Average UK household £8,800 a year worse off than those in France or Germany

The UK’s failure to get serious about inequality and weak growth over the past 15 years has left the average British household £8,800 poorer than its equivalent in five comparable countries, research has found.

Owl thought our Local Enterprise Partnership had cracked the problem of productivity growth and, along with its local business partners, were assuring us of sunny uplands.

Are there any grownups running our economy?

Larry Elliott www.theguardian.com 

A “toxic combination” of poor productivity and a failure to narrow the divide between rich and poor had resulted in a widening prosperity gap with France, Germany, Australia, Canada and the Netherlands, the report from the Resolution Foundation said.

The thinktank said that if the UK matched the average income and inequality levels of those countries, typical household incomes in Britain would be a third higher and those of the poorest households two-fifths greater.

Its chief executive, Torsten Bell, said: “Britain is a rich country, with huge economic and cultural strengths. But those strengths are not being built on with the recent record of low growth leaving Britain trailing behind its peers.

“This forms a toxic combination with the UK’s high inequality, leaving low- and middle-income households far poorer than their counterparts in similar countries.

“We must turn this around, but we are not on track to do so. We underestimate the scale of our relative decline and are far from serious about the nature of our economy or the scale of change required to make a difference. This has to change.”

The foundation’s report – Stagnation Nation – coincided with calls from the Confederation of British Industry (CBI) and the Treasury select committee for the government to produce a coherent growth strategy.

In an open letter to ministers, the CBI director general, Tony Danker, took a sideswipe at the tax-cut bidding war being conducted by the Tory party contenders to replace Boris Johnson, urging the candidates to show how growth policy was “about more than this”.

The overriding objective of tax policy currently should be to boost business investment, the business lobby group added. “Growth that relies on only government or household consumption is doomed to fail, especially at a time of rising inflation and high debt.”

Danker said the economy could be boosted by £700bn over the coming decade provided the government developed “serious, credible and bold” policies for growth.

“There are prizes on offer through decarbonisation, innovation, trade, thriving regions, labour and health. And those prizes can be realised if government pulls on four key growth levers: smart taxation to unlock investment; building a workforce for the future; delivering catalytic public investment; and making markets to outcompete the world.”

Meanwhile, the cross-party Treasury committee expressed concern at the “chop and change” in the government’s economic approach, warning of a risk of fragmentation and a lack of long-term thinking after the abolition of its industrial strategy and replacement with the plan for growth. It was not clear how the plan for growth was an improvement on its predecessor, the report said.

Mel Stride, the committee’s chair, said: “We have a new chancellor and shortly will have a new prime minister. Getting a grip on productivity will be key to kickstarting economic growth and stimulating greater business investment in the UK. The evidence that we received suggests there needs to be greater stability and long-term certainty in government policymaking.”

The Resolution Foundation said the UK had closed the productivity gap with France and Germany in the 1990s and the first half of the 2000s, but since then the gap had widened from 6% to 16% – the equivalent of £3,700 per person.

While the top 10% of households in Britain were richer than those in many other European countries, middle-income British households were 9% poorer than their counterparts in France, while the poorest fifth of households in Britain were more than 20% poorer than their French and German equivalents.

Meanwhile, the latest monthly barometer of confidence from YouGov and the Centre for Economic and Business Research shows that weak growth and rising inflation in recent months have led to a seventh successive decline in consumer confidence.

Have the dirty tricks, skulduggery and in-fighting commenced?

Background: A survey of the Tory party membership from the Conservative Home website has shown that Sunak would comfortably win in a run-off against Hunt, but would struggle against many of the other candidates including Truss, Kemi Badenoch and Penny Mordaunt.

‘It’s a stitch up!’ Nadine Dorries rages at Rishi ‘dark arts’ to secure PM win

Rishi Sunak faces two major opponents in battle to PM

Cally Brooks www.express.co.uk 

Writing on Twitter, the Secretary of State for DCMS wrote: “This is dirty tricks/a stitch up/dark arts. Take your pick. Team Rishi want the candidate they know they can definitely beat in the final two and that is @Jeremy_Hunt. It was in response to a Tweet by Commentator Dan Hodges who revealed he was told Gavin Williamson, who is on Rishi Sunak’s team, organised a “syphoning off of some votes” to help Jeremy Hunt get to the election.

He wrote: “One rival camp tells me Gavin Willamson (who is on Team Rishi) has organised syphoning off of some votes to let Jeremy Hunt get over the threshold.”

Nadine Dorries is a member of the Conservative Party and has served as Secretary of State for Digital, Culture, Media and Sport since 2021.

It comes as the first eight leadership candidates to get through to the first round of voting have been revealed.

Kemi Badenoch, Suella Braverman, Jeremy Hunt, Penny Mordaunt, Rishi Sunak, Liz Truss, Tom Tugendhat and Nadhikm Zahawi have made it through.

Sajid Javid and Rehman Christi withdrew from the content minutes before the deadline.

But some have denied the accusations, with Sky News’ Political Editor Beth Rigby claiming sources have told her it is “complete nonsense”.

She wrote on Twitter: “Update on the Williamson/Hunt story doing rounds. Source close to Sunak campaign tells me its ‘complete nonsense.

“Mel Stride running the whipping op & that behaviour isn’t happening. It’s a dirty story being spread by anti-Rishi people’.”

It comes after Rigby challenged Rishi Sunak over his suitability to lead the country as she pointed out he shares several flaws with Boris Johnson.

The Sky News chief editor questioned Rishi Sunak about his record as she noted the former Chancellor had been building his campaign to succeed Boris Johnson on the need for change within the party.

Beth Rigby noted Mr Sunak had also been handed a fine after he was found to have breached lockdown rules by attending a gathering at a time when groups could not meet. She also noted he is currently seen as a “corrosive” figure because of his fiscal policies, questioning his chances of securing the leadership of both the party and the country.

Ms Rigby said: “You’ve just stood here and said Boris Johnson is a remarkable person, you don’t want history to demonise him.

“But the fact is, the party just ousted him on the basis of conduct, probity, and causing division. And here you are, and I have to put it to you that you have a police fine over Partygate.”

Rigby added: “And there have been questions too over your very wealthy family avoiding paying millions of pounds in tax due to your wife being a non-dom taxpayer.

“I know that has changed very recently. And I have to say you’re an utterly corrosive figure in the parliamentary party for a big chunk of it. There are many in the party who do not want you to be Prime Minister.”

The former Chancellor said: “I think it’s important, whoever wins this election does restore trust because trust has been broken. We need to rebuild all that with the country. It’s something I’m keen to do as leader.

“I think I can do that, and I think it’s about the conduct of Government, which is important. And you can expect that’s the kind of leadership I will provide.”

 

Porky Markets

This leadership campaign reveals the ideological narrowness of the Conservative Party

Editorial www.independent.co.uk 

A leadership election campaign ought to be a good chance for potential prime ministers to set out how they would deliver the kind of government that the people want. Instead, we have had a parade of leading lights offering fantasy tax cuts, and one candidate who seems to be running on a ticket to abolish unisex toilets.

What is the No 1 priority of the British people? It is the cost of living. And what do the candidates have to offer them? Unfunded tax cuts, mainly. Cuts to national insurance contributions, income tax, fuel duty, and even corporation tax. And none of them spelling out credible spending cuts to pay for these things, implying higher borrowing at a time when interest rates are rising, meaning it would pile on costs to be paid by future generations.

To his credit, Rishi Sunak, the recent chancellor, set the terms of the election by pre-emptively attacking “fairytales” about the economy. This does seem to have forced at least one candidate, Penny Mordaunt, to rein in the impossible promises and to agree that lower taxes are only prudent when the public finances are sustainable.

But the tone has been set by Jacob Rees-Mogg, who is now backing Liz Truss, in condemning Mr Sunak as a “socialist” chancellor for belatedly doing the right thing and using the benefits system to protect vulnerable households from the rise in energy bills.

The overall impression is of a party that would prioritise tax cuts, which by definition help the better off (those who pay taxes), over broad-based help for people on low incomes.

What else do the British people care about? The National Health Service. The coronavirus backlogs and the dangerous delays in ambulance call-outs. And what do the Tory candidates have to say about that? The only candidate who seems to have taken the NHS issue seriously is the recent chancellor. His allies criticised Boris Johnson in the weekend press for failing to set up regular meetings, led by the prime minister, to oversee the backlog programme. This kind of Blairite public-service-reform focus is the only way to ensure that the full weight of the government machine is devoted to identifying the bottlenecks and clearing them.

The people’s priorities include the housing crisis. Only one candidate has mentioned it – Sajid Javid, though he has since stood down from the race. People are worried about crime. That has been the subject of familiar sloganising, but no new thinking. And people are also concerned about the arrival of small boats across the Channel, while being uneasy about the Rwanda scheme proposed by Priti Patel, the home secretary, as her main response to that problem. So far, all the candidates have backed the scheme – while the scheme itself has been suspended until the new prime minister takes office at the beginning of September.

The other huge issue with which the British people expect their leaders to engage is the climate emergency – coincidentally underlined by the current unusual heatwave. On this, the centre of gravity of the Conservative Party seems to be moving away from the people. Kemi Badenoch, the biggest surprise candidate of this race, described the target of net zero carbon as “economic disarmament”. While other candidates have not gone that far, the tone of the debate is all about “realism”, which is code for backsliding.

There is time for some of the candidates to prove us wrong, but the early stage of this contest has exposed the gulf between the Conservative Party’s deepest instincts and the people’s priorities. A leadership election ought to be a chance for a party to showcase its best talents. So far, it has shone an unforgiving light on the party’s true nature.

Conservatives abstain as council declares cost of living emergency

A second Somerset council has called on the government to urgently address the cost of living crisis – though Conservative councillors abstained from the final vote.

Daniel Mumby www.somersetlive.co.uk 

Somerset West and Taunton Council became the second local authority in Somerset to pass a formal motion urging government action on the cost of living, following a similar vote by Mendip District Council in late May. In a full council debate held in Taunton on Tuesday evening (July 5), councillors from all parties spoke out about the pressures being placed on working families, urging action on energy bills, universal credit and fuel duty.

However, members of the Conservative opposition group abstained from the final vote, with their leader stating the motion was “overtly politicised” and the debate was a “missed opportunity” to find common ground. The motion called for a cut in the standard rate of VAT from 20 per cent to 17.5 per cent, restoring the universal credit supplement of £20, and reinstating the pension triple lock (whereby pensions rise in value by either average earnings, inflation or 2.5 per cent a year – whichever is higher).

It also called for the government to cut fuel duty in rural areas and to uncouple power prices from gas prices (which would enable a drop in household electricity bills). Like Mendip‘s declaration in May, the council also committed to staging a “cost of living emergency summit” with Citizens Advice, food banks, trade unions, chambers of commerce and the district’s two MPs – Ian Liddell-Grainger (Bridgwater and West Somerset) and Rebecca Pow (Taunton Deane – and until recently a Defra minister).

The council has also committed to creating a £50,000 support fund for those residents most affected by rising food and energy prices, which will be administrated alongside Citizens Advice by the end of the summer. Councillor Chris Booth, portfolio holder for communities, introduced the motion by stating: “We are all aware of the difficult times that our residents are going through, and it’s now the time to show that we want to do more than we already are.

“We urgently need more of this government as the shadow of hardship consumes more of us.” Councillor Benet Allen, portfolio holder for communications and corporate resources, said he was “dismayed” that the government had dithered over restoring the £20 uplift in universal credit.

He said: “The cost of living crisis is real, it affects many of us, and I’m dismayed that the government has avoided doing the one, simple, affordable thing that it could do to put money in the pockets of those who need it most – which is to restore the £20 on universal credit. They’ve done lots of other things, most of which are headline-chasing.

“I believe that this government for political reasons has avoided doing anything along the lines of putting money back into the pockets of the very poorest. We are overtaxed on our use of electricity because our electricity bills are directly connected to our gas bills. Very little of our electricity is generated by gas.

“The cost of renewable energy has plummeted in recent months – we are actually all overpaying for electricity by a factor of two or three.” Councillor Libby Lisgo, who leads the Labour opposition group, joked that the council would struggle to find a minister to whom these concerns could be addressed in light of the copious resignations from Boris Johnson‘s administration.

She said: “The way that the government is almost, it would seem, wilfully ignoring the needs of the people who most need support probably ought to beggar more belief than it does. The way they’re falling tonight [July 5] suggests that [finding a secretary of state] might be easier said than done.”

Councillor Dave Mansell – one of two Green Party councillors – added: “The motion focusses on short-term solutions, and those are definitely needed and important. I would like to add that long-term solutions are needed too, particularly for our energy security.

“The government has stopped us investing in the lowest-cost energy source, which is on-shore wind power. that is contributing to a situation which we now face, and that urgently needs to change.” The motion was passed by a substantial margin, though all the Conservatives present in the chamber abstained – and two members of the party left the chamber before the vote took place.

Councillor Roger Habgood, who leads the Conservative group on the council, said after the debate that he and his party were in support of action to address the cost of living but believed the motion was the wrong way to go about this. He said: “Unfortunately the cost of living motion to full council was deliberately set out taking an overtly politicised position by the local Lib Dems.

“The cost of living increases in our economy are of course concerning to us all, and if Mr Booth and the Lib Dem leader had taken a few minutes to construct the motion collaboratively, it could have received unanimous support. Sadly that approach and option was not chosen and an opportunity has been lost.

“Continuously blurring the lines of responsibility between the district, county and unitary councils and the national government is unhelpful. Our councillors are best placed to focus our attention on reducing costs and improving services under our direct control, rather than being distracted by matters outside of their control.

“Of course we should engage with Westminster. We have two MPs who represent us – after all that is how the latest cost of living payments for eight million families coming into effect from July 14 was formulated.

“My colleagues and I continue to focus on what we can do for residents as local councillors in these challenging times.”

Comedian Michael Spicer roasts outgoing PM’s speech in ‘immensely satisfying’ video

At one point, Spicer calls Johnson a “fart pipe” and gives Johnson’s wife, Carrie, the nickname “Wallpaper Wendy” in reference to the £840-per-roll wallpaper the couple bought for their flat renovation.

(Read the intro then watch the video below, or just watch and enjoy! – Owl) 

Ellie Harrison www.independent.co.uk

Comedian Michael Spicer has been praised for his video roasting Boris Johnson’s resignation speech.

Last week, Johnson announced he would step down as prime minister following an onslaught of resignations in protest over his leadership.

Spicer – whose sketches often see him impersonating a fictional, frustrated Johnson aide working in a side-room – shared a video on Tuesday (12 July) mocking the speech.

“Remember it’s time to be humble,” he can be seen telling the outgoing prime minister. “And, just to be on the safe side, I’ve written down the definition of humble and emailed it to you under the subject heading: ‘You have well and truly f***ed everything up.’”

He suggests that Johnson apologise for “partying every single Friday while telling us at the same time we couldn’t sit on a park bench with our nans”.

When Johnson says in his speech that he is proud he “got Brexit done”, Spicer cuts in with: “It’s not done, it’s a mountain of burning tyres that threatens the Good Friday Agreement.”

When Johnson talks about how he got the country through the Covid pandemic, Spicer says: “180,000 people died but, yes, let’s claim it as a triumph, why not? I mean, literally nothing you say matters any more.”

At one point, Spicer calls Johnson a “fart pipe” and gives Johnson’s wife, Carrie, the nickname “Wallpaper Wendy” in reference to the £840-per-roll wallpaper the couple bought for their flat renovation.

Getting increasingly irate, he demands that the prime minister apologise. “Dig right down into that poisonous soul of yours and try to find one apology,” he says.

The video ends with Spicer holding his head in his hands in total despair.

Broadcaster and author Fern Britton was among those to praise the clip. “Totally brilliant and factually correct,” she tweeted. “He is a fart pipe.”

“‘Wallpaper Wendy’ had me snorting water out of my nose,” added another.

A third wrote: “Another slice of perfection. Thank you.”

A fourth said: “You’re the only way I can watch these speeches.”

“Immensely satisfying,” posted a fifth.

A sixth person simply wrote: “Thank you YOU ABSOLUTE BLOODY BEAUTY!”