Markus Andrews

Living standards for many Britons will continue to fall following Rishi Sunak’s Budget, after a decade of austerity which has seen average wages grow by 40 per cent less than expected before the financial crash, a respected economic thinktank has found.The Institute for Fiscal Studies said that the chancellor had used Wednesday’s statement to reverse many of the cuts in public spending imposed by successive Conservative-led administrations since 2010, in a package which owed more to Gordon Brown than George Osborne.But IFS director Paul Johnson said there will be little in the way of “feelgood factor” for voters, with middle-income households set to see a fall in their disposable income and living standards for others barely rising at all.Meanwhile, the childless unemployed – who have lost their £20-a-week Universal Credit uplift payments but do not benefit from Mr Sunak’s £2bn handout for claimants in low-paid work – are left in a “precarious” situation, with half a century of static benefits leaving their living standards “dramatically trailing those of the working majority”.Despite the chancellor’s claims, Mr Johnson said that the decision to raise taxes to a record sustained level and to increase the size of the state to a scale last seen in the early 1980s was “almost entirely unrelated” to the costs of the Covid pandemic.And he said that Brexit was more to blame than coronavirus for the high inflation, rising taxes and poor growth which will hit living standards over the coming years.Instead, Mr Sunak was responding to the ever-growing demands of the NHS and to the “increasingly dire plight” of other public services like justice, social care and prisons, which had been “starved of funding for a decade”.The “staggering” scale of the impact of austerity policies since the 2008 financial crash was starkly exposed in the IFS calculation that “average gross earnings could have been some 40 per cent higher had pre-crisis trends continued”.The massive hit to wages was the result of government policy over the past decade which prioritised the value of assets like stocks, shares and property over income from work, the thinktank said.And it warned: “The primacy of asset accumulation, and the importance of asset holdings, over the possibility of getting better-off through earnings, is being maintained well into a second decade.”Mr Johnson said that 2021 would go down in history as a key moment for tax-and-spend policies, when a Conservative chancellor raised taxes by £40bn, putting it on a path to a record 36 per cent of GDP, and when public spending was returned to the levels inherited by Margaret Thatcher when she came to power in 1979.Mr Sunak has set aside enough cash to afford a £7bn pre-election tax giveaway, said Mr Johnson.But this was not a “huge or comfortable” fiscal cushion and will be vulnerable to unforeseen hits to borrowing or debt which could swallow up his election war-chest.“The worry for the government is that, for all the chancellor’s upbeat delivery, the voters may not get much feelgood factor,” said the IFS boss. “High inflation, rising taxes, and poor growth, still undermined more by Brexit than by the pandemic, will see real living standards barely rising and, for many, falling over the next year.” More

France has detained a British trawler fishing in waters off its coast, amid an escalating dispute over fishing rights.Two English ships were fined during checks off Le Havre, a port in France’s Normandy region, French maritime minister Annick Girardin said in a statement release on Thursday.“This Wednesday, two English ships were fined during classic checks off Le Havre. The first did not comply spontaneously… the second did not have a licence to fish in our waters”, the statement said.The French minister added that the ship was “diverted to the quay and handed over to the judicial authority”.UK environment and fisheries secretary George Eustice said in response to an urgent parliamentary question on Thursday morning that the government understood that the vessel was still being detained.The incident is the latest in a feud between Britain and France over fishing rights post Brexit.Multiple checks on fishing vessels off Le Havre were conducted overnight by French maritime gendarmes, according to the French maritime ministry.France is angry with the UK as it has not granted its fishermen the full number of licenses to operate inside British waters. The country said it would impose retaliatory measures that could come into effect from 2 November if there is no progress in talks between the countries.France said it would bar British fishing boats from some French ports starting next week if there is no deal.The country suggested it could restrict energy supplies to the Channel Islands as well, reported the Associated Press.France could also increase customs checks for goods that enter Europe through its borders and stop British fishing boats from unloading in its ports, according to the French government.French officials have said that Britain has failed to honour its word over fishing since Brexit, reported Reuters. Another contention is Britain’s demand to renegotiate the Northern Ireland protocol that aims to maintain the integrity of the European Union (EU) single market.Britain, on the other hand, said it has issued fishing licenses to vessels with a track record of operating in its waters in the years up to its withdrawal from the EU on 31 January 2020. More

Rishi Sunak has laughed off warnings from his own budget watchdog that Brexit is damaging the British economy.The chancellor bizarrely claimed Britain’s departure from the EU was “five years ago” and said the government was capitalising on benefits of the UK departure – despite evidence to the contrary.The UK left the EU at the end of January last year, with a transition period keeping the economic situation unchanged until 1 January this year. As a result the economic effects of the UK’s departure have hit this year.Mr Sunak’s Office for Budget Responsibility warned that Brexit was doing twice as much long-term damage to the economy as the Covid-19 pandemic was, and had exacerbated the supply chain crisis hitting the UK.But asked during a radio interview about the negative impact of his government’s policy on living standards, Mr Sunak laughed, and said: “I think we’ve had all these debates multiple times, and I think this at this point now is five years ago.”Pushed on the OBR’s assessment of the damage government policy was doing, Mr Sunak said: “That’s their view. What I’m doing is making sure that we capitalise on the opportunities that Brexit has brought.”He told the BBC: “We’ll be doing a lot on the trade agenda, and we’re seeing the benefits of that will bring to the economy, and our ability to sign trade deals around the country. “Whether it’s creating new freeports in places like Teesside or Humberside or Southampton we’re able to drive growth and create jobs in these types of areas. “Or yesterday we were able to reform some of our taxes, like alcohol duties in a way which we couldn’t before is that actually that that is going to be a simpler system. “Mr Sunak claimed the policies were “reforms that we couldn’t have done inside the EU”, adding: “I’m glad we could do them.”But the trade deals referenced by Mr Sunak are expected by the government’s own forecasts to have a negligible impact on the UK economy. The Department for International Trade admits that a recent deal announced with New Zealand could actually see the UK economy shrink due to the damage it will do to British farming communities.Meanwhile the OBR says the main effect of Mr Sunak’s new freeports “will be to alter the location rather than the volume of economic activity”. In documents released alongside Mr Sunak’s budget the OBR: “Supply bottlenecks have been exacerbated by changes in the migration and trading regimes following Brexit.”Energy prices have soared, labour shortages have emerged in some occupations, and there have been blockages in some supply chains.”Paul Johnson, director of the respected Institute for Fiscal Studies think-tank, told BBC News: “You will also see in the OBR document evidence of quite a big reduction in trade with the European Union, so the continued impact of the additional trade barriers that we have with the European Union is taking its toll on business as well.”Mr Johnson also said the OBR’s estimated reduction in trade, productivity, and living standards from Brexit was “bigger than the expected long-run effect of the pandemic”. More

Sudan’s strongman fired at least six ambassadors, including the envoys to the U.S., the European Union and France after they condemned the military’s takeover of the country, a military official said Thursday.The diplomats pledged their support for the now-deposed government of Prime Minister Abddalla Hamdok.Also fired by Gen Abdel-Fattah Buran late Wednesday were the Sudanese ambassadors to Qatar, China and the U.N. mission in Geneva according to the official, who spoke on condition of anonymity because he was not authorized to brief media. The state-run Sudan TV also reported the dismissals.The ambassadors were fired three days after Burhan dissolved the transitional government and detained the prime minister, many government officials and political leaders in a coup condemned by the U.S. and the West. The military allowed Hamdok to return home Tuesday after international pressure for his release.Burhan said the military forces were compelled to take over because of quarrels between political parties that he claimed could lead to civil war. However, the coup also comes just weeks before Burhan would have had to hand over the leadership of the Sovereign Council, the ultimate decision-maker in Sudan, to a civilian, in a step that would reduce the military’s hold on the country. The council has military and civilian members. Hamdok’s government ran Sudan’s daily affairs.The coup threatens to halt Sudan’s fitful transition to democracy, which began after the 2019 ouster of long-time ruler Omar al-Bashir and his Islamist government in a popular uprising.The takeover came after weeks of mounting tensions between military and civilian leaders over the course and pace of that process.Ali bin Yahia, Sudan’s envoy in Geneva, was defiant after his dismissal. “I will spare no efforts to reverse the situation, explain facts and resist the blackout imposed by coup officials on what is happened my beloved country,” he said in video comments posted online.Nureldin Satti, the Sudanese envoy to the U.S., said Tuesday he was working with Sudanese diplomats in Brussels, Paris, Geneva and New York to “resist the military coup in support of the heroic struggle of the Sudanese people” to achieve the aims of the uprising against al-Bashir.Earlier this week, a group of over 30 Sudanese diplomats in and outside Sudan condemned the military’s takeover in a joint statement, saying that the ambassadors in Belgium, Switzerland and France had pledged their continued allegiance to the Hamdok government.The Ministry of Culture and Information, still loyal to Hamdok, said in a Facebook post that the ambassador to South Africa is also part of this group.In another development, Burhan fired Adlan Ibrahim, head of the country’s Civil Aviation Authority, according to the official. Adlan’s dismissal came after the resumption of flights in and out of Khartoum’s international airport resumed Wednesday. It was not immediately clear if Ibrahim’s dismissal was linked to the reopening of the airport or whether the decision was made before then. The airport remained open Thursday morning.The country’s Civil Aviation Authority initially said flights would be suspended until Saturday, the day of a planned mass protest against the coup, but then reopened the airport Wednesday.Protesters, meanwhile, took to the streets of Khartoum and its twin city of Omdurman late Wednesday in continued demonstrations against the coup amid heavy security across the capital.No casualties were reported, but a young man died in a Khartoum hospital late Wednesday of wounds sustained in Monday’s protests, according to activist Nazim Siraj.This raised to seven the number of protesters killed since Monday. More than 140 people have been wounded since the military’s takeover, according the activist. More

Families face five years of “stagnant” standards of living after a Budget which restored some of the cash cut from public services over the past 11 years of Conservative governments but did little to address Britain’s cost-of-living crisis.Chancellor Rishi Sunak said that his first budget since the removal of Covid restrictions would lay the foundations for “an economy for a new age of optimism” as the UK emerges from the pandemic.Taking advantage of a £35bn windfall from improved economic forecasts, he announced additional annual spending of £25bn by 2022-23, with all Whitehall departments receiving real-terms increases in their budgets in what amounted to a giveaway package after a decade of austerity. He also hiked the national living wage by 6.6 per cent to £9.50 an hour, benefitting 2 million low-paid workers. And he slashed £7bn from business rates, including a 50 per cent one-year discount for the retail, hospitality, and leisure sectors, which have been among those hit hardest by Covid.But there was no help for families with escalating heating and food bills, as gas prices soar to record levels and inflation expectations were upgraded to 5 per cent. And a £2bn boost to universal credit – cutting taper rates to allow working claimants to keep more of what they earn – fell far short of replacing the £6bn slashed from the benefit only last month, when Mr Sunak removed the £20-a-week uplift introduced to help the poorest households through the pandemic.The chancellor also came under fire from environmentalists for freezing petrol duties for the 12th year in succession and for cutting tax on domestic flights, just days before the United Nations Cop26 climate change summit in Glasgow is set to begin.Environmental charity the WWF said the moves “take us headlong in the wrong direction when it comes to tackling the climate and nature crisis”.In the biggest overhaul of alcohol duties for 140 years, Mr Sunak cut 3p from the price of a pint of beer drunk in a pub, but increased duties on high-strength beers and ciders to match those on spirits, while removing a long-standing premium on sparking wines like champagne and prosecco.Mr Sunak told the House of Commons that his autumn budget “delivers a stronger economy for the British people. Stronger growth, with the UK recovering faster than our major competitors. Stronger public finances, with our debt under control. Stronger employment, with fewer people out of work and more people in work.”But Labour’s shadow chancellor Rachel Reeves denounced the package as “a classic con game”, saying that the 1.25 per cent hike in national insurance rates for employers and employees, intended to pay for the NHS and social care, was announced in advance to make the Budget itself seem more generous.“The chancellor in this Budget has decided to cut taxes for banks,” said Ms Reeves. “So at least the bankers on short-haul flights sipping champagne will be cheering this budget today.“And the arrogance, after taking £6bn out of the pockets of some of the poorest people in this country, expecting them to cheer today for £2bn given to compensate. In the long story of this parliament, never has a chancellor asked the British people to pay so much for so little.”The director of the independent Institute for Fiscal Studies (IFS) think tank, Paul Johnson, said that household incomes were projected to be “pretty stagnant” over the next five years, with real growth of less than one percentage point per year over the period. Middle earners are set for a 1 per cent fall in the value of their take-home pay next year.“That’s partly because of inflation, that’s partly because of the big tax rises that we’ve seen imposed, that’s partly because growth is so poor,” said Mr Johnson. “And that’s really very disappointing because, remember, we’ve had a decade of pretty stagnant living standards.”He warned: “Those almost non-existent increases in living standards over the next half-decade are a big blow to all households, and families of course, but they can also have a big impact on politics.”The CEO of tax and advisory firm Blick Rothenberg, Nimesh Shah, said that taking into account changes to tax rates, allowances and thresholds announced earlier in the year, a family of four with one working parent earning £62,000 will be £649 worse off per annum in 2022-23 than in 2010-11.Mr Shah said: “There was some limited respite for families – freezing of fuel duty, an increase in the national living wage to £9.50, and a change to the mechanism for tapering universal credit. But it doesn’t go far enough, especially with a 1.25 per cent increase to national insurance coming next April.”And TUC general secretary Frances O’Grady said families were still facing “a triple whammy of a £1,000 universal credit cut, tax hikes and fast-rising energy and food bills”.“The chancellor has gone from pay freeze to pay squeeze,” said Ms O’Grady. “The chancellor admitted that we will have zero pay growth across the economy next year. And he has no plan to get real wages rising for everyone after an 11-year pay squeeze, with average real pay growth over the next four years predicted to be just 0.3 per cent.”Mr Sunak was given leeway for generous increases in the budgets of Whitehall departments by significantly improved forecasts from the Office for Budget Responsibility (OBR).The independent forecaster upgraded its 2021 growth projection from 4 per cent in March to 6.5 per cent now, while cutting the predicted unemployment peak from 6.5 per cent to just 5.25 per cent this winter, thanks to a stronger-than-expected recovery from Covid.The OBR’s forecast for medium-term “scarring” to the UK economy from the pandemic was adjusted downwards from 3 to 2 per cent of GDP. And borrowing this year was revised down by just over £50bn – though it is still forecast to be £183bn, higher than in any year outside wartime except for during the financial crisis and the Covid pandemic.Some £15bn a year from the £35bn windfall was directed to spending departments, including health, transport and “levelling up” – though the money was front-loaded to deliver a pre-election bonanza in the years 2022-24 before being reined in sharply after the general election, which is expected to be held in 2024.The remaining £20bn was held back to help the chancellor meet new fiscal rules to stop borrowing for day-to-day spending and to put debt as a percentage of GDP on a downward path within three years.Mr Sunak also prepared the ground for pre-election tax sweeteners, saying his goal was to cut the overall tax burden – with taxes currently at their highest level since the 1960s as a proportion of GDP – by the end of the parliament. He went further in a meeting of the 1922 Committee of Tory backbenchers by telling them he wants to use “every marginal pound” in the future to lower taxes rather than increase spending.Aides declined to say how this would be done, but indicated that the chancellor would aim to use any changes to reward work.The Liberal Democrats said that a cut from 8 to 3 per cent in the banking surcharge announced by Mr Sunak would cost the Treasury £3.8bn over the next four years, compared to £1.8bn of catch-up funding for schools in today’s budget.Party leader Ed Davey said: “This was an out-of-touch Budget that is taking ordinary families for granted, hiking up people’s taxes while failing to help them with soaring energy bills this winter. We’ve seen a lot of spin, but very little on the three big crises we face: the cost of living, the climate emergency and children’s lost learning.“Parents are crying out for the catch-up funding our children desperately need. The chancellor let them down today, offering less in extra catch-up funding than his tax cut for the big banks.” More

A climate campaigner from the organisation Ocean Rebellion dressed as Boris Johnson and set fire to a boat in Glasgow to protest against the use of fossil fuels.The protester, part of the Extinction Rebellion affiliated group, wore a false head designed to look like the prime minister while setting light to the prop with the words “Your Children’s Future” outside the Cop26 venue.The campaigners, including an “Oilhead” character with a petrol can mask, also burned stacks of fake money during the protest on the banks of the River Clyde in Glasgow, opposite the site of the upcoming Cop26 conference.They said they were protesting against the “UK Government’s total lack of purpose in combating catastrophic climate change, ocean acidification and biodiversity loss that will devastate all our futures and leave a dead ocean for future generations”.Floss Stallard, a member of Ocean Rebellion, called for the Cambo oil field, situated west of Shetland, to be scrapped.She said: “The Cambo oil field is a continuation of bowing to fossil fuel industry pressure. We need to wean humanity off oil, not dig more wells.”Ocean Rebellion was launched in August 2020, created by a small group active in Extinction Rebellion. More

Unlike several chancellors who went before him, teetotaller Rishi Sunak chose water over alcohol today as he delivered his Budget to MPs in the Commons – but there was a boost for drinkers as he announced plans to slash duty on alcohol, meaning cheaper pints from as early as Wednesday night.But some observers joked that Mr Sunak must have been drunk on something by announcing a cut to air passenger duty ahead of the crucial Cop26 climate talks in Glasgow next week, where Boris Johnson is tasked with getting world leaders to agree on new targets to reduce emissions, improving on those set out in the 2015 Paris Agreement.Archaic parliamentary rules dictate that chancellors are allowed to have a drink as they set out their spending agenda. And many former occupants of 11 Downing Street have availed of the opportunity to have a sip on their favourite tipple to settle the nerves before revealing how they plan to spend taxpayers’ hard-earned cash.Whisky was the poison of choice for former Tory chancellor Kenneth Clarke. Before him, Nigel Lawson, Margaret Thatcher’s No 2, opted for a variety including Ashbourne Water and a mixture of wine and Malvern water. Hugh Dalton, the former Labour chancellor, went for a rum and coke.However, more recently, austere chancellors such as Labour’s Gordon Brown and Theresa May’s former Downing Street partner, Phil “spreadsheet” Hammond – keen to project a PR friendly image to the public – played things safe by staying on the H2O.Historians, academics and experts are stumped on where the parliamentary rule comes from and there is very little written about the tradition, which allows chancellors to have a drink at the dispatch box on Budget day only.In his 1995 Budget speech, Mr Clarke was cheered by his Conservative colleagues as he took a sip of scotch before announcing cuts to duty on whisky and a freeze on wine and beer duty. In a bygone era, speculation was usually rife as to what alcoholic drink the chancellor might choose on budget day, with bookmakers taking bets on what brand might appear at the dispatch box.While more recent Budget days have tended to be “dry” affairs with the chancellor more likely to have a glass of water rather whisky at their side, there is still fun to be had for punters who fancy a flutter.Gamblers can get odds on how many sips of water the chancellor might take of said beverage, how long the speech might go on for and how many times  they are expected to mention words such as “tax”, Mr or Mdm speaker and “British people”.Budget day drinking is just one of many old and odd traditions in British parliament. When a new Speaker of the House is elected, the successful candidate is physically dragged to the chair – currently occupied by Sir Lindsay Hoyle – by other MPs.According to parliament’s website, “this custom has its roots in the Speaker’s function to communicate the Commons’ opinions to the monarch.”“Historically, if the monarch didn’t agree with the message being communicated then the early death of the Speaker could follow. Therefore, as you can imagine, previous Speakers required some gentle persuasion to accept the post,” it adds.A host of words are banned in the Commons, some of them seemingly more innocuous than others. “Blackguard”, “pipsqueak” and “pecksniffian” are said to be some of the words that can get MPs thrown out of the Commons.It is also against the rules for MPs to accuse their colleagues of being liars, as Labour’s Dawn Butler found out to her cost as recently as July. The MP for Brent Central was ordered to leave the chamber after she refused to retract allegations that Boris Johnson, the prime minister, is a liar.  Dennis Skinner, the former Labour MP for Bolsover, was also ejected for making a similar accusation against ex-PM David Cameron.Another bizarre procedure bans MPs to talk about the Lords in the Commons. More

The UK has said it will retaliate in “an appropriate and calibrated” manner if France follows through with its threats to impose sanctions amid a dispute over fishing licences.Downing Street responded angrily to a warning from the French government that it could ban British seafood imports and could even cut the supply of energy to the Channel Islands.Paris also suggested it would block British boats from certain ports, unless the UK released more fishing permits by Tuesday.Emmanuel Macron’s government has been angered by what it perceives to be the limited number of licences given to French fishermen to operate in the UK’s waters, including those around the island of Jersey, which is a British Crown Dependency.Lord Frost, the Brexit minister, said it was “disappointing” that France had decided to make such threats.“As we have had no formal communication from the French government on this matter we will be seeking urgent clarification of their plans. We will consider what further action is necessary in that light,” the prime minister’s former lead Brexit negotiator said.A government spokesperson called France’s threats “disappointing and disproportionate”, claiming they went against the Brexit agreement as well as international law.The UK has approved 98 per cent of licence applications from EU vessels, they added.However, France government spokesperson Gabriel Attal said that France has only half “of the licences to which we have the right”, according to The Times. The UK says the permits require proof that French vessels fished in British waters prior to Brexit.“Our patience is reaching its limits,” Mr Attal told Reuters, adding the French government will not allow Britain to “wipe its shoes on the Brexit deal”.France is drawing up a list of potential sanctions against the UK, which could be published on Thursday, according to Mr Attal. The country’s ultimatum against Britain comes after ten other EU countries united with France two weeks ago to condemn Boris Johnson’s approach to post-Brexit fishing rights. More