UK Politics

Russian oligarchs who have helped bankroll the Tory party were trying to stop Jeremy Corbyn coming to power, a government minister has claimed.James Cleverly insisted there is no need to return the cash – estimated to be nearly £2m from donors who are either Russians, or made fortunes in Russia – despite the invasion of Ukraine.Rejecting the accusation that the funding “smells a bit iffy”, the Foreign Office minister denied that any of it had come to the Conservatives from “Putin’s friends”.Instead, he said: “I imagine some of the people who have fled the oppressive regime of Vladimir Putin wanted to support a political party that, at the time, was trying to prevent Jeremy Corbyn from being prime minister.”The Labour leader at the 2019 general election had been “an apologist for the Putin regime, who had refused to accept the reality of the poisoning of British nationals by Russian agents only a few years ago”, Mr Cleverly told LBC Radio.He insisted it was no surprise that Russians, or anyone else chose to back “a political party that stood firm on the rule of law stood firm, stood firm on holding Putin into account”.And, asked if the money would now be returned, as Labour has demanded, the minister said: “There’s no reason to – the money was completely legitimate.”Boris Johnson provoked laughter in the Commons this week, when he told MPs: “It’s very important that the House understands: we do not raise money from Russian oligarchs.”Critics say this is true only in the sense that no-one with Russian nationality can be a legal donor – but the super-rich with dual UK-Russian nationality, or with significant business links in the country, have given huge sums to the Tories.The biggest donor is believed to be the financier Lubov Chernukhin, who is married to Vladimir Chernukhin, a former deputy finance minister under Putin who has given £700,000.Famously, at the Conservative Party’s winter ball two years ago, she paid £45,000 in an auction for the right to play a tennis match with Mr Johnson.Earlier, Mr Cleverly insisted “unprecedented” sanctions, about to be announced, can still reverse Russia’s decision to invade Ukraine – dismissing fears that Putin will brush them off.He argued the rouble currency is already collapsing in value, which will also have “a meaningful impact”.On sanctions, Mr Cleverly said they would “hopefully persuade people around Vladimir Putin that this is completely the wrong thing to do and he should reverse this attack”.“Even if Vladimir Putin doesn’t care, the people around him will feel this – and they absolutely do care,” the minister argued. More

A shake-up of university finance will punish poorer students while top-earning graduates pay less, ministers are being warned – as a call to bring back maintenance grants is rejected.The long-delayed response to a review ordered by Theresa May also throws out a recommendation to slash annual tuition fees from £9,250 to £7,500, made because of fears that high debt deters disadvantaged teenagers.Instead, fees will be frozen, while graduates will feel the pain of a cut in the threshold to start repayments from £27,295 a year to £25,000, to “make the system fairer for the taxpayer”, ministers say.As expected, in a further cost-cutting move, students will be blocked from taking out loans – and, effectively for all but the richest, from going to university – if they fail to get strong GCSE or A-level grades.The government will seek to sweeten the pill by scrapping interest on new loans, while a new “lifelong loan entitlement” will allow people to “retrain flexibly at any time in their lives”.But Labour described the package – three years after the Augar report was published – as “another stealth tax for new graduates”, which would be “slamming the door on opportunity”.The Education Policy Institute think tank warned it would be “regressive” and threatened to hit “students from disadvantaged backgrounds”.“These policies are likely to result in lower- to middle-earning graduates paying more than they currently do, while higher earning graduates are likely to pay less,” said David Robinson, its director of post-16 and skills.The chair of the parliamentary All-Party Group for Students, Paul Blomfield, attacked the dropping of the “important proposal for the reintroduction of maintenance grants for the poorest students”.He also warned: “Freezing tuition fees, without additional teaching grant, reduces resources available to universities and means future students will be paying more for less.”And Larissa Kennedy, president of the National Union of Students, said: “This government parrots the language of levelling up, but these proposals are classist, ableist and racist: they target those from marginalised communities, and seek to gatekeep education.”The package, which will go out to consultation, will:* Freeze maximum fees at £9,250 a year until 2025, meaning they will not have risen for seven years – while rejecting a cut to £7,500.* Cut the repayment threshold to £25,000 for students starting courses from September 2023 until 2027 – despite the backlash against the recently announced freeze.* Link the student loan interest rate to the – higher – RPI measure of inflation, scrapping interest for students from 2023, both during studies and after graduation.* Extend the period before loans are written off from 30 to 40 years for new students – meaning many will be nearing retirement before they are out of debt.* Deny loans to students who fail to achieve at least two Es at A-Level or at least a grade 4 pass in English and maths at GCSE.* Promise almost £900m of new investment in higher education over three years – including £300m of day-today spending and £450m in capital funding.Nadhim Zahawi, the education secretary, said the changes would “create a fairer system for both students and the taxpayer”, while making “higher education accessible and accountable”.“This package of reforms will ensure students are being offered a range of different pathways, whether that is higher or further education, that lead to opportunities with the best outcomes,” he said.But the document makes little attempt to hide that the motive is to save money, calling the current funding system “unsustainable” – with student loans totalling £161bn in April 2021.Without action, those loans will reach more than half a trillion pounds in 20 years, ministers say, by which point only 23 per cent of new borrowers will be repaying them in full.Taxpayers – most of whom have not been to university – are funding 44p of every pound of student loans, but will pay less than 20p under the new system, they argue.The Augar report, published in the dying days of Theresa May’s government, saw her plea for the return of maintenance grants for low-income students, axed by George Osborne in 2015.But, speaking in May 2019, the outgoing prime minister admitted it would be a decision for her successor. More

Keir Starmer is to evoke the memory of Labour’s 1960s prime minister Harold Wilson with a promise to use the “white heat of technology” to deliver an economy that works for all.In a speech in the four-time election-winner’s home town, Huddersfield, Sir Keir will quote his predecessor’s famous dictum in the latest step of his drive to reposition Labour as the party of business and growth.In his strongest effort yet to woo the private sector, he will say that no political party can succeed without a strong plan to help businesses thrive.“Britain cannot rise to the great challenges of the day without the innovation of business,” he will say. “A political party without a clear plan for making sure businesses are successful and growing, which doesn’t want them to do well and make a profit, has no hope of being a successful government.”But he will also risk alienating businesses who are reeling from the additional costs and red tape resulting from leaving the EU by repeating his pledge to “take advantage of the opportunities of Brexit”.Sir Keir will brand Boris Johnson’s Conservatives the party of high tax and low growth, pointing to April’s national insurance rise, which will bring the proportion of national income taken by the state to its highest level in 50 years.Promising to bring an end to a “decade of faltering growth” under Conservative-led administrations, the Labour leader will declare that “the days of economic fatalism are over”.In what Labour have billed as a major speech on his plans for “a new economy”, Sir Keir will set out priorities that are a far cry from the programme of nationalisation under his predecessor, Jeremy Corbyn.Labour will position the government as a partner to the private sector, put money back in people’s pockets, revitalise former industrial areas, end insecure unemployment and drive up productivity and wages, he will promise.“With Labour, Britain will once again grow,” he will say. “And from the proceeds of that growth we will build a new economy and a new Britain – one based on security, prosperity and respect for all.”Echoing Wilson, he will say: “Our country and our economy are entirely different now, but we too are going through the white heat.“We face our own revolutions in technology and industry, and it will fall to the next Labour government to shape that change so it works for all.” More

Rishi Sunak is to risk a fresh rift within the Tory party over tax by sending out a signal that he will take a cautious approach to cuts ahead of the next general election. In a speech to the Bayes Business School, the chancellor will say that any tax cuts must be “sustainable”.And he will pour scorn on low-tax advocates who argue that reductions in the state take always pay for themselves by fuelling growth. Mr Sunak’s speech comes just weeks after the MP appointed to head Boris Johnson’s Policy Unit, Andrew Griffith, said his priority in the role was to “return rapidly to the point when we can cut taxes to let everyone keep more of their own money”.Senior Tory backbencher Peter Bone told The Independent he was “disappointed” at the chancellor setting his face against calls for swift tax cuts, such as the reversal of his planned £12bn hike in national insurance (NI).Delivering the annual Mais lecture in London on Thursday, Mr Sunak will say that he wants to deliver a “low-tax, higher-growth economy” as the cornerstone of a society in which private businesses and individuals can thrive.But he will firmly reject the case for tax cuts which leave spending commitments unfunded.“I am going to deliver a lower-tax economy but I am going to do so in a responsible way, and in a way that tackles our long-term challenges,” Mr Sunak will say.“I am disheartened when I hear the flippant claim that ‘tax cuts always pay for themselves’. They do not.“Cutting tax sustainably requires hard work, prioritisation, and the willingness to make difficult and often unpopular arguments elsewhere.”His comments will unsettle traditionalist Tories already dismayed at the increase in the proportion of national income taken by the state under Mr Sunak’s stewardship to its highest level since the 1960s, when the 2.5 per cent hike in NI contributions comes into effect in April.They are hoping for deep tax cuts before the 2024 election to win back the support of voters facing a deep cost-of-living crisis in the wake of the Covid pandemic.Mr Bone – who has branded the NI rise “socialist” – told The Independent: “I’m disappointed if the chancellor doesn’t think that keeping taxes down encourages growth, which encourages more people in work, which encourages more tax revenue.“I would have thought that was something a Conservative chancellor would believe in. Quite aside from tax cuts before the election, he could start by not having this tax rise in a couple of months’ time.”In his speech, Mr Sunak will insist that he is in favour of tax cuts so long as they are “sustainable”.“I firmly believe in lower taxes,” he will say.“The most powerful case for the dynamic market economy is that it brings economic freedom and prosperity.“And the best expression of that freedom is for all of us to be able to make decisions about how to save, invest or use the money we earn.”In an apparent effort to shake off his reputation for big-state spending after borrowing £400bn to pay for Covid support, Mr Sunak will insist that he believes that money generated by work is “far better spent by individuals and businesses than government”.And he will issue a strong defence of the free market economy.“As a machine for innovation and growth the free market is positively correlated with almost everything we imagine is desirable for humanity,” the chancellor will say. “Higher living standards, greater wellbeing, longer lives lived in greater leisure, freedom and peace.”Shadow chancellor Rachel Reeves responded: “The chancellor may say he “believes” in low taxes in his lecture – but the hard facts are that Sunak has hit households and business with 15 tax rises in two years in post – with an unfair National Insurance rise down the line – and he has raised the most tax on average per budget than any chancellor in the last 50 years.“Over a decade of Tory government, the economy has grown far slower than when Labour was in power, and it is set to go even slower in the coming years.“If the Tories had matched Labour’s record on growth in government, businesses would have grown faster and people would have had higher incomes, boosting the public finances.“It is because the Conservatives are the party of low growth, that they are now the party of high tax.” More

Boris Johnson has dodged a question about reports the government has dropped plans for an import ban on fur and foie gras.The two luxury products had been due to face a trade bar as part of the government’s Animals Abroad Bill – but the policy now seems to have been ditched.Campaigners have long called for the bans as a means of improving animal welfare, but the BBC reported last week that objections from cabinet ministers have seen the ideas shelved.The newly appointed minister for Brexit opportunities, Jacob Rees-Mogg, is said to be against restricting the products, on the grounds of personal choice.And the defence secretary, Ben Wallace, is said to believe that it would make it difficult to source bear-skin hats for Guardsmen soldiers.In the House of Commons on Wednesday, the Labour MP Kerry McCarthy linked the policy change on the two luxury goods to the cost of living crisis, asking Mr Johnson: “How does the prime minister think it looks when we’re in a cost of living crisis, with our constituents struggling to put food on the table or coats on their kids backs, when members of their cabinet have thrown their toys out of the pram because they want to eat foie gras or wear fur?”But Mr Johnson avoided directly answering the question, replying in a way that avoided mentioning the policies.“We are tackling the cost of living crisis, which is caused by a global inflation spike with everything we can do. “And I thank my right honourable friend the chancellor, in particular, for what he’s doing to abate the cost of energy; lifting the living wage by the biggest ever amount; helping people on universal credit, Mr Speaker. “And the single best thing that we’ve done on the cost of living, Mr Speaker, is making sure that we’ve got millions more people into work, 430,000 more in employment now than there were before the pandemic began. That’s how we’re tackling the cost of living. Mr Speaker, we’ll get on with it.”Foie gras production has for years been banned in the UK on cruelty grounds; it involves force-feeding ducks or geese in order to fatten their liver. Fur farming has been illegal in the UK since the turn of the millennium but millions of pounds’ worth is still imported.The government’s Animals Abroad Bill is supposed to include other measures to help animals living in other countries, such as restrictions on trophy hunting and holidays that lead to the neglect of animals. These separate measures are expected to go ahead when the bill proceeds. More