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Politics

When are you going to feel better off

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When are you going to feel better off?

How politicians answer that big question sets the terms for the next election. The response is certainly not this week.

Prime Minister Rishi Sunak might have told MPs “we are halving inflation” but repeating that political slogan in the Commons doesn’t make it true. In fact he was wrong – just as economic sages were mistaken.

Prices went up faster in February than in January – which came as a surprise to the experts. Interest rates edged up too and will make rent, mortgages and credit more expensive.

The message to workers, firms and families this week is bleak – your costs are going up but don’t ask for a pay rise and don’t put your prices up if you’re a business.

There is no shortage of evidence of how hard it is for millions of families to pay the bills. By the Treasury’s admission inflation “strangles growth and erodes family budgets”.

And its effects can be long-lasting. As one German economist said: “Inflation is like toothpaste. Once it’s out, you can hardly get it back in again.”

As an aside, even that essential item has gone up significantly, with one famous brand hiking prices of a tube from £3 to £4.

What the government hopes is that next month, and the month after that, and the month after that, the number crunchers are correct and inflation will drop pretty sharply by the end of the year and the toothpaste does, after all, go back in the tube.

But inflation slowing down doesn’t mean prices will drop. What politicians and the public have to confront is that there could be many years where voters feel hard up.

  • On this week’s show is Levelling up Secretary Michael Gove and Labour’s shadow culture secretary Lucy Powell
  • Watch on BBC One this Sunday from 09:00 BST
  • Follow live updates in text and video here on the BBC News website

For this week’s show we asked Richard Hughes – the country’s number cruncher in chief who runs the independent Office for Budget Responsibility – how he would answer that big question. If you’re squeamish about your finances you might want to look away now.

He told me we’re in the middle of “the biggest squeeze on living standards we’ve faced in this country on record” – but also it might be five or even six years before people start feeling more prosperous again.

put it: “People’s real spending power doesn’t get back to the level it was before the pandemic even after five years, even by the time we get to the late 2020s.” Gulp.

There is also a separate and tricky conversation to be had about the influence of his organisation, the OBR.

Their work, famously ignored by Liz Truss and Kwasi Kwarteng when they were in charge, tells governments how much they can spend and borrow if they want to stick to their own rules about when they will balance the country’s books.

Wages vs inflation

The idea is that with an independent body publicly checking ministers’ arithmetic the public can have confidence in what’s being done.

But their forecasts, as Mr Hughes happily admits, often turn out to be wrong, and change every six months. Yet they can have enormous influence over what politicians decide.

For example, several sources told me the government only decided to expand childcare in the recent Budget because the OBR told them more than half of the cost would be covered by the benefit of getting some parents back to work.

You can, as many politicians do, believe in the merits of having an independent expert cast their eye over the figures, but also have quiet concerns about how the OBR can draw the limits of political conversations when its forecasts – through no fault of its own – change dramatically.

Whether you are asking an economist, a politician, or just looking at your own bank balance, the broad assessment is not likely to shift – times are tough for the foreseeable future.

Inflation – the politicians’ nightmare – is likely to drop by the end of the year, but Rishi Sunak and Keir Starmer are going to have to tempt you to the ballot box in 2024 when the country still feels hard up.

We can already see the outlines of the Conservatives’ script. With inflation (they fervently hope) down and the economy (fingers crossed) avoiding recession there will, ministers believe, be signs the country’s fortunes have turned and they can persuade hard-up voters to stick with them.

As one minister says: “The argument we want to make is ‘I’m just starting to feel better off, don’t risk it’.”

Watch: So we just have to accept life will be even harder, chancellor?

We’ve lived through unprecedented hard times, they’ll argue, and things are getting better so don’t take a chance on something new.

The aspiration is also that ministers will be able to start cutting taxes again – perhaps in the autumn of this year or more likely next spring.

One former cabinet minister says voters will start to feel better off once a Conservative government is re-elected because they hope they’ll be able to say during the campaign that “inflation is lower, wages outstripping inflation” and they have a “clear plan for the economy”.

Even if Rishi Sunak becomes an expert in political gymnastics it’s unlikely the Conservatives will avoid taking any flak for the hammering incomes have taken while they’ve been in charge.

But you can expect in the next few months for ministers to emphasise more regularly the help that’s already on offer – whether that’s cheaper bus fares or the hugely expensive energy price guarantee.

If you ask Labour politicians when the country will feel better off the answer is also far in the future.

One shadow minister says the decline in living standards has been “brutal” while another says “people are not going to feel better off for a very long time”.

Even if inflation does start to slow, if you believe the polls that show Labour way ahead the tough economic reality for many families gives them a political advantage.

However strongly the Conservatives argue they’ve had to deal with unprecedented pressures, hard-up voters do not tend to reward those in charge. But wise Labour heads are all too aware that successful oppositions don’t just say “we’re not the other guys”.

That’s why we’re seeing the leadership put so much time and effort into trying to create a sense they would spend taxpayers’ money wisely and talk repeatedly about how they would get the economy to grow.

The shadow minister believes Labour tends to win when it offers “hope after years when the Tories look a bit clapped out”.

So when we ask “when are you going to start feeling better off?” the answer is “not much, if at all, before the next election”.

It’s likely that vote will happen when there is not much cash in our own pockets or the public purse.

And we face a conversation where the Conservatives seize on any signs of progress to claim a change is not worth the risk while Labour highlights the hard times we have been living through and says it’s time for something else.

Just like economic forecasts, political predictions can turn out to be miles off. And of course, how we make a living and how the country pays its way is not the only factor determining how people vote.

But after years of hardship you’ll be asked in the general election who you believe will help you be better off.

The answer millions of voters give will likely determine who takes No 10.

Reports /TrainViral/

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Politics

Gething downfall delivers Starmer 1st headache

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Just when you’d have been forgiven for thinking politics might quieten down a bit…

The Welsh Labour government was for so long a case study in how the party could operate in power during its long years of opposition at Westminster.

And yet here we are less than a fortnight into a UK Labour government, and the Welsh Labour government is imploding.

So much for all that talk about bringing stability back to politics.

Last week Vaughan Gething was sharing smiles here not just with the new prime minister but the King too.

Now, he’s a goner, delivering Sir Keir Starmer a headache rather than a handshake.

When I was here in March covering Mr Gething’s victory, the seeds of his political demise were germinating before our eyes.

The donations row had already sprouted and his defeated opponent, Jeremy Miles, legged it from the venue without so much as any warm words about the victor on camera.

It was another sign of the cultivating anger, the political knotweed that would soon flourish and ensnare Vaughan Gething.

Along came the row about alleged leaking, a sacking, a confidence vote — and a first minister whose tenure up until today at least amounts to 2.4 times that of Liz Truss. Ouch.

Westminster has generated its fair share of turbulence in the last decade.

But it is far from unique as a source of turbulence in UK politics.

In February, Michelle O’Neill became first minister of Northern Ireland with Emma Little-Pengelly her deputy, after a long period without devolved government at Stormont.

In March, we had a new first minister of Wales, when Mark Drakeford stood down and Vaughan Gething took the job.

In April we had the resignation of the first minister of Scotland Humza Yousaf.

He was replaced the following month by John Swinney. June was the quiet month then. Just the small matter of a general election campaign.

And here we are in July, and Mr Gething is resigning.

So will begin another leadership race, a new government in Wales, a new first minister and a new team of senior Welsh ministers.

There will also be more arguments about Welsh Labour – its direction, its priorities, its capacity to govern effectively and its relationship with the UK party.

If you’re watching this in Downing Street, it’s the last thing you need.

Reports /Trainviral/

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Shoplifting crackdown expected to be unveiled

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A crackdown on shoplifting is expected to be announced in the King’s Speech on Wednesday.

The government is due to unveil a new crime bill to target people who steal goods worth less than £200.

The policy would be a reversal of 2014 legislation that meant “low-value” thefts worth under £200 were subject to less serious punishment.

The government is also expected to introduce a specific offence of assaulting a shop worker to its legislative agenda.

It will not be clear until legislation passes through Parliament what the punishments for any new or strengthened offences would be.

Data from the Office for National Statistics shows that last year was the worst on record for shoplifting in England and Wales.

Police recorded over 430,000 offences in those nations in 2023 – though retailers say underreporting means these figures are likely to represent only a fraction of the true number of incidents.

Michelle Whitehead, who works at a convenience store in Wolverhampton, said her shop had been “hit every day” by thieves.

People were stealing “absolutely anything” including “tins of spam, tins of corned beef, all the fresh meat”, Ms Whitehead told BBC Radio 4’s World at One programme.

“They’re just coming in, getting their whole arm and sweeping the lot off the shelves,” she said. “The shelves were always empty.”

She said she believed “organised” criminal gangs, rather than individuals struggling with the cost of living, were behind the thefts in her shop.

The crackdown on “low-value” shoplifting “will help a lot of little shops,” Ms Whitehead said.

While retailers and shop workers have welcomed the anticipated proposals, a civil liberties group has raised concerns about criminalising people struggling to make ends meet and overburdening the prison system.

The new legal measures are expected to be announced as part of the King’s Speech on Wednesday, a key piece of the State Opening of Parliament that allows the government to outline its priorities over the coming months.

Before the general election, the Labour Party pledged to reverse what it described as the “shoplifter’s charter” – a piece of 2014 legislation that reduced the criminal punishment for “low-value shoplifting”.

Tom Holder, spokesperson for the British Retail Consortium (BRC), told BBC News the impact of the 2014 legislation has been to “deprioritise it in the eyes of police”.

“I think police would be less likely to turn up to what they see as low-level theft,” he said.

Shoplifting cost retailers £1.8 billion in the last year, which could impact prices, according to the BRC.

“Shoplifting harms everyone in that sense – those costs eventually get made up somewhere, whether it’s prices going up or other prices that can’t come down,” Mr Holder said.

Co-op campaigns and public affairs director Paul Gerrard said the supermarket chain had also recorded rising theft and violence against shop workers.

“There’s always been people who will steal to make ends meet. That’s not what is behind the rise we’ve seen,” he told BBC Radio 4’s Today programme on Tuesday. “What’s behind that rise is individuals and gangs targeting large volumes of stock in stores for resale in illicit venues like pubs, clubs, markets, and out the back of cars.”

But Jodie Beck, policy and campaigns officer at civil liberties organisation Liberty, had concerns about the expected proposals, saying there is “already a wide range of powers” the police can use to tackle shoplifting and anti-social behaviour levelled at retail staff.

Ms Beck said the “£200 threshold” would not just target criminal gangs but also “people who are pushed into the desperate situation of not paying for things” because they cannot afford to make ends meet.

She urged the government to avoid focusing on “criminal justice and policing solutions instead of doing the thoughtful work of looking at the root causes of crime, which we believe are related to poverty and inequality”.

Ms Beck also argued the additional legislation could serve to worsen the UK’s “enormous court backlog” and its “bursting prison system”.

Last week, Justice Secretary Shabana Mahmood announced plans to release thousands of prisoners early to ease overcrowding in the country’s prisons.

A spokesperson for Downing Street said the government would not comment on the King’s Speech until it has been delivered by the monarch.

The National Police Chiefs’ Council has been approached for comment.

Reports /Trainviral/

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Politics

Government launches ‘root and branch’ review

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Defence Secretary John Healey hailed the government’s defence review as the “first of its kind” and said it will “take a fresh look at the challenges we face”.

Mr Healey noted the “increasing instability and uncertainty” around the world, including the conflict in the Middle East and war in Ukraine, and said “threats are growing”.

The strategic defence review will consider the current state of the armed forces, the threats the UK faces and the capabilities needed to address them.

Sir Keir Starmer has previously said the review will set out a “roadmap” to the goal of spending 2.5% of national income on defence – a target he has made a “cast iron” commitment to but is yet to put a timeline on.

On Monday, the prime minister said the “root and branch review” of the armed forces would help prepare the UK for “a more dangerous and volatile world”.

The review will invite submissions from the military, veterans, MPs, the defence industry, the public, academics and the UK’s allies until the end of September and aims to deliver its findings in the first half of 2025.

“I promised the British people I would deliver the change needed to take our country forward, and I promised action not words,” Sir Keir said.

“That’s why one of my first acts since taking office is to launch our strategic defence review.

“We will make sure our hollowed out armed forces are bolstered and respected, that defence spending is responsibly increased, and that our country has the capabilities needed to ensure the UK’s resilience for the long term.”

The review will be overseen by Defence Secretary John Healey and headed by former Nato Secretary General Lord Robertson along with former US presidential advisor Fiona Hill and former Joint Force Commander Gen Sir Richard Barrons.

The group will have their work cut out.

The global security threats facing the UK and its Western allies are more serious and more complex than at any time since the end of the Cold War in 1990.

They also coincide with what many commentators have said is a catastrophic running down of the UK’s armed forces to the point where the country is arguably no longer considered to be a Tier One military force.

In terms of the number of troops in its regular forces, the British Army is now at its smallest size since the time of the Napoleonic Wars two centuries ago.

Recruitment is failing to match retention, with many soldiers and officers complaining about neglected and substandard accommodation.

The Royal Navy, which has spent vast sums on its two centrepiece aircraft carriers, is in need of many more surface ships to fulfil its tasks around the globe.

Its ageing fleet of nuclear-armed Vanguard submarines, the cornerstone of the UK’s strategic defence and known as the Continuous At Sea Deterrent (CASD), is overdue for replacement by four Dreadnought class submarines and costs are mounting.

Commenting on the review, Mr Healey said: “Hollowed-out armed forces, procurement waste and neglected morale cannot continue.”

Too many UK commitments?

The defence and security threats facing the UK, Nato and its allies further afield are multiple.

They include a war raging on Europe’s eastern flank in Ukraine against Russia’s full-scale invasion. The UK, along with the EU and Nato, has opted to help defend Ukraine with multi-billion pound packages of weapons and aid, stopping short of committing combat troops.

The policy behind this is not entirely altruistic. European governments, especially those closest to Russia like Poland and the Baltic states, fear that if President Putin wins the war in Ukraine it will not be long before he rebuilds his army and invades them next.

Some of those countries are already busy beefing up their own defence spending closer to 3% or even 4% of GDP.

The challenge for Nato has been how to provide Ukraine with as much weaponry as it can, without provoking Russia into retaliating against a Nato state and risk triggering a third world war.

The Royal Navy has been in action recently in the Red Sea, where it has been operating alongside the US Navy in fending off attacks on shipping by the Iranian-backed Houthi rebels in Yemen.

But the UK has also made naval commitments further afield in the South China Sea with the Aukus pact, comprising of Australia, UK and the US, aimed at containing Chinese expansion in the region.

Critics have questioned whether a financially-constrained UK can afford to make commitments like this on the other side of the world.

Closer to home in Europe, there is a growing threat from so-called “hybrid warfare” attacks, suspected of coming from Russia.

These are anonymous, unattributable attacks on undersea pipelines and telecoms cables on which Western nations depend.

As tensions increase with Moscow there are fears such actions will only increase and the UK cannot possibly hope to guard all of its coastline all of the time.

But while those nervous Nato partners living close to Russia’s borders are busy beefing up their defence spending closer to 3 or even 4% of GDP, the UK has so far declined to put a timetable on when it will raise its own defence spending to just 2.5%.

Opposition figures have criticised the government for refusing to say when defence spending will be increased.

Before his election defeat, former prime minister Rishi Sunak committed to reaching 2.5% by 2030.

Shadow defence secretary James Cartlidge previously said: “In a world that is more volatile and dangerous than at any time since the Cold War, Keir Starmer’s Labour government had a clear choice to match the Conservatives’ fully funded pledge to spend 2.5% of GDP on defence by 2030.

“By failing to do so, they’ve created huge uncertainty for our armed forces, at the worst possible time.”

Reports /Trainviral/

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