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On the Hunt for Tax Cuts | K-pop to the Palace | Not a S***hole

Downing Street will be pretty pleased with how Jeremy Hunt’s big moment in the spotlight went this week, providing a much-needed 4 point boost for the party. Arguably there’s not much to celebrate for a party who still sit 19 points behind Labour, but compare that to the 13 point drop Kwasi Kwarteng’s mini-budget cost over a year ago… Maybe the PM will be spending the weekend reconsidering his reported plans to sack Jeremy Hunt next year…

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 - Autumn Statement Roundup 💼

Jeremy Hunt delivered what may be the Conservative Party’s last Autumn Statement for a while on Wednesday, if the polls are to be believed. Pitched by HM Treasury as ‘backing business and rewarding workers to get Britain growing’, through ‘110 growth measures’, his headline announcements included (deep breath…) increasing Universal Credit and other benefits by 6.7% in April in line with this September's inflation figure; increasing local housing allowance rates to the 30th percentile of local market rents; freezing alcohol duties until August 2024; extending the business rates discount for retail, hospitality and leisure sectors for a further year; increasing the National Living Wage by 9.8% to £11.44 an hour from April; reducing National Insurance from 12% to 10% from January; scrapping Class 2 National Insurance altogether and reducing Class 4 NI from 9% to 8%; increasing the State Pension by 8.5% in April; making full expensing of capital allowances permanent; introducing a new condition for companies bidding for large government contracts to pay suppliers within an average of 55 days (eventually 30 days); introducing a new simplified R&D tax relief combining the existing R&D expenditure credit and SME schemes; investing £4.5bn into strategic manufacturing sectors over five years to 2030; accepting all the recommendations from Lord Harrington’s review into Foreign Direct Investment in the UK; investing £50m in apprenticeship pilots in engineering and other sectors; allowing local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines; creating new Investment Zones in the West Midlands, East Midlands, Greater Manchester and Wales; and reiterating the Government’s commitment to NATO to spend 2% of GDP on Defence.

In a collective sigh of relief that the adults appear to be back in charge, business groups around the country generally welcomed the measures, particularly on the permanent extension of full capital expensing, cuts to National Insurance and measures on late payments.

Opposition parties, think tanks and trade union reaction was all entirely predictable and along party lines/political-leanings, with the IFS arguing the public finances haven’t been improved and questioning the decision to make tax cuts, the IPPR criticising the Chancellor for announcing ‘real-terms cuts to public investment’, the IEA calling it a ‘step in the right direction towards lower taxes and economic growth, not a leap’ and the Liz Truss-backed Growth Commission repeating its call for corporation tax cuts. The unions unilaterally panned the Statement calling it, ‘a plan for levelling the country down’, a ‘drop in the ocean’, a ‘desperate attempt to press the reset button’… none of which will come as a surprise as they ramp up campaigns to help elect a Labour Government next year.

For a full summary of all the key announcements, alongside a roundup of the publications and consultations launched to accompany the speech, key details from the Office for Budget Responsibility’s latest Economic and Fiscal Outlook, and reaction from political parties, business groups, think tanks and trade unions – view our full client briefing on our website.

Coming Up Next Week 📆

Hampton Court Palace plays host to the Global Investment Summit, which takes place on Monday. The focus of the Summit is on ‘Great British Ideas – Past, Present and Future’, with investment opportunities in sectors such as technology, sustainability, life sciences, advanced manufacturing and the creative industries. Over 200 of the world’s leading CEOs are due to attend.

The world’s first ever transatlantic 100% Sustainable Aviation Fuel flight is due to take place on Tuesday, with a Virgin Atlantic flight planning to go from London Heathrow to New York JFK.

Chancellor Jeremy Hunt appears in front of the Treasury Committee on Wednesday, where he will be asked questions on the Autumn Statement. Questions are likely to be focused on the impact of the measures on households and businesses across the UK, and on inflation, taxation and economic growth.

COP28 begins in the United Arab Emirates on Thursday, with the Climate Change Conference to last until 12 December. The four themes of main focus for the Conference are: technology and innovation, inclusion, frontline communities, and finance, with twelve topics in total to be covered over the Conference. From the UK, King Charles III, Prime Minister Rishi Sunak and Scotland’s First Minister Humza Yousaf have all confirmed their attendance, with the King to give the opening address of the Summit.

The Week in Stats 📉

0.7% – The UK’s forecasted growth in 2024.

2028 – The year in which real wages are expected to return to their 2008 level.

3.5% – The reduction in real household disposable income in 2024-25 compared to its pre-pandemic level, which the OBR calls ‘the largest reduction in real living standards since ONS records began in the 1950s’.

56 – The number of Conservative MPs who have publicly declared they will not stand at the next election.

867 – The current average number of assaults on shopworkers across the country every day.

745,000 – Net migration into the UK in 2022.

£94 – The increase in the typical annual household energy bill from January 2024.

50% – The proportion of Americans who believe multiple people were involved in a conspiracy to assassinate President Kennedy (in polling released to mark the 60th anniversary of his assassination).

Other Political News 📰

The Global Food Security Summit took place in London, where Prime Minister Rishi Sunak stepped away from Autumn Statement prep to open the summit and announce that the Government would be providing £16m to the Child Nutrition Fund and applying AI to prevent food security crises, claiming that the UK’s work with Somalia helped them avert famine last year. He also used the opportunity to announce the Government’s White Paper that sets out the UK’s ambitious long-term plan to end extreme poverty and tackle climate change. The paper was welcomed by familiar names like Bill Gates and World Bank President Ajay Banga.

‘Growth, growth, growth’ was the main topic in a speech delivered by the Prime Minister to a college in north London, where he listed out five long term decisions the Government aims to focus on to grow the economy. The first is to reduce debt in order to reduce inflation and get mortgage rates down, followed by the decision to “cut tax and reward hard work”, which was a sentiment echoed in the Autumn Statement. He then focused specifically on the Government’s goal to build domestic sustainable energy, claiming that the transition to net-zero would create a whole sector and thousands of “good, well-paid jobs”. His fourth decision was to back British business to invest, innovate and trade, and finally the last decision was to deliver ‘world class’ education.

This week marked the King’s first state visit since the Coronation and included Presidents, Princesses, and… Pop Stars? Joining South Korean President Yoon Suk Yeol and First Lady Kim Keon Hee at Buckingham Palace was none other than K-pop group BLACKPINK, who were presented Honorary MBEs to recognise their role as COP26 Advocates. The state visit also led to a new UK-South Korean strategic cyber partnership and launched negotiations on an “upgraded” Free Trade Agreement.

Round three of Levelling Up funding was announced earlier this week, with £1bn to go towards 55 projects across the UK, kind of. Notably, Northern Ireland received no funding at all, with the UK Government citing an ‘absence of a working Executive and Assembly’, to which the DUP’s Sammy Wilson MP called “economic blackmail”. Meanwhile, the SNP has accused the Government of ‘abusing’ the funding as a way to gain seats, pointing out that 3 of 6 Conservative constituencies north of the border received funding, while other seats ‘in areas facing real social challenges’ lost out. Meanwhile in England, the North West is set to receive £128 million, the North East £59 million, Yorkshire and the Humber £169 million and the Midlands £171 million in total.

Around the World 🌍

A ceasefire between Israel and Hamas was agreed, mediated by Qatar. Under the agreement, the ceasefire began at 7am this morning, will last 4 days, and will see the release of 50 hostages. Amid the relative peace, reports emerged this morning that Palestinians have been shot as they attempted to move to North Gaza, something which the IDF said was not allowed during the ceasefire.

Taiwan’s pro-China opposition parties turned their back on proposed unity and registered as separate candidates in the January election, not long after they announced they will work together. The coalition was announced to campaign for creating a better relationship with China, though no progress on finding a shared candidate was made. The move will likely make it easier for the governing Democratic Progressive Party to be victorious in upcoming elections.  

Albania’s opposition party set off smoke bombs and flares in Parliament, protesting a vote on the 2024 budget. The party has been frustrated with what they call an increasingly authoritarian rule by the governing socialists. The protesting came to no avail however, as bodyguards kept rioting away from the Cabinet and the socialist majority party quickly voted on the budget and closed the session within 5 minutes.

It’s been a big week for elections this week, beginning with Argentina, as far right congressman Javier Milei defeated Economy Minister Segio Massa, with a margin of about 12 percent. Milei has promised ‘drastic changes’ to improve the country’s ‘tragic reality’’, as the country’s inflation rate remains at 143%. Trump and Bolsonaro were among the celebrators at Milei’s victory, as the two prepare for their election campaigns in 2024 and 2026 respectively.

Staying on the right, Geert Wilders took victory in the Netherlands on Wednesday. Wilders Party, the PVV, took the most seats in the Election, and in their campaign promised for: a referendum on leaving the EU; withdrawing the Netherlands from climate agreements; a crack down on immigration; banning the Quran and mosques and stopping aid to Ukraine. However, in absence of a clear majority, Wilders is now challenged with finding a coalition, meaning some of the pledges will likely be off the table.

Joseph Boakai won the elections in Liberia, beating outgoing President George Weah. Following the results, an incident in the capital saw 28 injured as a vehicle charged into supporters of the president-elect, a move that has been described by the police as an accident, but by Boakai as an act of terror.

Results in the Madagascan elections are still yet to be confirmed, as President Rajoelina has taken a lead in the count. However, claims of bribery in the election are rising, as supporters of the President are claiming they are owed money for their vote. Rajoelina is denying any allegations.

Highlights from Parliament 🏛

The Autumn Statement took place on Wednesday, and debate on its contents took over the House of Commons agenda for the remainder of the week. But here’s what else happened in Parliament:

OPQs continued, with Defence, Justice, Northern Ireland and Cabinet Office Questions in the House of Commons. The Deputy Prime Minister and the Speaker of the House were asked if they are working “to find a way for elected members of this House to scrutinise the Foreign Secretary directly”; meanwhile, the Defence Secretary asserted that the UK’s support for Ukraine was “forever”. Most of the drama came, however, during PMQs, when the new Home Secretary James Cleverly was accused of calling Stockton a s***hole following a question about child poverty in the town. He has since denied calling Stockton a s***hole, instead admitting to calling the MP who asked the question (Alex Cunningham) a s*** MP… apparently that makes it better!!

Results of round 3 of the Levelling Up Fund were announced, with 55 local projects securing a share of nearly £1 billion. West Yorkshire was announced as England’s third Investment Zone, focusing on life sciences, with the Government confirming that the Investment Zones programme will be extended from 5 to 10 years. MPs and Peers debated these announcements, on Monday and Wednesday respectively, with many expressing their disappointment over areas which missed out on the funding alongside criticism of cuts to local authorities.

The International Development White Paper was published, setting out the UK’s plan to accelerate progress towards eliminating extreme poverty, and addressing climate change and biodiversity loss. The contents of the Paper were debated in the Commons on Tuesday and in the Lords on Thursday.

The Digital Markets, Competition and Consumers Bill had its third reading and passed in the Commons on Monday. According to Business Minister Kevin Hollinrake, the Bill will “establish new effective tools to address the unique barriers to competition in digital markets” with the CMA granted new powers, and will help the UK technology industry grow, delivering “tangible benefits” to British consumers and businesses.

The Media Bill had its second reading in the Commons, whilst the Investigatory Powers (Amendment) Bill, the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill, and the Pedicabs (London) Bill also had their second readings in the House of Lords.

The Lords introduced a flurry of new Bills: the Conversion Therapy Prohibition (Sexual Orientation and Gender Identity) Bill, the Succession to Peerages and Baronetcies Bill, the Arbitration Bill, the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill, the Housing Act 1998 (Amendment) Bill, the Alternative Investment Fund Designation Bill, the Artificial Intelligence (Regulation) Bill, the Genocide (Prevention and Response) Bill, and the Workforce Information (Ethnicity) Bill, which all had their first readings this week.

Committee Corridor 📜

The UK Government needs to urgently create an attractive environment for electric vehicle battery production in the UK, according to a report by the Business and Trade Committee. The report warns that the UK faces a huge ‘gigafactory gap’, with less battery production capacity than needed for the nation’s future needs. If not addressed, the report says this could see automotive production in the UK decline, potentially putting hundreds of thousands of associated jobs at risk.

The local audit crisis is hampering efforts to ensure the billions of pounds spent by councils each year is accounted for, so warns a report by the Levelling Up, Housing and Communities Committee. The report states that the most urgent problem is a ‘large and growing’ backlog of accounts whose audits have not been completed, some of them up to seven years old. The report calls for the Department for Levelling Up, Housing and Communities to move quickly to clear the audit backlog and implement its proposed actions by the end of the calendar year.

Improving the public’s understanding of parliamentary procedure is the focus of a new report by the Administration Committee. It makes several recommendations including the need for an overarching strategy, developed and delivered by the House Administration, that promotes the institution of Parliament and its democratic proceedings; capitalise on the networks and reach of MPs, equipping them with the tools to explain how Parliament works; and develop flagship video content, helping the public to understand more about the procedure which binds Parliament.

HMRC has lost sight of needing to put customers at the heart of changes to the tax system, argues the Public Accounts Committee in their latest report. The report warns that with the Making Tax Digital (MTD) programme, which aims to make it easier for people to get their tax right, HMRC is increasing the burdens imposed on some taxpayers. The report also finds that, in seeking further investment in MTD, HMRC has not been open enough about the substantial costs that many taxpayers will face.  

Key Movements 🔁

The Department for Science, Innovation and Technology confirmed the portfolios of Andrew Griffith MP as the Minister for Science, Research and Innovation; and Saqib Bhatti MP as Minister for Tech and the Digital Economy.

Bob Stewart MP announced he will step down at the next election after being convicted of a racially aggravated public order offence. The former Tory MP currently sits as an independent.

James Duddridge MP also announced that he will not be seeking re-election at the next election.  

Lord Johnson of Lainston has been appointed as the Minister for Regulatory Reform in addition to his role as the Minister for the Investment.

Greg Hands MP was confirmed as Minister for Trade Policy – a role he previously held between 2020 and 2021.

Lieutenant General Doug Chalmers has been announced as the Government’s preferred candidate for the role of Chair of the Committee on Standards in Public Life.

Steph Roberts-Bibby has been appointed as the permanent CEO of the Youth Justice Board.

This Week’s Polls 📊

The Autumn Statement’s headline announcements were generally well-received, according to YouGov’s polling. 85% of people supported increasing the minimum wage, while 64% welcomed the reduction in National Insurance. 78% supported increasing the state pension in line with wages and 64% supported increasing benefits in line with inflation. On the other hand, 47% of respondents said that freezing alcohol duty was the wrong priority.

Only 11% of people think David Cameron achieved a significant amount as PM, according to Redfield and Wilton’s survey. 19% of people said he had achieved ‘nothing at all’; 28% thought he had achieved a ‘sight amount’; and 21% said a ‘fair amount’. The survey also found that Brexit, austerity and the Scottish independence referendum were the top three events that voters associated him with.

Labour has a 19 point lead over the Conservative Party, three points higher than a week ago. Redfield and Wilton’s poll also found that only 51% of those who voted Conservative in 2019 said they would vote Conservative again.

Britons are concerned about the cost of Christmas. Ipsos’ poll found that 44% of people are worried about how much the festive season will cost (up from 31% in 2020), although 70% said they were still looking forward to it.

Think-Tanking 💭

The Institute for Fiscal Studies published a report which found that housing costs take up ‘three-and-a-half times as much of the budgets of the poor as of the rich’, with the poorest quarter of the population spending 21% of their income on housing costs, compared to 6% for the richest quarter. The IFS concludes that it is ‘not possible to understand income poverty or inequality without taking account of housing costs.’

The IPPR released a paper on schooling this week, which advocated for a shift in the ‘drivers of better schooling’, with a move away from top-down accountability to one where both schools and teachers are encouraged and incentivised to innovate and improve.

The IPPR also released a paper this week on industrial policy, citing how both the USA and the EU had introduced plans in the area that show it is ‘back in vogue’. It urged policymakers to implement a ‘green industrial strategy’, with this needing both expanded Government capabilities and also ‘clear expectations and accountability for both the private and public sector.’

The Institute of Economic Affairs published a report which called for a greater use of outsourcing in national defence, as it could ‘encourage efficiency, innovation and better services and equipment for military personnel’. It noted that the outsourcing of functions such as housing, maintenance, training and weapons procurement reduced costs by 5-40%.

The Henry Jackson Society released a paper that highlighted concerns about Chinese Students and Scholars Associations (CSSAs) in the UK, asserting their ties to the Chinese Government, and potential influence activities. The HJS recommended increased scrutiny and Government guidance on whether they ‘fall under the requirement for registration under the newly created Foreign Influence Registration Scheme.’

Reform published a report that discussed the urgent issue of antimicrobial resistance (AMR) and emphasised the need for advanced technological solutions, particularly AI, in prescribing antibiotics smarter to combat the "silent pandemic" and support the UK's health security.

You’ve Got to Laugh 😂

Budgets, Autumn Statements and other big set piece parliamentary events often lead our politicians into a false sense of security, with many speech writers over the years thinking they’re temporarily writing for their bosses big gig at the Clapham Grand, not the dispatch box… So credit where credit’s due this week, with Jeremy Hunt showing a certain level of restraint and degree of subtlety we’ve not seen for a few years when stepping up for his big moment on Wednesday. Top of the laughs were his lines suggesting Shadow Chancellor Rachel Reeves should have just copied and pasted his conference speech (in reference to her recent admission passages of her new book had been copied from Wikipedia), and his quip that his home county of Surrey can’t get everything right – after pointing out Keir Starmer was born there – which even got a laugh from the Labour leader himself.

On a related note… not so much you’ve got to laugh as a note on Whitehall procedure… there’s been a lot of chatter in the press and on social media that the Treasury removed a line on migration from the official transcript of the Chancellor’s speech after it happened. Whilst the Treasury haven’t made it easy for themselves by stating the transcript published is ‘exactly as it was delivered’, it’s long been convention for the Civil Service to remove ‘political’ sections of the speech from the transcript (such as Hunt’s ‘copy and paste’ line and his attack on Labour that they ‘hanker after a more liberal immigration regime’. The official transcript from the Treasury used to include notes to state where redactions had been made due to ‘political content’… however by no longer including this and stating the transcript is ‘exactly as it was delivered’, they’re really not helping themselves...


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