Sunak strikes out for pay deals – POLITICO

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— Rishi Sunak announced public sector wage rises of around 6 percent.

— Teachers accepted the offer but doctors and prison officers didn’t.

— The cash will come from higher costs for migrants and departmental savings.

— An influential committee blasted the government over its response to China.

— The government got the green light to fight for its Rwanda deportation plan at the Supreme Court.

**A message from Lloyds Banking Group: Social housing is an integral part of the UK’s housing landscape with millions of people benefitting from stable and affordable homes. That’s why we’re calling for one million new and genuinely affordable homes to be built by 2033. Find out more.**


WAGES WAR: Rishi Sunak claimed a big win on teacher strikes after announcing new public sector pay offers this afternoon — but doctors and prison officers dealt him a blow.

The big moment: Ministers announced that the recommendations of all the independent pay review bodies will be delivered, meaning public service salaries will rise around 6 percent on average. It’s a bid to end the mammoth season of walkouts Britain has been enduring for the past few months. 

Talking tough: Standing behind the podium with his legs crossed at a Downing Street press conference, the PM insisted this really is the end of the negotiations. “Today’s offer is final,” he said. “There will be no more talks on pay. We will not negotiate again on this year’s settlements. And no amount of strikes will change our decision. Instead, the settlement we’ve reached today gives us a fair way to end the strikes.”

The details: My POLITICO colleague Bethany Dawson has been going through the figures published via written ministerial statements this afternoon to tot up what the unions got versus what was being demanded. You can dig into the details here.

The quickfire version … Senior civil servants: Wanted more than 4.5 percent, and accepted 5.5 percent as “fair and reasonable” … Armed forces: It wasn’t clear what the demand was but a 5 percent offer is on the table plus a few extras for certain groups, and 5.5 percent for seniors … Teachers: Wanted 6.5 percent and have accepted 6.5 percent (more on that below) … Doctors and dentists: Wanted 35 percent, but are being offered 6 percent, with an extra £1,250 for juniors. But doctors rejected the offer, arguing it did nothing to make up for a decade of lost earnings … Police: Weren’t clear on what they wanted, but are being offered 7 percent with a few extras for certain groups. Their response statement is a bit open ended … Justice staff: Prison officers wanted 12 percent and are being offered (and have this afternoon rejected) 7 percent, while prison governors wanted 10 percent and are being offered 5 percent.

Kudos to: Top journo Harry Yorke, who managed to get most of this into the Sunday Times at the weekend.

How the deals were done: A little over a week ago, the prime minister and Chancellor Jeremy Hunt agreed the proposals from the pay review bodies would be doable without additional borrowing, and that the government wouldn’t save all that much from holding out. Hunt and Treasury Minister John Glen then called around secretaries of state last Thursday and asked them to work out how to make the savings from their departments. In almost all cases, each department is funding its own wage increases. “Broadly they have to wash their own faces,” one person with knowledge of the process told Playbook PM.

Indeed: The total cash needed (around £2 billion on top of wage settlements announced in recent months) won’t come from more borrowing or tax rises — in a bid to avoid fueling inflation, the PM argued.

So … what’s the deal? Sunak announced that just over £1 billion will come from an increase in visa fees for migrants (up 15 percent for visit and work visas, while a number of other visa-related processes will rise 20 percent.) He also said the health surcharge (which foreign workers stump up to use the NHS) will rise (by 66 percent to £1,035 per annum for the main rate, and £776 for the discounted rate.)

Bear in mind: Both of those are an extra win for Tories who want to crack down on migration.

That leaves … Around £1 billion that needs to be made from departmental underspends and savings. It’s not clear where that cash will come from at the moment — although Glen announced in the Commons this afternoon that a freeze on MoD civil servant recruitment was one factor. Downing Street has also said skills boot camps will be cut, and the education department won’t take forward one of its traineeships schemes as a standalone project. All the savings across all the departments have been locked in and accounted for, Downing Street made clear. Expect the details to be teased out in the coming weeks. 

Speaking of the education department: Sunak’s announcement that all the teaching unions had agreed to suspend their strikes was a kind of extra rabbit out the hat at his press conference. He said it was “enormously wonderful news for our children.” The teaching unions even put out a joint statement with Sunak and Education Secretary Gillian Keegan to show their enthusiasm.

How that deal was done: Playbook PM hears Keegan kept backchannel conversations open with the teaching unions despite the formal talks breaking down. The leak of the review recommendations helped to give teachers an idea of what would be on the table, and the NEU even stated that it would sign up to 6.5 percent if the government offered it. A number of crunch meetings over the last week or so got the final details over the line. Keegan’s deal with the government includes keeping her underspend, Playbook PM hears.

Come on, lads: Sunak, who seemed more pepped up and alert than in recent press conference appearances, implored the remaining strikers to follow the teachers and other unions who have agreed to deals in recent months, arguing “momentum across our public services is shifting” as more and more strikers return to work. He begged: “Do the right thing, and know when to say yes.” 

On the fence: At the Unite conference in Brighton, Labour leader Keir Starmer said the pay offers would be “subject to negotiation” and refused to “wade in” to those discussions. So he won’t state his opinion until … there’s no more debate.

And of course: With the BMA and others still holding out, he might not have to take a view for a long time.

MEANWHILE, MAKING LIFE MORE DIFFICULT FOR THE PM: Overall NHS hospital waiting lists reached a record 7.47 million people in May, up from 7.42 million in March, with almost 400,000 still waiting more than 12 months for treatment. The Health Foundation said the ongoing junior doctors strike and upcoming consultants strike meant “further disruption to patient care is inevitable – a further setback for the prime minister’s pledge to cut waiting lists.” The government argues the longest waits are being prioritized for action and are coming down, even if the overall number of waits continues to rise.

Plus plus plus: new rules allowing temp workers to stand in for striking staff are unlawful, the High Court ruled this morning, on the basis that unions had not had sufficient consultation.


SINO THE TIMES: Security Minister Tom Tugendhat will be on the Radio 4 PM show at 5.30 p.m. to discuss the intelligence and security committee report that found the British response to protecting against Chinese interference has been a “serious failure.” In a long-awaited and damning report, the cross-party group of MPs said the government has been too slow to keep China out of U.K. assets and that Britain could be reaping the consequences for a long time to come. It also said the resources dedicated to tackling threats China poses are “completely inadequate.” My POLITICO colleague Cristina Gallardo has a writeup here.

IT GOES ON RWANDA ON: The government got the green light to take its Rwanda case to the Supreme Court, the Court of Appeal ruled. PA snapped it.

WAR OVER WAR SUMMIT: Rishi Sunak’s Commons statement about his time at the NATO summit in Lithuania descended into a mini-PMQs, for those who were missing the knockabout between leaders over the past couple of weeks.

Warm words ends in politics: Following speeches from the PM and Keir Starmer about how important NATO is and how it’s doing all it can to assist Ukraine, the Labour leader asked Sunak to withdraw his claim on Twitter that the opposition didn’t want him to attend the summit. “On the contrary, we were delighted he was there because in an ever more dangerous world we must be united,” Starmer told the House.

Not so united: But the PM said it was “a bit rich to attack me for missing prime minister’s question time” then complain about his pointing it out — in reference to Labour MP Chris Bryant giving him a hard time about his PMQs absences at the recent liaison committee hearing. He added (to chuntering from the Labour benches) that he welcomed Starmer’s “new-found affection for NATO. He sat there next to someone who didn’t support NATO, who wanted to scrap Trident and abolish our armed forces.” Former Labour leader Jeremy Corbyn wasn’t in the room to defend himself.

RAYNER-ING IT IN: Labour’s deputy leader Angela Rayner announced more details of her plans to slam the revolving door shut as she declared the “good chaps” ethics system had been tested to “breaking point,” my POLITICO colleague John Johnston writes in. Speaking at the Institute for Government, Rayner said the proposed Ethics and Integrity Commission would replace the current ACOBA appointments process, and be enshrined in law with stronger powers to sanction ministers. It wasn’t clear though when the plans would come to fruition.

GETTING STUCK IN: Commons Speaker Lindsay Hoyle weighed in on the debate about ticket office closures during transport questions this morning after Minister Huw Merriman claimed no station that has staff at the moment will end up unstaffed. The speaker said that in his seat of Chorley, the proposal is for the ticket office to be staffed for half the time it is at the moment. “Don’t forget what what you’re being told isn’t the case,” he added.

DOG ATE MY HOMEWORK LATEST: Why can’t Cabinet Office officials get into Boris Johnson’s old phone to send his messages to the COVID probe? Because he’s forgotten the passcode, of course. At least that’s the claim. More from Steven Swinford, who broke it in the Times.

Speaking of the pandemic probe: Next week’s hearings lineup has been released, and it includes various COVID-19 Bereaved Families for Justice leaders on Tuesday at 10 a.m.

COMING ATTRACTIONS: BBC bosses including Tim Davie will appear before the Lords communications committee next week. No doubt the whole Huw Edwards saga will come up.

Speaking of Huw: The PM was asked about the row at his press conference and said the BBC should be granted the space to investigate what happened. Meanwhile in her IfG appearance, Labour deputy leader Angela Rayner said it was an “absolute tragic situation, which has pitted parents against a child; the BBC against the Sun; and Huw Edwards is obviously in an awful situation now.”

GROWING PAINS: Shadow Chancellor Rachel Reeves said the drop in GDP of 0.1 percent in May (in part due to the extra bank holiday for the king’s coronation) showed the government “seems determined to march us down a path of low growth and economic insecurity.” Lib Dem economic spokeswoman Sarah Olney said it was “high time ministers stopped wishing the crisis away and took action.”

But of course: Chancellor Jeremy Hunt blamed high inflation and said the best medicine is to “bring inflation down as quickly as possible. Our plan will work, but we must stick to it.”

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THE POLITICAL PIVOT: Energy Secretary Grant Shapps went big on his passion for spreadsheets in an amusing speech to a room full of lobby hacks during a posh lunch in parliament.

The numbers dude: Shapps has developed a reputation in Westminster for tracking and predicting voting results in Conservative leadership contests, having crunched the numbers for both Boris Johnson then Rishi Sunak.

Rabbit out the hat: But at the lunch he produced a spreadsheet with notes about journalists — including those not to call before 11 a.m. until which time they are expected to be “comatose.” Sadly the A3 sheet he pulled out to illustrate it was just a dummy.

On the menu: Following a feed of charred asparagus with pea tendrils (??) and an egg yolk jus (!?) followed by seared duck with sweet potato, Shapps admitted his spreadsheet obsession makes him “a bit of a nerd.”

Let’s get serious for a mo: Shapps also weighed into the debate about hydrogen, after ministers ditched plans for a crucial trial.

Background: The government has committed to deciding on the strategic role of hydrogen in the gas network by 2026 but its position is still evolving. To make things trickier, Energy Minister Lord Callanan announced earlier in the week that the “hydrogen village” trial in Whitby, Ellesmere Port (which Shapps said was “fundamentally unpopular”) would no longer take place.

Cue Shapps: “I’m not sure that home heating will be all through hydrogen, I think it will have a role to play,” the Cabinet minister said in response to a question from my POLITICO colleague Abby Wallace, adding that it would more likely be used in heavy industry, storage and transport. On the hydrogen deadline, Shapps added: “We’ll make sure we stay on track.”


HARSH EFFICIENCIES SAVINGS: The AI subtitles on YouTube for Rishi Sunak’s press conference had other ideas about where the health service could find spending efficiencies. Playbook PM doesn’t think “sacrificing babies” is quite the line.

LIFE’S FANTASTIC WHEN YOU’RE MADE OF PLASTIC: This shot of Conservative peer Ed Vaizey and Politics Joe’s Ava Santina posing as Barbie and Ken is one for the ages.

HACKED OFF: Former Scottish Conservatives leader Ruth Davidson appeared to be flogging MacBooks after her Twitter account was hacked. The National has a writeup.


FROM RUSSIA: A senior Russian general claimed he was suddenly dismissed after criticizing Moscow’s defense ministry. General Ivan Popov said in a voice note on Telegram that he had raised questions about “the lack of counter-battery combat, the absence of artillery reconnaissance stations and the mass deaths and injuries of our brothers from enemy artillery,” only for Russian Defense Minister Sergei Shoigu to order his firing. CNN has more.

FROM UKRAINE: Kyiv is unlikely to renew a gas transit deal that allows Russia’s Gazprom to export natural gas to the EU using pipelines running across Ukraine, Energy Minister German Galushchenko told POLITICO. Full story here.

FROM THAILAND: Pita Limjaroenrat, who won Thailand’s election in May, has failed to bag enough votes in parliament to become the country’s prime minister — but is vowing to fight on. The BBC has the story.

**A message from Lloyds Banking Group: Lloyds Banking Group is calling for one million new and genuinely affordable homes to be built by 2033 to help those on the lowest incomes, with a focus on supporting people at risk of, and experiencing, homelessness. We’re working in partnership with national homelessness charities Crisis, and Simon Community in Northern Ireland, to help everyone have a place to call home. We’ll bring together individuals and organisations to develop a shared understanding of the scale and the causes of the problem at hand. Working together, and with others in the sector, we’ll seek to overcome the barriers preventing the adequate provision of quality and affordable homes to help end homelessness in the UK. It is one of the ways we’re helping Britain prosper. Find out more about our partnership here.**


LEADING THE NEWS BULLETINS: Channel 5 News (5 p.m.) is leading on public sector pay … BBC News at Six is leading on public sector wages and strikes … Channel 4 News (7 p.m.) is … also leading on public sector wages.

Tom Swarbrick at Drive (LBC, until 6 p.m.): Layla McCay, NHS Confederation … Chris Thomas, IPPR … Chris Justham, 7 Investment Management.

BBC PM (Radio 4, 5 p.m.): Security Minister Tom Tugendhat.

Drive with John Pienaar (Times Radio, 5 p.m.): Mary Boustead, NEU … Schools Minister Nick Gibb … Labour MP and intelligence and security committee member Kevan Jones … Journalists Isabel Hardman and Rachel Sylvester.

The News Agents (Podcast, drops at 5 p.m.): Former Sun Editor David Yelland.

Tonight With Andrew Marr (LBC Radio, 6 p.m.): Schools Minister Nick Gibb … Former Downing Street aide Munira Mirza … the BMA’s Phil Banfield … Journalist Mikhail Zygar … the FT’s George Parker … Columnist Sarah Vine … Sketchwriter John Crace

Jeremy Kyle Live (TalkTV, 7 p.m.): Former BBC presenters Carole Walker, Adrian Mills, John Sergeant and Martin Bell … anti-BBC campaigner Rebecca Ryan … GB News presenter Alex Phillips … commentator Frankie Leach.

Piers Morgan Uncensored (TalkTV, 8 p.m.): U.S. presidential candidate Chris Christie.

REVIEWING THE PAPERS TONIGHT: Talk TV (10 p.m.): Economics commentator Grace Blakely and journalist Lowri Turner … Times Radio (10.30 p.m.): Kevin Schofield from HuffPost U.K. and Alicia Fitzgerald from … Sky News (10.30 p.m. and 11.30 p.m.): Broadcaster Steve Richards and former SpAd Salma Shah.


GETTING PISSED FOR THE PLANET: The Green Alliance hosts its summer drinks from 6.30 p.m. with a special U.S. guest. Invites needed.

GOODBYE GB: Outgoing GB News Political Editor Darren McCaffrey has his leaving drinks at the the Marquis of Granby from 6 p.m.

BUSINESS AND BOOZE: The British Chambers of Commerce hosts its summer press drinks at the Two Chairmen from 6.30 p.m. Invites needed.


HOW TO POLICE THE INTERNET: The NAO has a report out on online harms and whether the government and regulators are on it enough.

BROKEN BRITAIN: Junior doctors are still on their marathon strike.

THE WORLD AS IT IS: The Office for National Statistics will publish a report on the cost of living from 9.30 a.m.

IN THE LORDS: Peers file through a bunch of third readings from 10 a.m. before three second readings and a committee stage. It’s almost like this lot are overworked.


PACKED LUNCH OR PARL LUNCH: Subject to change, here are the lunch menus on the estate tomorrow: Bellamy’s: Soup and sandwiches … The Debate: Smoked haddock with poached egg and kedgeree; chili, black bean, sweet potato and squash stew with jumbo couscous and apricots; tandoori chicken breast on khobez bread with red onions and mint salad … Terrace Cafeteria: Fish and chips; bratwurst hot dog with trimmings; chickpea and vegetable curry with trimmings … River Restaurant: Saveloy sausage with chips and beans; beetroot and falafel kebab with trimmings; fish and chips.

CRUMBLING PARLIAMENT LATEST: Commons building specialists reckon the rest of the roof in Portcullis House is safe, after a glass panel broke earlier in the week and let a stream of water in. There’s now a full scaffolding rig in PCH while the panel in question is being repaired. The cafes and entrances are all up and running as normal.

SPOTTED: Dining together in the River Restaurant in parliament this afternoon were Conservative peer David Frost and former Downing Street SpAd for all matters Brexit, Hugh Bennett.

WHAT I’VE BEEN READING: The New Statesman’s Zoë Grünewald interviewed Labour grandee David Blunkett about what Keir Starmer needs to do to win the keys to Downing Street.

ON THIS DAY IN POLITICS: On 13 July 2016, Theresa May became the second ever female prime minister of Britain.

THANKS TO: My editor Matt Honeycombe-Foster, Playbook reporter Noah Keate and the POLITICO production team for making it look nice.

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Emilio Casalicchio

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