce the need for a complete or nearly-complete decant of the Palace … all with an eye on the need for this to get political buy-in from all MPs, and when word got out about a £13bn project lasting 28 years (inc 20 year decant) the mood really shifted.”

COMMITTEE CORRIDOR: Foreign Secretary Liz Truss is up at the foreign affairs committee, alongside top civil servant Philip Barton (10 a.m.) … and former Labour MP Gisela Stuart faces PACAC as the government’s favored choice to become the first civil service commissioner (10 a.m.).

YESTERDAY’S UK COVID STATS: 88,085 positive cases. In the last week there have been 624,034 positive cases, ⬇️ 22,762 on the previous week … 534 deaths within 28 days of a positive test. In the last week 1,806 deaths have been reported, ⬇️ 25 on the previous week. As of the latest data 15,233 COVID patients are in hospital.

HOUSE OF LORDS: Sits from 11 a.m. with questions on wild birds, benefit sanctions and absent school children … Followed by day three of the Nationality and Borders Bill’s committee stage.

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MEDIA ROUND

FCDO Minister James Cleverly broadcast round: talkRADIO (7.05 a.m.) … Times Radio (7.05 a.m.) … LBC (8.20 a.m.) … Sky News (8.45 a.m.).

BBC Breakfast: Energy UK’s Emma Pinchbeck (7.30 a.m.).

Also on Sky News breakfast: Shadow Chief Secretary to the Treasury Pat McFadden (8.05 a.m.) … Former Chief of the Defense Staff Richard Dannatt (8.20 a.m.).

Also on Nick Ferrari at Breakfast (LBC): Former Education Secretary Justine Greening (7.20 a.m.).

Also on Times Radio breakfast: General Richard Shirreff, former NATO deputy supreme allied commander in Europe (8.05 a.m.) … Shadow Chief Secretary to the Treasury Pat McFadden (8.35 a.m.) … Former Brexit Secretary David Davis (9.05 a.m.).

Also on Julia Hartley-Brewer breakfast show (talkRADIO): Tory MP Craig Mackinlay (8.05 a.m.).

Politics Live (BBC One 12.15 p.m.): Tory MP Jo Gideon … Lib Dem MP Wendy Chamberlain … The FT’s Chris Cook … MailPlus’ Michael Crick … Reform Deputy Leader David Bull.

GB News breakfast: Shadow Chief Secretary to the Treasury Pat McFadden (8.50 a.m.).

Question Time (BBC One 10.35 p.m.): Shadow Mental Health Minister Rosena Allin-Khan … Imperial College London’s Robin Shattock … NHS Confederation Chair Victor Adebowale … Telegraph columnist Tim Stanley.

Reviewing the papers tonight: Sky News (10.30 p.m. and 11.30 p.m.): Broadcaster Steve Richards and IEA spinner Annabel Denham … Times Radio (10.30 p.m.): Chris Southworth from the U.K. International Chamber of Commerce and Political Editor of the New Statesman Stephen Bush.

TODAY’S FRONT PAGES

(Click on the publication’s name to see its front page.)

Daily Express: A tragic gamble!

Daily Mail: Energy bills to soar by £650 — now the heat is on Rishi.

Daily Mirror: D-day on prices agony.

Daily Star: Squeaky bomb time.

Financial Times: Sunak and BoE work in tandem to head off ‘cost of living catastrophe.’

HuffPost UK: What ‘levels up’ must come down.

i: No more funding to ‘level up’ U.K.

Metro: Putin gives Boris a buzz.

POLITICO UK: Boris Johnson just got serious. It could be too late.

PoliticsHome: Northern Tories say government must ‘get on’ with leveling up plans immediately.

The Daily Telegraph: Sunak splashes out to ease bills crisis.

The Guardian: Pressure on PM as more Tory MPs call for him to go.

The Independent: Pressure rises on Johnson as Tories urge him to quit.

The Times: Millions of families to get cuts in council tax.

TODAY’S NEWS MAGS

POLITICO Europe: From Lantau to Ealing.

The New European: The 27 — Who they were. Why they came. How they died.

The New Statesman: Going under — Andrew Marr on why Boris Johnson is beyond saving.

The Spectator: Frozen — Can China escape its zero-COVID trap?

LONDON CALLING

WESTMINSTER WEATHER: ☁️☁️☁️ Cloudy and breezy once again. Highs of 11C.

BIRTHDAYS: Newsnight presenter Kirsty Wark … Lib Dem peer Alan Watson … Human rights lawyer Amal Clooney … Former Transport for the North Chairman John Cridland … Former London Stock Exchange Group chief Paul Heiden.

PLAYBOOK COULDN’T HAPPEN WITHOUT: My editor Zoya Sheftalovich, reporter Andrew McDonald producer Grace Stranger.

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