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Mortgages Up | Covid Inquiry | Ukraine Conference

Rising mortgage rates and questions around the sustainability of the housing market have created a difficult domestic news agenda for the Prime Minister, in a week that also saw MPs vote to agree that Boris Johnson lied to Parliament, and the COVID inquiry kick into full gear.


Welcome to the weekly roundup from Navigate Politics, bringing you all the top news, publications and movements from UK politics over the past seven days, ensuring you’re fully briefed on the top stories ahead of the weekend. If you know somebody who would find this briefing useful, please do forward it on so they can subscribe and get it direct to their inbox each Friday.


Driving the Week 🚨


Rising mortgage rates have been front and centre of the political debate this week after the latest figures showed inflation failed to fall in May (remaining doggedly at 8.7%) and the Bank of England raised the interest base rate by a further 0.5%, to 5% on Thursday. The move, designed to curb inflation, immediately added hundreds of pounds to thousands of people’s monthly mortgage payments, with lenders upping their fixed term rate offerings once again. The Chancellor backed up the independent Bank of England’s decision by tweeting that lowering inflation is the ‘only long-term way to relieve pressure on families with mortgages’, and appeared to reject suggestions of a mortgage interest relief scheme at Treasury Questions on Tuesday. However the Government are getting it in the neck from both backbenchers and the polls who are reflecting the pressure homeowners are facing – a key, if not the key demographic in the General Election next year. In a damned-if-you-do, damned-if-you-don’t situation, there are no easy fixes for the Government, who risk the continued ire of mortgage holders if interest rates rise, and the anger of renters struggling to save to get on the housing ladder, if those already on the ladder are thrown a supporting rung. All hopes in Downing Street now lie on inflation (and interest rates) falling dramatically over the next year.


The UK’s Covid-19 Inquiry saw a plethora of big names questioned this week with both former Prime Minister David Cameron and former Chancellor George Osborne give evidence on the UK’s preparations for a pandemic. Both denied the Government had been unprepared when they left office, and whilst Cameron admitted that it was a “mistake not to look more at the range of different types of pandemic”, he highlighted his Government’s work to act on Ebola, adding “we did more than many to try and scan the horizon”. Similarly Osborne argued that austerity measures taken at the time had meant the UK was better prepared financially for the huge hit the economy faced during the pandemic, adding that no western nations’ Treasury had planned “for asking the entire population to stay at home for months and months on end”. The Inquiry has also questioned former Chief Medical Officer Dame Sally Davies, current Chief Medical Officer Professor Sir Chris Whitty and former Chief Scientific Adviser Professor Sir Patrick Vallance. Former Health Secretary Matt Hancock and former First Minister of Scotland Nicola Sturgeon will be up before the Inquiry when it continues next week.


Keir Starmer delivered a speech setting out Labour’s proposals on energy in Edinburgh on Monday. Part four of Labour’s five missions on growth, crime, the NHS, energy and education, detailed his plans to “cut bills, create jobs and provide energy security for Britain”. In a speech that was largely eclipsed by other news stories this week, he announced Labour would “borrow to invest” in new industries but argued for the need to accept the “constraints of fiscal responsibility”; highlighted the need to “throw everything” at planning reform, procurement, long-term finance, R&D and the supply chain; and criticised the Government’s “dismissal of industrial strategy”. He also outlined three steps a Labour Government would take in its first year – create a National Wealth Fund, reform Contracts for Difference to ensure they “deliver jobs as well as investment”, and create Great British Energy.


The Week in Stats 📉


5% - Highest Bank of England base rate, as set this week, since October 2008


8.7% - UK inflation rate in the 12 months to May, unchanged from April


6.01% - Average mortgage rate for a two-year fixed deal, with a five-year deal standing at 5.67%.


3.5% - The amount average UK house prices increased by in the 12 months to April, down from 4.1% in March


4.8% - Estimated tax gap for the 2021 to 2022 tax year which remained the same as last year.


202 - Businesses named by the Government this week for failing to pay the minimum wage


75 - years (yesterday) since the MV Empire Windrush arrived in the UK


Other Political News 📰


The week began with MPs voting to accept the Privileges committee's report on whether Boris Johnson deliberately mislead Parliament. MPs voted 354 – 7 to support Boris Johnson MP's 90-day suspension from the Commons, which would have been enacted had he not resigned as an MP just days earlier. With a one line whip in place, 227 Conservative MPs chose not to vote. The suspension recommendations came after the report found he had knowingly misled Parliament multiple times on parties in Downing Street during Covid. He has also been stripped of special access to Parliament. Rishi Sunak faced accusations of “running scared” of Monday night’s vote in Parliament, with No 10 stating he had been too busy with actual Government business of hosting the Swedish Prime Minister to attend.


The Ukraine Recovery Conference was held in London this week and brought together over 1,000 public and private sector decision makers that represented 59 countries, 33 international organisations, over 400 businesses and 130 civil society organisations. The conference aimed to raise money to rebuild Ukraine’s shattered infrastructure following Russia’s invasion and support their ambitions for a more 'modern, open and resilient economic future'. The conference featured PM Rishi Sunak and Foreign Secretary James Cleverly opening the event to announce the UK funding, including $3bn of World Bank loan guarantees. It also saw the launch of the Lugano Principles, which lay the foundation for Ukraine’s reconstruction process. Antony Blinken, the US Secretary of State, said the US was also providing a further $1.3bn in aid, including $520m to overhaul Ukraine’s energy grid, of which Russia had destroyed half.


Labour has been forced to defend its plan to appoint dozens of peers to the House of Lords if it wins the next General Election, arguing it will prioritise getting Government legislation passed. While the decision is arguably necessary to avoid a holdup of legislation in the Lords (where the Conservative Party currently have 50% more Peers than Labour), expanding the House of Lords contradicts Labour’s commitment to replace the Upper Chamber with a smaller, cheaper, democratically elected second chamber. Starmer’s spokesperson said on Wednesday there could be ‘interim reforms’ along the way to abolition but that the party would not commit to this replacement in a first term in Government.


Defence Secretary Ben Wallace MP will not be the next NATO Secretary-General. “It’s not going to happen,” Wallace told The Economist in an interview published Wednesday night after he appears to have failed to get the backing of key allies. According to Wallace, US President Joe Biden wanted current chief Jens Stoltenberg, who was due to step down in September, to stay on in the role until next year. Reasons circulating include continuity in a time of war, some EU leaders having little desire to have a Brit in the job after Brexit, or that the job should be reserved for a former head of Government such as Danish Prime Minister Mette Frederiksen who has been mentioned in diplomatic circles as a top candidate.


Co-leader of the Scottish Greens, Lorna Slater MSP survived a Conservative vote of no confidence to remove her from her role as Minister for Green Skills, Circular Economy and Biodiversity. The vote arose from Circularity Scotland calling in administrators after the two-and-a-half-year delay to Scotland's Deposit Return Scheme saw financial backers abandon the industry-led body. The British Beer and Pub Association, the British Soft Drinks Association and the Scottish Retail Consortium also confirmed that they did not have the “confidence required to provide further voluntary funding for the company.” Labour and the LibDem MSP's supported the Conservative motion, with former cabinet secretary Fergus Ewing MSP joining them and putting himself at risk of losing the SNP whip.


Winnie Ewing, who became the SNP's first female MP in 1967, passed away this week. Flags at Holyrood were lowered as a mark of respect following confirmation of Mrs Ewing's death. In life, she served also as an MEP, an MSP and the first presiding officer of the reconvened Scottish Parliament in 1999. Scotland's first minister Humza Yousaf, the SNP's leader, said he was heartbroken at losing "a shining light of our party".


Around the World 🌍


It’s been a week of high-level international visits, which started with US Secretary of State Antony Blinken visiting China. In the first trip by a top US diplomat to the country in over five years, he aimed to stabilise the increasingly fraught US-Chinese relationship, undertaking what were apparently ‘candid’ talks with his counterpart Foreign Minister Qin Gang, who committed to visiting the USA at a "suitable time." He then met President Xi Jinping, who repeated the line that while China “does not seek to challenge or displace the United States”, the US needed to “respect China and must not hurt China’s legitimate rights and interests” (read: Taiwan).


Indian Prime Minister Modi undertook his first state visit to the USA, receiving a lavish state reception. He addressed Congress, hinting at China as a “dark cloud” of “coercion and confrontation” and received a standing ovation, although some Democrats boycotted his speech over alleged human rights abuses. He also attended a press conference alongside President Biden (marking one of the only times he has taken questions from reporters during his tenure), during which they announced agreements on semiconductors, critical minerals, technology, space cooperation and defence cooperation and sales. The visit was an attempt by the US to shore up the relationship with India, which has not overtly criticised Russia for its invasion of Ukraine but is wary of China’s growing influence.


Petteri Orpo, leader of Finland’s National Coalition Party, will become Finland’s new Prime Minister (as expected). The National Coalition Party had come first in April’s elections, and following coalition negotiations it announced it would form a right-wing government alongside the Finns Party, the Swedish People’s Party and the Christian Democrats, a grouping which holds 108 out of the Finnish parliament’s 200 seats.


Estonia has become the first eastern European country to legalise same-sex marriage. Estonia’s parliament approved the law by 55 votes in its 101-seat parliament, receiving the backing of a coalition of liberal and social democratic parties. The law will come into effect next year. Neighbouring Latvia and Lithuania both have similar bills stuck in parliament, although Latvia’s incoming president is openly gay.


The trial of former Brazilian President Jair Bolsonaro has begun. Bolsonaro is charged by the Supreme Electoral Court of spreading misinformation before last year’s presidential election, relating specifically to a speech in which he cast doubt on the security of electronic voting machines and alleged there would be large-scale fraud (against his campaign, of course). The charges are not criminal, although he is also under investigation in a number of separate criminal cases. If found guilty, he could be barred from running for office for eight years. Bolsonaro is currently residing in Florida, just like another certain ex-president who is accused of questioning the validity of the election they lost…


In Parliament 🏛


The Finance (No. 2) Bill completed its stages in the House of Commons. According to Financial Secretary to the Treasury Victoria Atkins MP, the Bill “takes forward measures to support enterprise and grow the economy by encouraging business investment and helping to increase the number of people in work”.


The Strikes (Minimum Service Levels) Bill and the Retained EU Law (Revocation and Reform) Bill are in ‘Ping Pong’ at the moment, as the House of Commons voted to disagree with amendments added to the Bills in the House of Lords. The National Security Bill returns to the Commons with amendments next week, after Peers added measures relating to foreign interference in elections and the Intelligence and Security Committee’s Memorandum of Understanding with the Prime Minister.


The Online Safety Bill completed its committee stage in the House of Lords, with the report stage scheduled to begin on 6 July. The Government has agreed to ‘give coroners and bereaved families new powers to access information on their loved ones held by tech companies’ through the Bill.


The Financial Services and Markets Bill passed its third reading in the Lords, with it returning to the Commons with amendments. The Commons is due to consider amendments that would place restrictions on commercial activity related to forest risk commodities next Monday, which would add nature to the new regulatory principle on net zero emissions.


The Lifelong Learning (Higher Education Fee Limits) Bill completed its second reading in the Lords, with this Bill to ‘adapt the student finance framework, making different types of study more accessible and more flexible’.


The Non-Domestic Rating Bill also passed its second reading in the Lords, with this delivering changes to the business rates system, including to reduce the time between property revaluations, impose a duty on businesses to notify the Valuation Office Agency of changes that could affect a property’s rateable value, and introduce rates reliefs for improvements to property and heat networks.


The British Nationality (Regularisation of Past Practice) Bill completed its passage through Parliament, and it now awaits royal assent. It will retroactively change the law so that any children born in the UK between January 1983 and October 2000 to parents of EU/EEA or Swiss nationality are confirmed as British citizens.


The Economic Crime and Corporate Transparency Bill began its report stage in the House of Lords. The Bill seeks to prevent organised criminals, fraudsters, kleptocrats and terrorists from using companies to abuse the UK’s open economy; strengthen the UK’s broader response to economic crime; and support enterprise by enabling Companies House to deliver a better service.


The Northern Ireland Troubles (Legacy and Reconciliation) Bill also began its report stage in the Lords. It seeks to address the legacy of the Troubles in Northern Ireland through the creation of a new independent commission for reconciliation and information recovery (ICRIR).


The Infected Blood Inquiry and the BBC’s decision to reduce local news output from local radio journalism were the subject of this week’s Backbench Business debates in the House of Commons.


Love Island 💘🏝️


Week 3 in paradise and the chaos continues. New bombshell Scott entered the villa with his sights set on Catherine. He didn’t have long to wait to make his move, as a brutal public vote and islander decision saw both Andre and Charlotte dumped from the island, leaving Cat single. Cue all islanders moving mad and a week of fireworks as Scott and Catherine got to know each other, Molly and Zach did their thing, Sammy continued to pretend to like Jess, and Mitch… well Mitch cracked on with anything left, like a hyena fighting for scraps.


Ella and Ty got to spend a night in the hideaway, whilst cracks between Jess and Sammy turned into a gaping chasm as the full extent of his flirting with Leah became clear. Jess asked why she should “bite my nose to spite my face” (does someone want to tell her?) and opened the door to the intensathon that is Mitch’s advances; before the Rock the Boat challenge revealed some issues in Whitney and Mehdi’s “situationship”.


Just as it was all starting to settle down all hell broke lose as Jess and Sammy, and Mitch and Leah were awkwardly voted the least compatible couples by their fellow islanders and forced to split by the show’s real and only winner, host Maya Jama. New bombshells Mal and Montel entered to crack on with the newly single islanders, as Jess pinned her hopes on recoupling with Sammy, noting “absence makes the heart grow fonder”… something that’s arguably a little difficult in their 5 star Majorcan prison.


With the week drawing to a close and the islanders neatly recoupled, their peace is about to be shattered as (spoiler alert) 2016 Love Island finalist and new bombshell Kady McDermott is set to enter the villa this evening. Heads are about to be turned…


Committee Corridor 📜


The Corporate Governance Code is ‘not fit for purpose’, argues the Public Administration and Constitutional Affairs Committee in its latest report, recommending that the Code be updated or replaced ‘by the end of the year. The Code outlines the role of Non-Executive Directors in Government, with the Committee expressing concern at the ‘lack of consistency, accountability, and transparency’ around how they are appointed.


The Government needs to have an ‘overarching plan’ for its targets related to green energy, according to the Public Accounts Committee in the first report it published this week. Highlighting the Government’s aim of decarbonising the power sector by 2035, the Committee expressed scepticism that the plans to expand nuclear, solar and wind are ‘credible’, while remaining ‘unconvinced’ the private sector has ‘enough clarity to provide investment’.


There is an ‘unacceptably high’ backlog in the Local Government audit system, the Public Accounts Committee has warned in its second report, concluding that governance and financial issues are at risk of being identified too late. The Committee found that only 12% of Local Government bodies received audit opinions in time to publish their accounts for 2021-22, while predicting that the situation may deteriorate before it improves.


Action needs to be taken by regulators to address weaknesses in the ability of defined benefit pensions schemes to manage risk, says the Work and Pensions Committee in its latest report. The Committee identifies a ‘missed opportunity’ to improve resilience in the system, noting that a survey conducted by the Pensions Regulator previously had failed to look at small pension funds, which were the cause of financial instability after the Growth Plan.


Key Movements 🔁


David Warburton MP resigned as an MP, having sat as an Independent MP after he was suspended from the Conservative Party over allegations of harassment and drug-taking in 2022. The by-election for his Somerton and Frome constituency will take place on 20 July, alongside those in Uxbridge and South Ruislip and Selby and Ainsty.


Peter Grant MP announced he would not seek re-election, saying he was unsure whether he would “be able to cope with the physical and mental demands of the job” should he be re-elected.


Steve Brine MP also announced he would stand down at the next election, stating he felt it was time to consider a ‘new chapter’ in his life.


Susannah Storey has been appointed the new Permanent Secretary at the Department for Culture, Media and Sport (DCMS).


Ian Hogarth has been appointed the Chair of the AI Foundation Model Taskforce.


Mark McAllister has been reappointed Chair of the Office for Nuclear Regulation (ONR) for a further three years.


Michael Barber has been reappointed as adviser on skills policy delivery to the Chancellor and Education Secretary.


Martin Chown stepped down as CEO of Sellafield Ltd.


Elisabeth Davies has been appointed the National Chair of the Independent Monitoring Boards.


Baroness Hogg and Dame Susan Rice have been appointed non-executive members of the Office for Budget Responsibility (OBR).


Stephen Hitchen has been made Ambassador to the Republic of Iraq, while Peter Vowles has been appointed Ambassador to the Republic of Zimbabwe.


Steve Bagshaw has been appointed to support a review of Pro-Innovation Regulation of Advanced Manufacturing.


Kate Dodsworth has been appointed the Regulator of Social Housing’s first Chief of Regulatory Engagement.


Chris Quinn has been appointed the new Commissioner for Children and Young People for Northern Ireland.


Charles Banner has been appointed interim Chair of the Joint Nature Conservation Committee.


David Crundwell has been appointed to the Commission on Human Medicines.


This Week’s Polls 📊


Rishi Sunak’s ratings took a hit this week, with his net favourability rating failing to -34, according to YouGov’s latest poll. The polling company have put much of this down to his handling of the Privileges Committee report into Boris Johnson, with 57% of Brits believing Sunak handled this badly. In contrast, Keir Starmer currently sits on -14.


Support for countries providing refuge for those escaping war or persecution remains high, a poll undertaken in 29 countries by Ipsos for World Refugee Day has revealed, with three quarters of those surveyed supporting the principle of refuge. Whilst support has been less positive in some countries and waned in others, Great Britain has proved the exception, where support has risen and is higher than the global average.


Support for the Government’s commitment to Net Zero by 2050 is high, according to a YouGov poll this week which found 65% support the policy, with just 19% opposing; however when questions around the cost of living are thrown in, those surveyed overwhelmingly called on the Government to prioritise keeping the cost of living down.


Think-Tanking 💭


The Centre for Policy Studies published a report on the British public’s attitudes to six national priorities: freedom, fairness, security, equality, prosperity and opportunity, including noting that Britons overwhelmingly believe Britain is a free country, considering it the freest in the world.


The Resolution Foundation published a report on investment in the UK, concluding that corporation tax cuts and a return to policy stability, while important, will not be sufficient to bring about the new investment ecosystem that the UK needs.


RUSI published a report on the experience and perception of cybercrime and online harms in Georgia.


The International Institute for Strategic Studies published a report on cyber-security cooperation within the Association of Southeast Asian Nations (ASEAN) and how it might improve joint-response mechanisms through deeper political, technical and operational coordination.


Policy Exchange published a report on its new Placemaking Matrix, designed to help score the placemaking quality of proposed and existing developments which can be used when determining planning permission. The report includes a forward by Housing Secretary Michael Gove who has welcomed the new tool.


You’ve Got to Laugh 😂


With the Privileges Committee report vote on Monday, the Parliamentary sideshow on Boris Johnson’s antics, is (one can hope) drawing to a close. Whilst toned down, the debate did not disappoint, and so this week’s ‘Turkeys should be respected for their independence of thought and bipartisan nature and given a vote on whether to allow Christmas Award’ goes to Tory MP for Don Valley, Nick Fletcher for suggesting (cue awkward side glances by some of his colleagues) that only MPs from the same party of the person accused of wrongdoing should sit on the Committee determining the facts…


If you’re ever in need of good measured Chamber banter and a fast quip, you never need look too much farther than Jim Shannon MP. When uncharacteristically slow to get to his feet during Cabinet Office Questions on Thursday this week, he was gently probed by the Speaker whether he was going to ask his question, to which he quickly replied, “Am I standing? Does the Pope wear red socks? My goodness!” to great laughter in the chamber.


And finally, ever wanted to see Peter Bone MP do a silly dance on TikTok? No neither have we. Thanks Jeremy Vine…


We hope you enjoy the scorchio weather this weekend


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