Markus Andrews

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailLocal authorities in England are set to receive an emergency bailout from Rishi Sunak’s government following warnings that many councils are close to bankruptcy.A ministerial statement due to be made this afternoon will confirm upper tier councils will be handed an additional £500m for children’s and adult social care.Communities secretary Michael Gove is also expected to announce lower tier districts will receive a funding boost of approximately £30 to £40m.A senior council source said an 11th hour change to local finance settlement was unusual – but could stave off the immediate threat of bankruptcy faced in many areas.The move comes after a group of 40 Tory MPs – including Priti Patel and Robert Jenrick – put Mr Sunak under pressure to boost the £64bn funding settlement for on-the-brink councils ahead of this year’s general election.Dozens of backbenchers signed a letter to the PM warning that without emergency cash, many councils will be forced to cut crucial frontline services and hike council tax as voters go to the polls.The group – which also included leading ‘One Nation’ Tory moderate Damian Green – say they were “exceptionally concerned” about the crisis in local government and were “disappointed” it had not be addressed at chancellor Jeremy Hunt’s autumn statement.Sunak and his communities secretary Michael Gove under pressure from Tory MPs Ben Bradley, the Tory MP for Mansfield and leader of Nottinghamshire County Council, had urged Mr Sunak and Mr Gove to provide extra cash. “There’s no point cutting national taxes just to see everybody’s council tax go up by the maximum,” he said.Mr Hunt could consider using some of the fiscal headroom – which predictions have put as high as £10bn – to cave to their demands for more council cash as he prepares for his 6 March Budget.While welcoming the extra cash, council chiefs believe that the new, last-minute extra £500m will only prevent a financial crisis in the short term. Finance bosses at seven councils have issued at least one section 114 notice – effectively declaring themselves bankrupt – since 2020, with three doing so last year.In December Nottingham City Council became the latest to issue a section 114 notice, saying it was set to overspend by £23m in 2023-24.But almost one in five council leaders think it is likely that they will need to issue a section 114 notice this year, according to a survey by the Local Government Association (LGA).The emergency notices are an acknowledgment that the local authority cannot balance its books as required by law and lead to a freeze on non-essential spending on services.Mr Gove’s Department of Levelling Up, Housing and Communities said the £64bn pledged was a real-terms increase of 6.5 per cent for councils on average.However, the total spending power available to councils includes council tax increases, meaning residents pay more for everyday services.District council leaders also held an emergency meeting in Westminster on Tuesday to urge the government to rethink the settlement due to the rising costs of tacking homelessness.A group of local authorities said Mr Gove’s funding settlement disproportionately benefits richer areas and fail to take into account a range of growing demand pressures.Sigoma – which represents 47 urban councils in some of the most deprived areas in England – said it was set before the full emergence of severe problems such as workforce pressures and spiralling costs in a “broken” children’s social care market. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailWatch as Rishi Sunak faces Prime Minister’s Questions on Wednesday, 24 January, after a senior Tory called for his resignation.Sir Simon Clarke, who served in the Treasury while the now-prime minister was chancellor, said that Mr Sunak “is leading the Conservatives into an election where [they] will be massacred”.“If we change the leader to a prime minister who shares the instincts of the majority and is willing to lead the country in the right direction, we will recover strongly in 2024,” the MP for Middlesbrough South and East Cleveland wrote in the Telegraph.Other senior Tories have warned against more damaging infighting before the public go to the polls this year.Home secretary James Cleverly said it would be “foolish” to have further dissent within the party, arguing that it would leave the door open to Sir Keir Starmer and the Labour party.Former defence secretary Ben Wallace echoed Mr Cleverly in dismissing Sir Simon’s call to oust Mr Sunak.“Division and another PM would lead to the certain loss of power,” he said. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailJeremy Hunt’s economic forecasts last year were based on “questionable assumptions” and beyond “a work of fiction”, the public finance watchdog has warned.Richard Hughes, chair of the Office for Budget Responsibility, made the scathing intervention at the House of Lords economic affairs committee yesterday, warning the chancellor had left himself a “tiny” margin for error against the UK government’s debt-reduction rules.Mr Hughes said that policymaking could be improved if chancellors gave themselves a larger margin for error, warning that the current projected headroom “is very small relative to the forecast errors inherent in any forecasting process, including ours”.He said that the £13bn budget headroom forecast in November for the autumn statement was vulnerable to changing assumptions on interest rates and data revisions.Mr Hughes also said that he was disappointed that he was asked to provide a forecast to be published alongside Jeremy Hunt’s autumn statement back in November without being given any information about Whitehall departmental budgets, apart from a headline figure that showed them having fallen over five years.Office for Budget Responsibility provide a forecast to assist the Chancellor in his upcoming budget He told the Committee that the OBR’s forecasts were based on “questionable assumptions” and that some people called his projections “a work of fiction”.He said November’s estimates were “a tiny number compared to the risks you face” and that historically, UK governments have tended to go “very close to the wire” when it came to fiscal rules.The headroom figure is a measure of how much budgetary margin Hunt has to meet his target of reducing the ratio of government debt to GDP in five years’ time, and is vital for determining the extent to which the government can cut taxes or increase public spending.Fresh speculation around the prospect of tax giveaways has been high this week, as both Mr Hunt and Rishi Sunak have stoked up expectations that government may have use the expected headroom for tax cuts.Last week at the World Economic Forum conference in Davos, Switzerland, Mr Hunt hinted heavily that more tax cuts are on the way, saying that tax cuts would be “very pro-growth”.Mr Hunt hinted at the prospect of tax cuts during his visit to Davos last week Official figures released on Friday showed that Hunt may have as much as £20bn spare in his March budget, based on higher-than-expected tax receipts and lower inflation and reductions in interest rates.The government is expected to use this windfall to commit to tax cuts rather than large increases of public spending, in order to satiate demands from the right of the Conservative party and stoke favour with the public in the run up to a general election.The Treasury said: “While we have doubled our headroom since March, from £6.5 billion to £13 billion, it remains low by historical standards and can be wiped out by changing economic conditions.” It added: “That’s why we must stick to our plan to reduce debt by growing the economy and being responsible with spending.” More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailDavid Cameron will meet Israeli and Palestinian leaders during a visit to the Middle East in a bid to ease the “desperate” situation in Gaza. The foreign secretary will hold talks with Benjamin Netanyahu in which he will raise concerns about the high number of civilian casualties and call for more and faster action to get life-saving aid into the besieged enclave. He is also expected to press the need for water, fuel and electricity to be restored as he calls for an “urgent humanitarian pause” . And he will reiterate demands that Hamas agree to release of all hostages and give up control of Gaza, as well as hold talks with Qatar and Turkey. He will arrive in the Middle East as tensions run high, following deadliest day for Israeli forces of the Gaza war. President Netanyahu is also facing increasing pressure over his leadership and his handling of the war effort. Rishi Sunak has resisted calls to back an immediate ceasefire, arguing for ‘humanitarian pauses’ to allow politicians to build a cessation in the fighting that can last. Foreign Secretary David Cameron said: “No-one wants to see this conflict go on a moment longer than necessary. An immediate pause is now necessary to get aid in and hostages out. The situation is desperate. “This week I am in the Middle East working with partners to help build a plan to move from that pause to a sustainable, permanent ceasefire without a return to hostilities. “Such a plan would require Hamas to agree to the release of all hostages, Hamas to no longer be in charge of Gaza launching rocket attacks at Israel, and an agreement in place for the Palestinian Authority to return to Gaza in order to provide governance and services and, increasingly, security.” Twenty-four people were killed on Monday in the deadliest day for Israeli forces in its three-month war against Hamas, as Palestinian casualties also continue to climb. During his visit Lord Cameron will travel to Israel, the occupied Palestinian territories, as well as Qatar and Turkey, both key players in the region. In Israel, the Foreign Secretary will also speak to the Israeli foreign minister as he calls for more crossing points for aid to be opened for longer. Foreign secretary Lord Cameron (James Manning/PA)He will also meet President Abbas from the Palestinian Authority to highlight the UK’s long-term support for a two-state solution. In Qatar, he is expected to hold talks on efforts to secure the safe release of hostages, pressing the cases of British and dual nationals. The war has displaced an estimated 85 per cent of Gaza’s population and left more than 25,000 Palestinians dead, according to health officials in the Hamas-run territory.The United Nations and international aid agencies also warn the fighting has caused a humanitarian disaster, with a quarter of Gaza’s 2.3 million people facing starvation. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailUnavoidable hidden charges for online consumers – or “drip pricing” – is set to be banned under new laws to force businesses to be upfront with their customers.Fake reviews will also be added to a list of banned business practices, and firms will have to provide clearer labelling for prices on supermarket shelves, the Department for Business and Trade (DBT) said, following a consultation into consumer transparency.The measures will be legislated for as part of the Digital Markets, Competition and Consumers Bill as it progresses through Parliament.Drip pricing occurs when consumers are shown an initial price for an item or service, only to find additional fees are revealed later in the checkout process.Research suggested it was widespread and used by 54% of entertainment providers, across 56% of the hospitality industry, and 72% of the transport and communication sectors, the DBT said.We are committed to ensuring information given to consumers is clear and they are not misled in any wayGraham Wynn, British Retail ConsortiumUnavoidable fees cost consumers £2.2 billion every year, it added.Under the new rules, mandatory fees must be included in the headline price or at the start of the shopping process, including booking fees for cinema and train tickets.Optional fees such as airline seat and luggage upgrades for flights will not be included in the measures.Minister for Enterprise, Markets and Small Business Kevin Hollinrake said: “From supermarket shelves to digital baskets, modern day shopping provides customers with more choice than ever before. But with that comes the increased risk of confusion, scams and traps that can easily cost the public more than they had planned.“Today’s announcement demonstrates the clear steps we’re taking as a government to ensure customers can compare purchases with ease, aren’t duped by fake reviews, and have the sting of hidden fees taken away.”The DBT said reviews were found to be used by 90% of consumers and contributed to the £224 billion spent in online retail markets in 2022.The Competition and Markets Authority (CMA) has contributed to new guidance to tackle fake reviews, which would make website hosts accountable for reviews on their pages.Meanwhile, the Price Marking Order (PMO), which requires traders to display the final selling price, and where appropriate the final unit price – for example the price per kilogram – will also be reformed.The DBT said proposed changes would ensure unit pricing was consistently applied, including to promotions and special offers, to help consumers compare products easily and identify what items represent the best value.These are expected to be issued in the spring.British Retail Consortium assistant director Graham Wynn said: “The BRC looks forward to continuing to work with officials as practical detailed implementation plans are developed. We are committed to ensuring information given to consumers is clear and they are not misled in any way.”A CMA spokeswoman said: “It’s positive to see the Government pushing ahead with changes to tackle behaviour that misleads shoppers or leaves them out of pocket – which includes accepting the CMA’s recommendations for clearer groceries pricing.“Stronger laws and tools, including giving the CMA the power to fine companies for breaching consumer law under the DMCC Bill, will bolster the work we are already doing to protect consumers.” More