‘Return to austerity’: Almost £50bn of cuts needed to fund tax breaks for rich, economists warn

Liz Truss’s government is on course to make public spending cuts of almost £50bn a year after the “unenforced error” of Kwasi Kwarteng’s mini-Budget, according to top economists.

Adam Forrest www.independent.co.uk

Experts at the Resolution Foundation warned that Britain’s public sector was heading for a return to the austerity period imposed by the David Cameron-led Tory government.

If Ms Truss refuses to U-turn on her borrowing-fuelled splurge on tax cuts, the level of spending cuts will have to be “broadly the same or bigger” than then-chancellor George Osborne set out in 2010 after the banking crash, the think tank said.

The government is likely to need to announce fiscal tightening of between £37 and £47bn a year in order to meet a commitment to get debt falling by 2026-27, the Resolution Foundation warned.

Ms Truss confirmed on Thursday that she and her ministers are now looking for cuts across government – declaring that there are “plenty of areas” where taxpayers’ money could be saved.

“There are always ways that we can organise things more efficiently. What I want to make sure is that taxpayer money is focused on frontline services,” the prime minister told broadcasters.

Whitehall sources told The Independent that the Treasury had written to all departments asking them to find savings. Asked about the efficiency drive, a spokesperson said: “The British taxpayer expects government to run as efficiently and effectively as possible.”

The prospect of austerity has sparked anger among unions and campaigners, who warned the cuts to pay and services would be “an act of national vandalism and a huge betrayal of the British people”.

A group of 18 trade unions wrote to the PM demanding a “cast iron assurance” she would honour a Tory leadership campaign pledge that there would be no cuts to public services, already struggling with the impact of inflation.

“Frontline services are already at breaking point. They must not be sacrificed to make the top 1 per cent even richer,” said the letter signed by the TUC’s Frances O’Grady, Unite’s Sharon Graham and others. “We won’t allow the social fabric of this country to be destroyed.”

Mr Kwarteng has promised a “medium-term” fiscal plan on 23 November to spell out how he will balance the nation’s finances and a £45bn-a-year tax giveaway disproportionately benefiting the rich.

The Resolution Foundation said the market turmoil which has seen traders dumping government bonds had increased the UK’s debt interest costs by around £12.5bn a year by 2026-27.

Torsten Bell, the think tank’s chief executive, said the huge package of tax cuts “without any explanation of how they would be paid for” was the “biggest unforced economic policy error of my lifetime”.

Warning of “unpleasant” cuts ahead, the top economist added: “The intention may have been to emulate Margaret Thatcher – but the reality may involve looking a lot like George Osborne in the years ahead.”

The Resolution Foundation suggested that the “painful” policy choices that the Treasury would now have to consider include cutting public investment projects and abandoning the pledge to increase defence spending to 3 per cent of GDP by 2030.

The think tank said the government could consider uprating benefits and pensions by earnings instead of inflation – a 4 per cent real-terms cut. This would save £20bn over two years, but would cost a typical low-income family with two children over £1,000 a year.

NHS Providers have warned that cuts to the health service would represent a “huge setback” to a service already stretched by a decade of austerity. “NHS budgets are already severely stretched,” Miriam Deakin of the trusts’ membership body told The Independent.

Unison general secretary Christina McAnea said the prospect of NHS budget cuts was “terrifying” and would exacerbate the existing “exodus” of staff leaving after the Covid crisis.

School leaders also reacted with alarm to the prospect of a return to austerity. Paul Whiteman, general secretary of school leaders’ union NAHT, told The Independent: “An economic policy of further cuts to public services at this point would be disastrous.”

Treasury minister Chris Philp said government departments have been asked to stick to existing spending limits during the current three-year settlement – as well as being asked to make efficiency savings.

However, Mr Philp argued on BBC Radio 4’s Today programme that “iron discipline” on public spending would not necessarily lead to austerity.

“If we can get economic growth going, which is our intention, it will lead to wages going up and lead to new and better jobs being created and will ultimately pay the taxes that fund public services like health, the NHS and so on,” he said.

Mr Philp suggested the government may not hike benefits in line with inflation in April 2023 as promised, while Mr Kwarteng said it was “premature for me to come to a decision on that”.

Charities warned that U-turning on a commitment to increase benefits in line with inflation would lead to disabled people “starving and freezing in their own homes”.

The Child Poverty Action Group said “unless benefits are uprated to match inflation, [children] will also become the casualties of a collapsing economy”.

Liz Truss to meet head of UK’s independent fiscal watchdog after market meltdown

Prime minister Liz Truss and chancellor Kwasi Kwarteng will meet the head of Britain’s independent fiscal watchdog today following a market meltdown triggered by the mini-budget.

Alisha Rahaman Sarkar www.independent.co.uk

In an unusual move, Ms Truss and chancellor Kwarteng will meet the chairman of the Office for Budget Responsibility (OBR) Richard Hughes to discuss the economic and fiscal developments.

Mr Kwarteng unveiled a string of tax cuts last week in a fiscal statement that was not accompanied by OBR forecasts. The forecaster said it had offered to prepare a draft for the new chancellor in time for the mini-budget but it was not taken up.

Now, a group of lawmakers have reportedly called for the forecast to be released immediately.

The chancellor has insisted that he is “sticking with” his mini-budget, despite it spooking markets and forcing an emergency Bank of England intervention.

Meanwhile, Tory MP Sir Charles Walker said the Conservative Party faces an existential threat after Labour surged to a 33-point lead in one poll.

He suggested the Conservatives would “cease to exist as a political party” if the 33-point lead is repeated at a general election.

Latest Opinion Polls 

Conservatives currently tanking

www.politics.co.uk (Extracts)

The Result Of A General Election Today

In the first three weeks of the Liz Truss premiership, the Labour lead over the Conservatives has grown considerably and is now trending at 11.2%.  This 11.2% average lead relates to a period before Chancellor Kwarsi Kwarteng’s ‘mini budget’ on September 23 had a chance to feed into the opinion poll numbers.

Polling averages extrapolated in the three weeks running up to 27 September place Labour on 42.7%, the Conservatives on 31.5%, and the Liberal Democrats on 11.2%.

If a General Election was held today, and the public vote reflected that average polling position, this would likely lead to the following composition of the House of Commons:

The result of a general election is projected as a hung parliament with Labour as the largest party. but some 8 seats short of an outright majority. 

Latest Polls

YouGov (25 September) which placed Labour on 45%, the Conservatives on 28%, and the Liberal Democrts on 9%.

Redfield and Winton (25 September) which placed Labour on 44%, the Conservatives on 31%, and the Liberal Democrts on 11%.

Ipsos (22 September) which placed Labour on 40%, the Conservatives on 30%, and the Liberal Democrts on 13%.

Public Opinion since the 2019 General Election

In the aftermath of the 2019 General Election, the Conservative party enjoyed a healthy lead in the opinion polls. With the Conservatives polling over 50%, this lead briefly surpassed 20% at the beginning of the Covid  pandemic in March and April 2020.

In late February 2022, and prior to the Russian invastion of Ukraine, there were some tentative signs that the Conservative position had recovered slightly from its early 2022 lows.

With the Russian invasion of Ukraine heavily dominating the UK news agenda, the position of the UK’s political parties became somewhat becalmed during the spring on 2022 with no notable movements in the polls.

However amidst mounting pressure on Boris Johnson’s position in late June, and the drawn out nature of his resignation in early July, the Labour party  once extended their lead over the Conservatives in the polls.  This lead was trending at around 8% at the point that Liz Truss became prime minister in September 2022.

Rather than experience a new prime ministerial bounce, in September 2022, the picture was not positive for Liz Truss.  In the first three weeks of her premiership, the Labour lead over the Conservatives extended to 11%.

Pollsters showed that Liberal Democrat voting intention during most of this Parliament was constant at around the 9% mark with only temporary uplifts above this point.  In the autum of 2022, the party was polling around the 11%.

Dear Colleague

There are reports that Kwasi Kwarteng is writing to various MP WhatsApp groups for support.

Owl imagines the “Dear Colleague” message:

Dear Colleague,

I understand your concerns that you may lose your seats at the next election, but we have to make tough choices if I am to stay Chancellor and Liz as PM.

Our priority is to grow the economy so that everyone can get a slice of a bigger cake while those at the top enjoy the cream.

The only way to do this is by cutting taxes at the top, and that is what we must deliver. There is no alternative.

If necessary, we must fund this by reviewing government expenditure, even the inflation uplift on benefits. Nothing is off the table. 

We will show markets that our plan is sound. At the moment it is all based on ideology and my team of teenage Spads need to flesh out the details. When we have a plan, of course we will ask the OBR to demonstrate that it is sound, credible and will work to drive growth. Their existence as an independent organisation will depend on it.

We need your support to do this as the only people who win if we divide will be ordinary people, rather than the rich who are the only ones driving the economy and funding our party.

I am always available for a meeting and I hope we can engage dynamically in the coming weeks.

Black Wednesday 2022 – not to be confused with Black Wednesday 1992

Though both occurred under Tory Government. [1992 is when we were forced out of the ERM]

Since the “fiscal event”, without any figures to back its credibility, was announced last week we have had a currency crash, veiled criticism from the IMF to row back, followed by bond rate surges yesterday that threatened to bankrupt our pensions funds. The Bank’s of England’s emergency action, effectively printing money, will now add to inflation.

Now pick up form this extract from www.theguardian.com

“It is at this point, one hopes, that reality dawns on Tory MPs that the current crisis has very little to do with a strong dollar or global forces, or any of the other excuses that have been trotted out in recent days. The Bank had to intervene to save the government from the consequences of its own actions.

While forced selling by pension funds intensified the action, the deeper turmoil comes by markets’ brutal verdict on Liz Truss and Kwarteng’s £45bn package of tax cuts. It was investors – not the International Monetary Fund, say – who first judged that the chancellor’s plan is no way to manage the public finances when you are borrowing potentially huge sums to underwrite a blank-cheque guarantee on household energy bills for two years.

The supposed prize – an improvement to 2.5% in the UK’s growth rate – is years away, if it arrives at all. Meanwhile, inflation is 9.9% and the current account deficit, at 8%, is wide. Investors may tolerate a few economic unorthodoxies, but they’ll demand stiff terms to fund an economic gamble that simply looks reckless. That is the source of the surge in gilt yields. It flows from Downing Street.

So, too, does the incidental damage to the Bank’s own credibility, Only last week it was planning to sell gilts into the market – not buy them – under its quantitative tightening programme (or QT, the reversal of the easing programme of the last decade). Now QT has been delayed until the end of next month, which feels like a hope rather than an expectation. The Bank had no real choice in the matter, but confusion is unmistakable.

Meanwhile, dysfunction continues in the mortgage market as lenders yank fixed-interest offers. That part of the tale should also sound alarm bells on the backbenches. Panic over mortgage costs is now water-cooler and pub talk.

The way out of the mess must involve U-turns. Even after the Bank’s temporary yield-suppression operation, Kwarteng’s programme looks unaffordable. The size of the borrowing coming down the track is too large, and the risks to households’ and businesses’ borrowing costs are too great. Kwarteng pitched his plans as a way to avoid a deep recession, but the market’s reaction to his fiscal pyrotechnics has created the risk of a deeper one.

A couple of contenders for U-turns can be read from the IMF’s withering assessment. A minor tweak would reinstate the 45p income tax rate for high-earners as a signal of prudence. A bigger move would trim the energy support programme to six months and introduce a targeted scheme thereafter.

But if Kwarteng is determined to charge down his original track (he seems to be), he should hammer down his new fiscal rules and announce them soon. 23 November, the intended date, is too far away. The same goes for the Office for Budget Responsibility’s assessment of the state of the public finances. Let the budgetary watchdog bark.

A more dramatic U-turn lies in the hands of those same Tory MPs who must digest two hard facts. In the space of four trading days, a Tory “fiscal event” has led to a major intervention by the central bank to avert a “material risk” to financial stability and a run on pension funds. And none of this would have happened if Rishi Sunak had won the leadership contest. Kwarteng, surely, cannot survive another day like Wednesday.”

Right now it appears that Truss and Kwarteng are intent on “doubling down” by finding cuts in government spending including from benefits payments and state pension inflation upgrades.

In other words benefit claimants and pensioners are going to be expected tp pay for the reduction of top rate tax from 45% to 40%.

This is not what the IMF expects. There will be more fireworks.

EDDC vote to conduct independent investigation into jailed paedophile Humphreys

A quick impression of last night’s extraordinary consultative meeting.

Back in April the council voted unanimously, with one abstention, to conduct an investigation into how Humphreys continued in his council roles, with access to children, and then became an honorary Alderman after his arrest. 

The Chief Executive, Mark Williams, was asked to advise how this could be done. So it may surprise readers to know that five months later the Council met again last night to vote on whether or not to conduct an investigation.

In the interim, Mark Williams had decided to advise the council against taking any such action because, in his opinion, all that was to be known was known and such an exercise would be a waste of taxpayers money. Just how Mark Williams can make such a categorical statement hasn’t been revealed. He kept repeating the mantra that the council must be “Fact specific”.

This “foot dragging” led Cllr Jess Bailey to take the unusual step of raising a ”requisition order” to appoint, after research, a specific independent investigation organisation, Verita, to conduct one (referred to as Option A). For a requisition order to be put to the vote it has to be supported by nine councillors. 

Her move prompted Mark Williams to come up with an alternative (Option B) which would involve commissioning a legal practice to undertake the investigation. However, his first recommendation to the council was to drop the notion of conducting an investigation, but if the council rejected this advice then it should consider his Option B as an alternative to Option A.

After debate, the council voted to conduct an independent investigation by 27 votes to 9 with 5 abstensions. There were quite a few apologies.

The council then turned its attention to the two options put before it.

During this, in what seemed a surprising move to Owl, the Chief Executive started to sow confusion by spewing out other options such as conducting an external audit or even getting asking the Secretary of State to conduct a review through a process whereby the council reported itself for misconduct!

During discussion yet more options emerged such as using Ofsted, the option recently adopted by Devon County Council. 

When put to the vote Council members voted:

22 votes to choose Option A, zero votes for Option B with 18 abstentions.

So the option concocted by the Chief Executive was completely rejected. 

Owl was left with the overwhelming impression that the council has been badly let down by Mark Williams, Chief Executive.

In April he was asked to advise how an independent investigation could be conducted. This was the moment when he could have come up with the idea, that Devon County Council came up with a couple of weeks ago, of using Ofsted or indeed any of the other options he suddenly threw into the pot last night. But he didn’t, he left a void and failed to give any constructive advice other than an investigation is unnecessary and a waste of money.

We know the debate was watched by one of the victims. He very courageously gave an introductory speech as a member of the public. Special arrangements had been made so that he could do this anonymously. He spoke about how his life had been wrecked, how important it was for his rehabilitation to be heard and how an investigation would help him.

As Cllr Eleanor Rylance put it: Humphreys weaponised his role as a councillor, later an Alderman, to elevate his status in society to put him into a position of being beyond reproach. He used it to intimidate his victims.

Some councillors were close to tears whilst making their contributions during debate. But, watching the debate, the victim may have been left with the impression that a significant “establishment” barrier lurks in the background.

Liz Truss’ honeymoon cancelled as pound plummets and UK borrowing costs soar

Not sure it ever started – Owl

Bank of England forced to issue emergency statement after UK leader’s mini-budget triggers market turmoil.

Esther Webber, Emilio Casalicchio www.politico.eu 

LIVERPOOL, England — As an inexperienced leader taking charge of a country in crisis, Liz Truss knew she needed to hit the ground running this month.

But three weeks into her fledgling premiership, the new U.K. prime minister finds herself scrambling to stay ahead of events as last Friday’s tax-cutting mini-budget spooked financial markets, sending Britain’s borrowing costs soaring and the pound tumbling to an all-time low.

“If you start going off on a dangerous tangent,” one former Tory Cabinet minister mused, “the markets will intervene.”

And intervene they did. The pound fell to a record low against the dollar Monday morning as markets reacted to the biggest package of tax cuts in 50 years, a plan that raised expectations borrowing will surge.

Chancellor Kwasi Kwarteng was forced to issue an emergency statement late Monday, promising a fresh package of supply-side reforms over the coming weeks and a fully costed “fiscal plan” on November 23 to get U.K. debt levels falling over the medium term.

Bank of England Governor Andrew Bailey offered no immediate rates rise, but warned the bank’s monetary committee “will not hesitate to change interest rates as necessary” to push down double-digit inflation. The pound rallied somewhat later in the day, but nowhere near enough to recover recent losses.

The economic turmoil set nerves jangling on the Conservative backbenches, with MPs fearing their party’s long-held reputation for sound economic management is now at serious risk. Traditionally the Tories have found political success in painting their Labour opponents as high-spending and economically illiterate.

“[I’m] very worried,” said one of the dozens of Tory MPs who backed Truss’ opponent, Rishi Sunak, in the summer-long leadership contest. “It’s the effect on interest rates that scares the bejeezus out of me. If you think things are bad now, just wait till we see home repossessions.”

Such trepidation about Truss’ approach is commonplace on the Tory backbenches. The new PM entered Downing Street three weeks ago in a precarious political position, having failed to secure support from the majority of her own MPs in the parliamentary stage of the leadership race.

Her friends and critics alike suggested she may only have two or three weeks to prove to the party she has what it takes to lead the country through a time of economic crisis. 

But while a multibillion-pound energy bailout announced on Truss’ third day in office went down reasonably well, she did not get the chance to sell it to the country as her planned agenda was overtaken by the death of Queen Elizabeth II.

Her first big appearance on the world stage then fell somewhat flat after she was offered a graveyard 9 p.m. slot for her speech at the U.N. General Assembly. And her domestic position appears to have weakened further in the wake of last week’s much-hyped mini-budget. 

“It’s worse than Black Wednesday,” said another Sunak-backing Conservative MP., referring to the infamous Sterling crisis of September 1992. “This is self-inflicted and without a mandate, whereas at least [Black Wednesday] was perceived as a bid to manage a crisis.”

Another MP said: “This is dangerous territory … What the PM hasn’t realized is that any gains made by the tax cuts will be more than outweighed by increased mortgage payments.”

Nor is disquiet in the Tory ranks confined to Truss’ sworn opponents.

One former minister who backed her in the leadership race said the decision not to publish official economic forecasts alongside last week’s tax cuts was “a bit of an own goal.”

“The Chancellor should have set out the fiscal position last week,” the MP said. “Markets hate uncertainty.”

Part of the markets’ reaction has been sparked by the absence of any clues from the government about where they might make spending cuts to reduce levels of borrowing.

“You can’t just borrow your way to a low-tax economy,” former Tory Chancellor George Osborne told Channel 4 News. “Fundamentally, the schizophrenia has to be resolved — you can’t have small-state taxes and big-state spending.”

Some fear, in addition, that Truss’ top team lacks the savvy to deal with multiple economic crises. 

“They look lightweight to me,” said a former Downing Street aide of the new-look No. 10 operation. “There’s not a lot of experience in there.”  

The former adviser questioned new chief of staff Mark Fulbrook’s organizational skills and highlighted the relative youthfulness of many of his Downing Street colleagues.

Others heaped fresh criticism on Kwarteng’s decision to dismiss Tom Scholar, the long-serving top official at the Treasury, as one of his first acts in office. 

“To fire your only official with serious experience of crisis management and then precipitate a crisis a fortnight later brings postmodernism to a new level,” tweeted former Treasury Permanent Secretary Nick Macpherson.

Typically a new prime minister can at least expect a significant, if temporary, poll bounce on entering office — but no such phenomenon appears on the cards for Truss, with the Labour Party maintaining a 12-point lead.

Yet Truss’ supporters are urging their colleagues to be patient, arguing that party members picked someone offering a radical change for a reason.

One Truss-backing minister said: “The dollar is strong, and we have just seen a significant change in economic policy. It is inevitable that would have an impact on trading. Things will settle when the markets get used to it.”

And another Sunak-supporting MP insisted that excitable Westminster chatter of a further leadership challenge so soon after the ouster or Boris Johnson was overblown.

“There’s a huge amount of ill feeling,” the Tory MP said. “People are angry. But I think self-preservation is a much more motivating factor.

“We haven’t got any choice. We have got to get behind this. Governments who get things wrong tend to lose elections but governments that are split definitely lose elections.”

IMF says UK fiscal measures will ‘likely increase inequality,’ urges rethink

A couple of weeks ago Owl asked the question: are the Tories on course to crash the economy? 

Regrettably, we now know the answer is YES, and we are all going to suffer.

The IMF usually reserves criticism of this sort for “basket case” economies.

Seems hard to see the economy growing when underlying borrowing costs are twice that of Germany. Standby for consequences on mortgages and house prices. Where is the party of “sound money” – Owl 

www.reuters.com 

WASHINGTON, Sept 27 (Reuters) – The International Monetary Fund on Tuesday took aim at new British financial plans that have roiled markets, warning that “large and untargeted fiscal packages” would likely increase inequality in Britain and could undermine monetary policy.

In its first comments on plans by Britain’s new finance minister Kwasi Kwarteng, which have sent sterling and bonds into free fall, the IMF urged UK authorities to consider providing more targeted support to families and business instead of sizable tax cuts and sharply higher government spending.

“We are closely monitoring recent economic developments in the UK and are engaged with the authorities,” an IMF spokesperson said, in response to a query from Reuters after the British pound hit an all-time low amid spiking market concerns.

“Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” the spokesperson said in the IMF’s first public reaction.

Kwarteng, who on Friday unveiled a budget aimed at growing the economy by cutting taxes and sharply increasing government borrowing, responded to market mayhem by promising to roll out medium-term debt-cutting plans on Nov. 23.

The global lender understands that Britain’s “sizable fiscal package” was intended to help residents deal with higher energy prices and to boost growth via tax cuts and supply measures, but such measures could put fiscal policy at cross purposes with monetary policy, the spokesperson said.

“The nature of the UK measures will likely increase inequality,” it added.

Kwarteng’s Nov. 23 budget would provide an “early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners,” the spokesperson added.

Britain was forced to apply for an IMF loan of nearly $4 billion during the 1976 financial crisis, with IMF negotiators insisting on deep cuts in public expenditure at the time.

IMF officials have warned repeatedly in recent months of the need to carefully calibrate fiscal and monetary policy as central bankers raise interest rates across the globe to get inflation under control.

Meanwhile the cost of borrowing increases:

10 year gilt yield is now higher than that of Greece and Italy and more than twice the equivalent borrowing cost for Germany.

.

Former Ofsted inspector to lead independent Devon County Council review into failure to act over Humphreys

An ex-Ofsted inspector will lead an independent review into how Devon County Council failed to properly deal with concerns made in 2014 about a former school governor from Exmouth who was later jailed for historic sex offences, writes local democracy reporter, Ollie Heptinstall.

[Rather undermines EDDC Chief Executive Mark Willliams’ criticism of Cllr Jess Bailey’s suggestion that a specialist investigative company, rather than a “Legal 500 recommended firm of solicitors” should conduct the EDDC investigation. One wonders whether DCC is “sufficiently sighted on the legal framework, issues and implications of this issue”, to quote again from MW. Horses for courses? – Owl]

Watch the EDDC debate on whether or not to conduct an investigation on the EDDC Youtube channel 6.00pm tonight.

eastdevonnews.co.uk 

John Humphreys, who also previously served as an East Devon district Councillor and mayor of Exmouth, is just over a year into a 21-year prison sentence for sexually assaulting two teenage boys in the early 1990s and early 2000s.

It was revealed in June that the National Society for the Prevention of Cruelty to Children (NSPCC) had raised concerns about him in 2014, when allegations had already been made to the police.

But Devon County Council chose not to take any action after officers discussed the case with police, a decision the council’s cabinet member for schools, Councillor Andrew Leadbetter (Conservative, Wearside and Topsham) has admitted was wrong, and that it should have shared the concerns more widely.

In his written response in June to county and district councillor Jess Bailey, Cllr Leadbetter said: “I can confirm that the local authority designated officer (LADO) received a referral via the NSPCC in 2014. As part of the LADO process, our officers discussed the case with the police.

“The police were already aware of the individual and the allegations that had been made and advised us that there was not enough evidence to investigate further, and it was agreed that no further action would be taken.

“We have evaluated the response that was made in 2014 and concluded that we should have held a multi-agency meeting to share information and consider what, if any, next steps could be taken.”

After previously confirming the investigation would be undertaken, the council has now revealed it will be carried out by experienced social care practitioner and former Ofsted inspector Mike Ferguson.

Since 2018, he has worked as an independent children’s social care consultant, undertaking practice reviews with a range of local authorities.

Work has begun on the review and is expected to be completed later in the autumn.

East Devon District Council (EDDC) has also been looking into how Humphreys – despite his 2016 arrest – was allowed to carry on in his role as Councillor until May 2019, then awarded the honorary title of alderman later that year.

Later this week (Wednesday, September 28) EDDC will decide whether to conduct a formal investigation into why Humphreys was not removed from his position sooner.

 

John Humphreys investigation continues

More on the timeline of who knew what about John Humphreys.

The point that Owl made in Monday’s post was that information has emerged piecemeal, only when someone has had the courage not just to ask questions, but to press them home.

What prompted this latest revelation was Cllr Jess Bailey formally asking, in June, when concerns were first raised with Devon County Council about John Humphreys and what action had been taken to keep children safe.

In a written response, to her, Cllr Leadbetter (Cabinet member for Children’s Services and Schools) said: “I can confirm that the Local Authority Designated Officer (LADO) received a referral via the NSPCC in 2014. As part of the LADO process, our officers discussed the case with the police. The police were already aware of the individual and the allegations that had been made, and advised us that there was not enough evidence to investigate further, and it was agreed that no further action would be taken.

We also need to bear in mind that what the Conservative Party “knew” might be less than what its individual members knew. Until we have a better understanding of the timeline of events it is difficult to see what needs to be done to reduce the chance of this happening again.

Devon County Council is now conducting its own investigation but the Devon and Cornwall Police Force is not. Tomorrow, EDDC is to consider two options.

It is over a year since John Humphreys was jailed for 21 years

Georgia Cornish. www.exmouthjournal.co.uk

The Conservative Party claims it was not informed about a paedophile councillor among its ranks, despite Devon County Council and East Devon District Council officers being aware of allegations for many years.

John Humphreys was an East Devon councillor for around 20 years, and at one point also mayor of Exmouth. In 2021 he was charged with 10 accounts of serious sexual offences against two teenagers in the 1990s and 2000s, and is now serving 21 years in prison.

A motion to be put this week to East Devon District Council (EDDC), which was run during that time by the Conservatives, but is now under the control of the East Devon Alliance party, asks the council to commission an investigation into how Humphreys was able to continue as a councillor and a school governor, despite his arrest in 2016.

On Wednesday 7 September, EDDC received a reply from the Conservative Party following a request to East Devon MP Simon Jupp to investigate. Mr Jupp says he is not involved in selecting prospective councillors and passed the letter to the chair of the local party for a response.

In that letter, Cllr Bruce De Saram writes: “Devon County Council has admitted that they were notified of concerns by the NSPCC dating back as far as 2014 and of [John Humphreys’] arrest in 2016 and failed to follow the correct process…..EDDC were informed of the case by Devon County Council in March 2016 through the LADO process.”

LADO (Local Authority Designated Officer) is a role in the children’s services department of the county council role which coordinates a response to concerns about risks to children. They convened meetings to discuss Cllr Humphreys case in 2016.

Mr De Saram’s letter to EDDC continues: “The Conservative Party was not invited to join these LADO meetings. The Conservative Party was not informed by the LADO of the case.

“The LADO process provides a vital opportunity for information to be shared in a confidential environment between all relevant organisations in circumstances such as this.

“It is concerning that the Conservative Party was not informed or invited to attend as we clearly had a role in this, which the current council is undertaking to hold us accountable for.

“Had we been involved in this process and made aware of the details we would have been able to take the appropriate steps. This involvement would have ultimately prevented from him becoming a Conservative candidate and undertaking activities on behalf of the Conservative Party as detailed in your letter.”

In May, East Devon’s chief executive Mark Williams confirmed in a memo to councillors that one of its officers attended two LADO meetings called by Devon County Council in 2016, the year Cllr Humphreys was arrested on suspicion of assaulting one boy. However, he was not charged or the information about his arrest made public. He had also been questioned for similar offences in 2005 but no charges were brought.

In Mr Williams’ email in May this year, prompted by an enquiry by the Local Democracy Reporting Service, he told councillors of a further LADO meeting planned for November 2016 “prior to any decision by the police to charge Mr Humphreys. While a further LADO meeting was organised for January 2017, this was postponed a number of times, and then cancelled.”

Mr Williams describes how the East Devon council officer then had no further communication with the county council or the police after November 2016. “The officer was unaware that Mr Humphreys had been charged [at a much later date] or that he was later to face trial,” Mr Williams wrote.

“He only became aware of the fact that Mr Humphreys had been charged and stood trial after the conviction in 2021.

“It is important to know that LADO meetings are held in the strictest confidence. Furthermore, the police also give clear instruction on what can or can’t be said so as to avoid potentially jeopardising any information.”

East Devon District Council is holding an extraordinary consultative meeting on Wednesday [28 September], at which the report concerning Mr Humphreys will be reviewed. The council will be asked to decide whether they believe an independent investigation is necessary.

Councillor Jessica Bailey has put forward a proposal for an independent investigation which is estimated to take eight to 12 weeks if commissioned.

Labour surges in polls as ‘clown show’ economics turns off voters

Labour has surged to its largest poll lead over the Conservatives in more than two decades, with voters turning against Kwasi Kwarteng’s tax-cutting budget. A YouGov poll for The Times today puts Labour 17 points clear of the Tories — a level of support not seen since Tony Blair won his landslide victory in 2001.

Oliver Wright, Steven Swinford, Chris Smyth www.thetimes.co.uk

The survey revealed widespread public opposition, including among Tory supporters, to the tax-cutting measures announced by the chancellor last week.

Kwarteng’s decision to scrap the 45 per cent rate of tax for those earning more than £150,000 was opposed by 72 per cent of voters including 69 per cent of those who backed the Conservatives in 2019.

The move to lift restrictions on bankers’ bonuses was rejected by 71 per cent of the electorate, including 67 per cent of Tory voters.

Just 9 per cent of voters thought that the measures outlined in the budget would make them better off, while only 15 per cent believed they would achieve the government’s aim of kickstarting economic growth.

Overall, 60 per cent said Kwarteng’s £45 billion tax giveaway was unaffordable for the country and 25 per cent thought that the government had a clear plan to manage the economy.

The poll findings will alarm Tory MPs coming on top of today’s market reaction to the government’s plans to increase borrowing in the short term to boost growth.

Just 19 per cent of voters thought Kwarteng’s budget was “fair” — the worst polling figure since YouGov began to ask the question in 2010.

One Conservative source said: “If your plan is unpopular with the markets but popular with voters, then that’s an OK place to be. But if you’ve spent all this money and it’s unpopular with everyone, then that is very dangerous.”

YouGov’s survey, which was conducted over the weekend, showed that Tory support had fallen by four points to 28 per cent in the aftermath of the budget while Labour’s had risen five points to 45 per cent and the Lib Dems were unchanged on 8 per cent.

It is the biggest Labour lead that YouGov has recorded since it began polling in 2001. In the election that year, Labour won 43 per cent of the vote and took 412 seats. The Tories won 30 per cent of the vote and 166 seats.

The decline in support for the party appears to be linked directly to the reaction of the public to last Friday’s “mini-budget”. Just 10 per cent of voters thought that Kwarteng was doing a “good job” while 68 per cent said that the government was managing the economy badly.

Despite announcing tax cuts and scrapping Rishi Sunak’s national insurance rise, only 9 per cent of voters said they felt they would be better off next year. The same proportion believed that Kwarteng’s growth strategy would make the country as a whole better off over the next 12 months.

Ministers will point to some of the specific measures in Kwarteng’s package that voters supported in the poll.

Jon Ashworth: Working people think Liz Truss has lost the plot

Some 60 per cent backed the move to cut the basic rate of income tax from 20 to 19 per cent while 59 per cent supported reversing the national insurance rise. About half backed the planned changes to stamp duty.

However, just 31 per cent supported the decision to freeze corporation tax while 11 per cent agreed with scrapping the 45 per cent tax rate for the highest earners.

They were also unconvinced by Kwarteng’s plan for new investment zones free from some planning restrictions and regulations, with only 34 per cent saying they were a good idea.

Labour reacted jubilantly to the market turmoil, with a senior frontbencher mocking the government’s “clown show” economics.

Wes Streeting, the shadow health secretary, called Friday’s statement a “kami-Kwasi budget”. He suggested that Liz Truss was still “a deep-state Liberal Democrat, deliberately crashing the Conservative Party — there is no other plausible explanation for the clown show we’ve seen last week”. The prime minister was president of Oxford’s Lib Dem society as a student.

Lord Mandelson suggested that the next election could be comparable to the 1997 victory by Tony Blair for Labour. He claimed that the mini-budget saw the Tories forfeit their reputation for competence on the economy and described the government as “exhausted and run out of steam”.

Huw Merriman, a senior Tory MP, said Labour’s largest poll lead over the Tories in more than 20 years suggested that Truss was losing voters “with policies we warned against”.

He tweeted: “Those of us who backed Rishi Sunak lost the contest but this poll suggests that the victor is losing our voters with policies we warned against.

“For the good of our country, and the livelihoods of everyone in our country, I still hope to be proven wrong.”

Tim Farron offers help to PM and Chancellor…… and other headlines

“The last time the pound sunk as low as it is today, I was 15 and doing economics O’level. If I have a good search in the garage, I might find my text books in which case I’ll be happy to lend them to the PM and the Chancellor. Their need is apparently greater now…”

The pound Kwatanks – the Metro

Out of Control – Mirror

Don’t panic we have got a plan – Daily Express

Pound’s plummet underlines schoolboy error by Kwasi Kwarteng

The savage sell-off in the pound in east Asia overnight [Monday] was further evidence – should any be needed – that confidence in the new Liz Truss government is rapidly draining away.

Larry Elliott www.theguardian.com 

Sterling fell to its lowest level against the dollar, and despite an attempt at a rally in early London trading, the likelihood is that parity against the dollar will be tested before long. September tends to be the month for a sterling crisis – and so it has proved again.

Part of the story of the pound’s weakness is a function of dollar strength but that does not explain why sterling has fallen so rapidly since the end of last week. There are three UK-related factors behind the fall.

First, once a currency hits the skids it is hard to stop it. Momentum trading took over in the aftermath of Kwasi Kwarteng’s mini-budget and it has proved hard to halt.

Second, Kwarteng committed a schoolboy error by pledging further tax cuts in a full budget planned for later this year. If the markets are worried about the state of the government’s finances and the increase in borrowing needed to fund your plans, it is not the wisest course of action to add to those concerns. Kwarteng’s inexperience has been exposed.

Third, the financial markets don’t really know how the Bank of England will respond to the events of the past three days. Threadneedle Street raised interest rates by half a point last Thursday but there has been speculation of an emergency meeting of the Bank’s monetary policy committee as early as Monday.

Paul Dales, the chief UK economist at Capital Economics, says a rate rise of one – or even one and a half – percentage points would give the markets some reassurance that the Bank was committed to returning inflation to its 2% target.

While that would look like the Bank passing judgment on Kwarteng’s tax cuts, the alternative would be for the governor, Andrew Bailey, to give a strong statement that the MPC will raise rates again at its next meeting in November.

However, as Dales points out, November looks a long way away in the context of what has become a disorderly rout for the pound. Kwarteng would also need to show the Bank and the Treasury were of one voice by making clear he was committed to financial discipline, which would be seen as a U-turn by the chancellor after his weekend comments.

East Devon press ahead with local plan settlements despite protests

East Devon is pressing ahead with its local plan 2020-2040 with recommendations to endorse the sites suggested for development, despite protests from several strategic planning committee members.

seaton.nub.news

On Tuesday [6 September] the committee discussed a report outlining a number of preferred and “second best” sites for what they call tier one and two settlements around the district that may be suitable for development.

The tier system references a hierarchy of settlements being discussed, with tier one indicating places in Exmouth, tier two being Honiton and Sidmouth, three covering Axminster, Seaton, Ottery St Mary, Budleigh Salterton and Cranbrook and finally, tier four which includes Clyst St Mary, Uplyme, Colyton, Beer, Broadclyst, Lympstone, Woodbury and Dunkeswell.

Concerns raised in the report included the current plan failing to reach the desired number of new homes, and is currently expected to be 1,899 properties short.

Allocating additional “second best” sites could alleviate the shortfall in tiers one and two, with additional housing planned for tiers three and four once assessments have begun at that level. 

Housing density, currently being modelled at “reasonably typical standard density levels,” could be increased too. Other adjustments could limit the shortfall, as could expanding Cranbrook.

Whilst some objections were raised about the locations of the proposed developments, more concern was expressed about the lack of infrastructure to support these new settlements.

Councillor Jess Bailey [Independent, West Hill and Aylesbeare] said the target for housing was “incredibly burdensome,” and that she feared the manner in which the proposed sites have been assessed is “too anecdotal”.

She is calling for more refined assessments, ones that outline what would happen should infrastructure such as schools and healthcare provision be lacking.

The lack of infrastructure across Devon has been highlighted recently in a BBC survey finding that no dental practices in the county are accepting adult NHS patients.

The waiting list is reported to have reached 78,000 patients last summer, with an increasing number of dentists dropping patients from their NHS lists.

The recommendations, backed by the majority of committee members, will be applied to future plans and revisited at future meeting.

Planning applications validated by EDDC for week beginning 12 September

Sewage spills go undetected as water companies give watchdog “dodgy data”

Sewage spills into rivers and the sea often go undetected because water companies are supplying faulty data to a government watchdog, analysis for The Times suggests.

Rhys Blakely www.thetimes.co.uk 

The findings will fuel concerns that a £56 billion plan to reduce discharges will be undermined if water companies are allowed to continue monitoring their own performances.

The issue will be in the spotlight in a High Court hearing this week at which Ofwat, the water industry regulator, will be accused of ignoring its duty to protect the environment.

The latest analysis looked at spills of sewage into rivers and the sea from “storm overflow” emergency outlets that are supposed to be used only in severe conditions.

By looking at detailed data collected in 36 sewage treatment works — information that the Environment Agency (EA) can access but does not routinely check — 1,516 days were identified between 2018 and 2021 when it appeared highly likely that sewage was released in conditions that did not meet permits, making them illegal.

The EA is supposed to be made aware of them but many were not reported. For example, the analysis included the sewage treatment works at Henley-on-Thames, a noted rowing area. Thames Water, which operates the sewage works, told the EA there were no spills in 2020. The analysis suggests the plant released sewage in breach of its permit on seven days that year.

The analysis also looked at the Woodstock sewage treatment works which discharges into the River Glyme which flows through lakes in the grounds of Blenheim Palace.

Thames Water told the EA in 2020 there were no spills but added that this was a mistake and the report would be corrected. The new analysis suggests the sewage plant, in a site of special scientific interest, spilled for about 363 hours that year.

The private utility company has not updated its 2020 report, which was submitted 18 months ago. It has not disputed the new analysis. The report also includes the Ambleside sewage plant in Cumbria, which discharges into the River Rothay and into Windermere, England’s largest lake. Pollution concerns were raised this summer because the lake suffered high levels of potentially toxic blue-green algae.

Ambleside appears not to have submitted any data on spills to the EA for last year. Data supplied by United Utilities for the analysis suggests that it spilled for more than 900 hours. United said it did not agree with the analysis, claiming it was “largely based on assumption rather than evidence”.

Overall, 16 of the 36 sewage works examined appear to have provided incorrect data to the EA.

Professor Peter Hammond, of Windrush Against Sewage Pollution (Wasp), carried out the analysis. His exposure of illegal spills helped to force the government to begin an investigation that led to a proposal last month to tackle the problem.

The spills involve “storm overflows” which act as relief valves for the sewage system. They are supposed to discharge excess storm water, combined with untreated sewage, directly into water bodies during periods of heavy rainfall.

Hammond has shown that many overflows are spilling waste into rivers when there is little or no rain and before treatment works are working at full capacity.

The government plan calls for a mandatory £56 billion investment programme by the water companies.

There are about 13,350 storm overflows in England, discharging to rivers. A report commissioned by the government looked at 9,240 of them and concluded that they were used more than 340,000 times in 2020.

The government plan calls for a 14 per cent reduction in these spills by 2030 and a 50 per cent reduction by 2040. The new analysis suggests, however, that the EA will not be able to monitor compliance if it continues to rely on water companies monitoring themselves.

Ofwat said that it was reviewing Hammond’s analysis. The regulator said: “What we are witnessing, with sewage being released into the environment, isn’t acceptable. Water companies do not take enough responsibility for their impact on the environment.”

A spokeswoman for the Rivers Trust said: “This report emphasises the inherent failures with the current system of self-reporting sewage spills. It’s clear the data has not been adequately audited and in many cases is invalid.

“We need a much better process of quality assurance from the water companies themselves, plus a stronger audit from the EA.”

Five of the ten water companies that were covered did not take issue with Hammond’s analysis of the performance of the treatment included in the study. However, United Utilities Severn Trent, South West, Anglian Water and Yorkshire said that they did not agree with his findings. An Anglian representative said: “We don’t recognise the data being put forward in this report as being correct.”

Hammond’s report also highlights the difficulty he has faced in getting some water companies to share data. “There are 40 STWs named [in the new report] but only 36 analysed because of data being withheld,” he said.

He said Severn Trent and United Utilities — judged by Ofwat to have met an “industry leading” standard for environmental performance — have refused to supply detailed data for sewage spills in 2020 and last year from 4,500 overflows whereas the other eight water companies complied fully with the request.

A spokeswoman for United said: “While there is an ongoing regulatory investigation into the performance of wastewater treatment works, it is right and proper that the relevant data is shared only with the investigating authorities.”

‘Sheep or jobs – your choice!’

Councillors debate what a freeport will mean

Councillors in South Hams were asked to choose between sheep and jobs  – including an exchange about the relative merits of eating grass or money – during a debate about the planned Plymouth and South Devon Freeport.

Philip Churm, local democracy reporter www.radioexe.co.uk

Langage Energy Park (image courtesy: Google Maps)

They were discussing the need to acquire land for the proposed Langage Energy Park through compulsory purchase orders (CPO).

In April, South Hams District Council (SHDC) agreed to take part in the freeport project, which involves Plymouth, South Hams and West Devon. 

Freeports are areas where normal tax and customs rules do not apply. Imports can enter with simplified customs documentation and without paying tariffs.

During Thursday’s full council meeting [22 September] members debated a recommendation to approve an area of land next to the A38 at Langage which may need to be obtained by compulsory purchase. 

The legal costs for this could reach £350,000.  

Green Party councillor for Dartington and Staverton, Jacqi Hodgson, criticised the plan, suggesting the land could be better used.  

She said: “We need the land that we have for food, if we’re going to reduce our carbon footprint as massively as we need to, and we’re going to need all the land we can to grow our food. 

“And I know this is all about money, but as they always say, ‘you can’t actually eat money.’ 

“I would just ask, if we’re meant to be requiring net biodiversity gain, how are they going to do that by converting green-field land that’s currently supporting sheep farming and food production?”

Langage Energy Park including the area that may need to be compulsorily purchased (image courtesy: SHDC)

Council leader and Conservative member for Salcombe and Thurlestone Judy Pearce responded by highlighting how the economic benefits outweighed the disruption. 

“It’s all very well to say that we ought to have sheep on the land or we ought to be building houses instead or something like that,” said Cllr Pearce. “But actually this freeport is going to provide some really well-paid jobs.”

Cllr Pearce suggested successful businesses and well-paid employees pay tax which benefit all members of society.  

“If we don’t have things like freeports and employment areas, we’re going to get none of those taxes in – none of those business rates. And there’s not going to be any money to run any of our public services.

“So you take your choice. You can either have sheep or we can be better off.  And a lot of people these days are vegetarians anyway. So what are you going to do, go out and eat the grass?”

Langage Energy Park is one of three freeport tax sites proposed for Devon. The others are at South Yard in Devonport and part of Sherford Employment Zone; providing a combined footprint of around 130 hectares for development.

The vote to approve the compulsory purchase orders was passed by 21 in favour, four against and four abstentions.  

Total capital investment in the freeport is expected to reach £311 million; made up of £25 million in a government seed capital grant and matched locally with £29 million.  The total private sector investment is expected to be almost £247 million.

EDDC to decide on investigation into Humphreys at Extraordinary Consultative Meeting Wednesday 28 September

John Humphteys was convicted in 2021 of the historic rape of two boys and sentenced to 21 years.

He was first questioned in 2005 but police did not find sufficient evidence for a prosecution.

Following a complaint by a second victim, Humphreys was arrested eleven years later, in 2016, before being released on bail on suspicion of sex crimes against children. 

John Humphreys was Mayor of Exmouth from 2012 to 2014 and served for 12 years as a Conservative councillor on East Devon District Council (EDDC). He was also a governor of a primary school in Exmouth and was appointed an alderman by EDDC in 2019. He accepted the honour despite knowing that he was under investigation by the police.

EDDC in an Extraordinary Consultative Meeting to be held online on Wednesday 28 September at 6.00pm is to decide whether or not to investigate how all this could have happened and what lessons can be learned.

The issues couldn’t be more serious: the protection and safeguarding of children.

Owl believes this online meeting must be witnessed by as many East Devon residents as possible, preferably in real time, alternatively later on the EDDC Youtube channel. 

More than enough evidence for investigation

In May the inews.co.uk carried an investigative report on Humphreys uncovering evidence that:

“The council knew Humphreys was being investigated for sex offences from 2016 but did nothing to prevent him continuing with his duties, which involved him coming into contact with children”

Also:

“A senior council official knew about the police investigation into Humphreys in 2016 because Devon and Cornwall Police asked him, in a formal meeting, if Humphreys’ continuing role as a councillor would bring him into contact with children, i has learned.”

And:

“A leaked memo from East Devon District Council (EDDC) chief executive Mark Williams, which was sent to all 60 councillors earlier this month, states: “An officer knew something dating back to 2016 but was under a duty of confidentiality.”

“A second councillor is also alleged to have told a fellow member that he knew Humphreys had a court hearing coming up but it is not clear if he knew details of the charges.” ( Covered in this post)

These are more than enough grounds to prompt an investigation. Obviously in a spirit of candour to learn lessons, rather than recrimination.

What has happened since decisions to proceed were taken in May?

At the time this inews article was published in May, EDDC seemed intent on conducting an external investigation looking into the circumstances around Humphreys from 2016, when he was first arrested to the point when he was convicted and jailed in August 2021. The Chief Executive, Mark Williams, was tasked with investigating how this might be done.

In June Mark Williams is quoted as saying “Rushing something as important as this is, in my opinion, inappropriate.”

Then, in the September cabinet meeting, at short notice, Mark Williams outlined reasons why he now advised against a separate independent investigation and requested an extraordinary consultative meeting (EGM) to consider this.

He indicated that, in his opinion, the council should be focusing its attention on the future, rather than rake over old ground. “That’s why I don’t think it would be a proportionate use of public money merely to sort of focus in on Humphreys.”  

Council is now to consider two options

This crucial meeting is now scheduled to be held online on Wednesday 28 September at 6.00pm.

The council will be asked to decide between two options

Option (A) This Council hereby commissions Verita [an independent investigations company] to carry out an independent investigation in accordance with Verita’s proposal attached (“the Investigation”) and instructs Simon Davey the Strategic Lead for Finance immediately to complete (or authorise completion of) the contract and any necessary paperwork with Verita; Approves a budget of up to £45,000 (exc VAT) for the Investigation. ……[Veritas to work through Lead for Strategic Finance and Cllrs Ian Thomas (Chair), Sarah Jackson (portfolio holder for Democracy and Transparency) and Jess Bailey].

In brief, this is a proposal to conduct an investigation with the aim of establishing a timeline of what was known, to understand what decision-making processes were involved and the extent that Humphreys was considered a safeguarding risk, to determine whether any improvements could be made and to flag up any other significant issues that arise. [View full Verita proposal here]

Option (B) That Council approves a budget of £45,000 and that a Legal 500 recommended firm of Solicitors is appointed in accordance with contract standing orders to undertake an investigation and report which will provide the Council with a full understanding of the legal issues and implications arising from the investigation, prosecution and conviction of John Humphreys as far as it relates to the role of EDDC and its officers and members and that delegated authority be given to one of the statutory officers, in consultation with the Portfolio Holders for Council & Corporate Coordination and Democracy, Transparency & Communications, to progress the investigation.

In brief, this looks like an officer led, administrative review of procedures and legal issues concerning the council, focusing on the future.

Comment: Owl doesn’t see how you can look to the future (Option B) without having fully understood what lessons needed to be learned from the past (Option A).

Candour and transparency

It is now six years since Humphreys was arrested and a year since he was convicted. Despite his very long sentence, reflecting the gravity of his crime, there has been very little press coverage. Information has emerged piecemeal but only when someone has had the courage not just to ask questions, but to press them. For example, it was only after a question from Cllr Paul Arnott on 4 May asking for clarification that Simon Jupp MP issued the following statement saying

 “For less than two months in 2019, I lived at a flat owned by Mr Humphreys but was completely unaware of his abhorrent crimes for which he was jailed in August 2021.

“I deplore his actions. Had I known anything about his crimes, I would not have lived at the property and would have immediately reported my concerns to the police.”

At that time the local Tory party was very much in “No Comment” mode.  Over a year since Humphreys’ conviction we can, at last, see a formal “nothing to see here” response from them dated 7 September.

Would it be unfair for Owl to describe all this as foot dragging?

Administrative inertia?

Reading between the lines it looks as if a few feathers have been ruffled in trying to set up an inquiry.

Given the persistent reluctance, to date, to grasp this problem with urgency, frankly this is a good sign.

Note these quotes from the agenda papers “Report”, para 12, page 7.

“Cllr Bailey did not discuss her proposal with any of the statutory officers. We have highlighted our concerns to Cllr Bailey in correspondence but in summary form, having reviewed the Verita website, the Verita proposal and also read the report that Verita did for the Green Party, it does not suggest that Verita have relevant legal expertise and knowledge or experience of local government to warrant an exemption being made to contract standing orders. For example, the aim of investigation section displays a fundamental misunderstanding in that it assumes the Council was in the position (assuming it had knowledge) to take decisions in relation to John Humphreys continuing as a councillor.”

[Despite Mark Williams comments above, see here for Verita’s credentials and track record for conducting sensitive investigations of this sort, particularly for the Green Party, see here, and form your own view. It is worth mentioning that Cllr Jess Bailey is a member of the Law Society].

Followed by this general “put down” :

My reflection on what has been said so far in Cabinet and Council is that members are not sufficiently sighted on the legal framework, issues and implications of this issue. 

However, the briefing pack contains Counsel’s advice “In the Matter of John Humphrey” commissioned by Mark Williams. 

The Council the power but has it the will?

The “bottom line” from this legal advice is that the Council does have power to undertake an investigation, provided it is reasonable to do so and follows the advice given in para 21 with its scope observing the principles outlined in paras 16 and 23 to 28.

Footnote:

In June, Cllr Jess Bailey, formally asked when concerns were first raised with Devon County Council about John Humphreys and what action had been taken to keep children safe.

In a written response, Cllr Leadbetter (Cabinet member for Children’s Services and Schools) said: “I can confirm that the Local Authority Designated Officer (LADO) received a referral via the NSPCC in 2014. As part of the LADO process, our officers discussed the case with the police. The police were already aware of the individual and the allegations that had been made, and advised us that there was not enough evidence to investigate further, and it was agreed that no further action would be taken.

Owl understands that Devon County Council is now conducting its own investigation but the Devon and Cornwall Police Force is not.

Liz Truss chief of staff Mark Fullbrook is paid through his lobbying company

The prime minister’s chief of staff is being paid through his lobbying company in a highly unusual arrangement that could allow him to pay less tax.

Gabriel Pogrund www.thetimes.co.uk

Mark Fullbrook insists he is not being paid through his company for tax reasons and has obtained no tax benefit from the arrangement. However, he is refusing to explain the agreement that lets him direct government strategy without being directly employed by the government.

Previous holders of the role have been treated like any other special adviser (Spad), appointed on a temporary civil service contract and paid a salary that is made public. Fullbrook is instead a contractor and will receive any payment through Fullbrook Strategies, a private lobbying company he created in April but which he says has suspended commercial activities.

One Whitehall source said it was “unheard of” for a No 10 official of his seniority to be employed in this way although Fullbrook disputed this. It is unclear what the implications of the arrangement are from a financial and transparency perspective.

Between April and June, according to the Office of the Registrar of Consultant Lobbyists, Fullbrook’s company contacted the government on behalf of clients including the Libyan House of Representatives, which is opposed by the West and the UN, an energy provider and a PPE firm linked to a fundamentalist Christian sect.

It announced it had “suspended” its commercial activities earlier this month after Fullbrook was appointed by Liz Truss to be her top aide.

However he is continuing to use it as a vehicle to receive his publicly funded salary. The equivalent post under Boris Johnson carried a salary of £140,000.

The arrangement will lead to questions days after No 10 scrapped the so-called IR35 reforms of previous Conservative governments that were designed to stop people paying themselves via a company to avoid tax.

In 2019, HM Revenue & Customs (HMRC) won a case against BBC presenters who were told to pay back hundreds of thousands of pounds in tax after working via personal service companies when they were employees in all but name.

In 2017 and 2021, the Treasury introduced measures that made employers responsible for determining the tax status of workers who provided their services through a company.

They were required to decide if a person was a freelance contractor, meaning they could pay corporation or dividend tax on any earnings, or whether they were effectively an employee and liable for income tax. Employers who got it wrong were required to pay tax, penalties and interest.

On Friday, Kwasi Kwarteng, the chancellor, said the burden would once again fall on employees to determine their own status, with critics saying the system would become vulnerable to abuse.

Dan Neidle, a tax expert and the founder of Tax Policy Associates, said he could not fathom any reason for Fullbrook’s arrangement. “I don’t understand why someone would do it,” he said. “Before yesterday, responsibility for applying IR35 [rules] — and liability for getting it wrong — would have fallen on the civil service. I’d expect them to take a very conservative view.

“The effect of the budget change is that Fullbrook gets to decide himself. Of course [it is] subject to later HMRC challenge, but it still gives him an ability to take a more aggressive view than the civil service would have permitted.”

Fullbrook is already facing questions after The Sunday Times revealed he had been interviewed by FBI agents in connection with an alleged criminal conspiracy to bribe a US politician and influence the outcome of an election in Puerto Rico.

He has since signed an agreement with US law enforcement and is co-operating as a witness. It is understood that he is not under investigation. He denies any knowledge of the bribe and in a statement says he is “confident” he behaved within the law at all times.

According to the Institute for Government, Spads are appointed as temporary civil servants. They are given contracts and their employment and salary band is published by the Cabinet Office annually. After leaving government they are required to inform the appointments watchdog of any private sector appointments.

A former No 10 insider said some Spads had in the past “topped up” their salaries by receiving extra income from Conservative Party Headquarters as they provided party political, as well as policy, advice.

Edward Lister, previously Johnson’s principal strategic adviser and now Baron Udny-Lister, continued to be paid for consultancy by a property developer while in Downing Street. But the ex-No 10 source also said there was no precedent for Spads being paid for their government work primarily through a consultancy company.

It is unclear whether Fullbrook’s salary will be reported as standard and whether being paid through his company could alter the usual terms of a Spad’s employment in any other way.

A spokesman for Fullbrook said: “This is not an unusual arrangement. It was not put in place for tax purposes and Mr Fullbrook derives no tax benefit from it.”

A government source said: “It is not unusual for a special adviser or civil servant to join government on secondment. Any government employee hired on secondment is subject to the usual special adviser or civil service codes.”