Former Bank of England chief economist says Tory growth policies ‘far more likely to succeed’ than Labour’s – UK politics live

From 1h agoAt one point in the summer Andy Haldane, the former chief economist at the Bank of England, was informally advising Andy Burnham. Haldane spent most of his career as an official at the Bank. He is not a party political figure. But at the Bank he was viewed as an independent thinker, he was brought up in the north of England and he is committed to regional growth (which is one reason why Michael Gove hired him as a levelling up adviser).But any suggestions that Haldane is a Burnham supporter have now been quashed by an article Haldane has published in the Financial Times. In it, he says the Conservaties’ economic policies are “far more likely to succeed” than Labour’s.He says:

double quotation markIn the decade since Brexit, both parties have swung simultaneously right on social policy and left on economic policy. The interventionist economic agendas of Conservative prime ministers Theresa May, Boris Johnson and Rishi Sunak would not have been out of place under New Labour. At the 2024 general election, only a vape wrapper separated the parties’ economic manifestos.

Today, those differences are stark. Andy Burnham’s conference speech was a homage to 1950s-style state socialism. Kemi Badenoch’s speech was also a throwback, but to the smaller state and lower taxes of the 1980s. Which offers the more likely path to growth?

In today’s straitened circumstances, the rightward fork is far more likely to succeed.

Haldane argues the Tories have not always been right. He says George Osborne’s austerity policies were a mistake.

double quotation markAt the time of austerity, UK government debt was not only far smaller than it is today, but the cost of servicing it was lower than at any time in human history. Remarkably, the country’s long-term borrowing costs were negative in inflation-adjusted terms for protracted periods. There will probably never have been a better time for public investment.

Yet funding was cut and a £2tn investment gap opened up relative to international competitors, stunting growth. Veering right was wrong.

But, in the current circumstances, Conservative policies would be best for growth, he says.

double quotation markToday’s fiscal environment is fundamentally different. Long-term borrowing costs have risen 4-5 percentage points and now sit above estimates of the UK economy’s long-term nominal growth rate. That signals the need for primary fiscal surpluses, on a sustained basis, if the UK’s debt dynamics are to stabilise.

The Labour party’s plan for an expansive (and expensive) state sits uncomfortably with this precarious fiscal backdrop. It also sits oddly with the fact that public-sector productivity has failed to rise this century. Both state financial capacity and personnel capability are at present sources of economic weakness, not strength.

In this debt-laden environment, the pursuit of a larger state is more likely to crowd out than crowd in growth. It also runs the risk of a loss of confidence in bond markets that causes borrowing costs to ratchet — think “Liz Truss-plus” …

The Conservatives’ economic plans are better suited to that task: for example, through cuts to business and employment taxes and regulation to unleash animal spirits; and by slimming government spending to lower borrowing costs, as the IMF and Bank of England have recently highlighted.

Key events26m agoFarage claims it 'just isn't true' to say people in Reform UK are 'uniquely awful'48m agoFarage and Badenoch both claim UK at risk of French-style rioting1h agoFormer Bank of England chief economist Andy Haldane says Tory growth policies 'far more likely to succeed' than Labour's1h agoDanny Kruger tells Reform UK rally media 'trying to stop us winning'2h agoTell us what you think about Covid inquiry's adult social care report2h agoInquiry report shows Hancock's claim about protecting care homes 'a cruel lie', Covid victims' campaign group says3h agoUK to deploy fighter jets to protect Saudi Arabia from Houthi attacks3h agoHealey accused of missing 'open goal' after he rules out raising capital gains tax in budget3h agoHallett says England should follow Scotland, Wales and NI in having 'invaluable' register for social care workers3h agoHallett says in any future pandemic extra financial support for care workers should be available 'at the start'3h agoHallett says ban on all family visits to relatives in care homes at start of pandemic had 'devastating consequences'3h agoHallett says patients discharged from hospitals into care homes without testing should have been isolated3h agoHallett says Matt Hancock's 2020 claim about 'protective ring' being thrown around care homes opposite of the truth4h agoCovid chair Heather Hallett says pandemic had 'devastating impact' on people in care homes4h agoUK government failures led to Covid spreading ‘like wildfire’ in care homes, inquiry finds4h agoCovid inquiry says pandemic revealed 'underlying fragility of adult social care workforce' in care homes report4h agoMaroš Šefčovič tells MEPs about EU's priorities for next month's summit with UK4h agoBadenoch says she has not acted on government advice to stockpile food in case of emergencies5h agoBadenoch claims Labour MPs want 'more immigration' because it will gain them votes5h agoBadenoch says Reform UK councillors not welcome back in Tory party, because she wants it to 'regenerate' with new people5h agoBadenoch claims she wants to prioritise tax cuts for businesses, not individuals, because those would boost growth5h agoBadenoch tells Burnham getting people to stop playing loud music on trains 'job for ticket inspectors, not PM'5h agoBadenoch claims tax burden too high5h agoBadenoch says it would be 'unconscionable' to delay plan to raise defence spending to 3% of GDP until spending review next autumn6h agoRayner rejects claims of split with Shabana Mahmood over migrant residency rules, claiming media 'love saying those girls all falling out'6h agoRayner says she's 'cheering them on', when asked if she backs Milburn/McFadden likely benefit cuts as part of welfare reform6h agoMinisters change law to stop serious offenders detained in hospital getting benefits6h agoBadenoch claims Labour's spending plans based on future 'fictional cuts' that won't happen7h agoHealey to reject calls to raise capital gains tax in budget7h agoBadenoch says Healey’s budget will be worse than Reeves’s if he doesn’t slash spendingIn his Plymouth speech, which has just finished, Nigel Farage has just referred to the ITV News exposé about racism in his party.

“In any political party, any group of human beings, any club, there’ll be some [people] that say unpleasant things,” he said.But he claimed it was wrong to claim there was anything “uniquely awful” about Reform UK.

double quotation markThe sheer level of disproportionality is something I want to share with you very briefly this afternoon.

So, Reform councillors, having been provoked, have said some things we’d rather they hadn’t.

But what about Mr Bonehill-Paine, who was going to be a candidate in Somerset next year for the Conservatives? [He] served a prison sentence for neo-Nazi offences. When it was found out, he then got promoted by Kemi Badenoch to be an adviser to the party.

What about David Graham, the Labour councillor from Fife? He didn’t just say bad things. No, no, no, he sexually abused a 15-year-old girl who he groomed and abused over the course of six months. Have you heard that on the BBC news?

double quotation markAnd, frankly, the list goes on, a list as long as your arm of assault, of criminality, of paedophilia, of sexual abuse.

Wherever you get thousands of people that congregate together, you will get some bad eggs.

Do not buy in to the media narrative that somehow there’s something uniquely awful about people in Reform. It just isn’t true.

Nigel Farage speaking at his rally in Plymouth. Photograph: Toby Shepheard/ReutersNigel Farage, the Reform UK leader, is speaking at the rally in Plymouth(Not in Portsmouth, as he wrongly said at one point.)Most of it is familiar Reform UK stuff, but Farage has just included a topical reference – claiming Britain is likely to suffer French-style rioting at some point.Referring to the “appalling violent mob rule riots that we’ve seen in France over the course of the weekend”, he went on:

double quotation markDon’t be complacent because it’s the other side of the channel. Don’t think it can’t happen here, because it can.

And I suspect many of those protesting outside this hall today in an effort to stop this meeting from even going ahead would be part of those disturbances if they were to occur. Sadly, I think at some point it will occur.

Nigel Farage speaking at a Reform UK rally in Plymouth. Photograph: Toby Shepheard/ReutersFarage was speaking after Kemi Badenoch, the Conservative leader, also claimed that the UK was at risk of French-style rioting. But she suggested, if that were to happen in this country, woke policies describing Britain as racist would be to blame.In an interview with GB News she said:

double quotation markI do worry that things like [the French riots] could happen here. We’ve already seen protests flaring up across the country. That is why it is very important that we get our economy growing again …

If you tell young people that their country is terrible, that it’s okay to hate their country, that Britain is a racist place, and end up going on about imperialism, white privilege and all of that rubbish, then you see them burning down churches and spraying graffiti on war memorials.

And that’s why I always intervene. You know, some people will say, ‘Why are you getting involved in culture wars?’

I will fight for British culture. It’s very important.

At one point in the summer Andy Haldane, the former chief economist at the Bank of England, was informally advising Andy Burnham. Haldane spent most of his career as an official at the Bank. He is not a party political figure. But at the Bank he was viewed as an independent thinker, he was brought up in the north of England and he is committed to regional growth (which is one reason why Michael Gove hired him as a levelling up adviser).But any suggestions that Haldane is a Burnham supporter have now been quashed by an article Haldane has published in the Financial Times. In it, he says the Conservaties’ economic policies are “far more likely to succeed” than Labour’s.He says:

double quotation markIn the decade since Brexit, both parties have swung simultaneously right on social policy and left on economic policy. The interventionist economic agendas of Conservative prime ministers Theresa May, Boris Johnson and Rishi Sunak would not have been out of place under New Labour. At the 2024 general election, only a vape wrapper separated the parties’ economic manifestos.

Today, those differences are stark. Andy Burnham’s conference speech was a homage to 1950s-style state socialism. Kemi Badenoch’s speech was also a throwback, but to the smaller state and lower taxes of the 1980s. Which offers the more likely path to growth?

In today’s straitened circumstances, the rightward fork is far more likely to succeed.

Haldane argues the Tories have not always been right. He says George Osborne’s austerity policies were a mistake.

double quotation markAt the time of austerity, UK government debt was not only far smaller than it is today, but the cost of servicing it was lower than at any time in human history. Remarkably, the country’s long-term borrowing costs were negative in inflation-adjusted terms for protracted periods. There will probably never have been a better time for public investment.

Yet funding was cut and a £2tn investment gap opened up relative to international competitors, stunting growth. Veering right was wrong.

But, in the current circumstances, Conservative policies would be best for growth, he says.

double quotation markToday’s fiscal environment is fundamentally different. Long-term borrowing costs have risen 4-5 percentage points and now sit above estimates of the UK economy’s long-term nominal growth rate. That signals the need for primary fiscal surpluses, on a sustained basis, if the UK’s debt dynamics are to stabilise.

The Labour party’s plan for an expansive (and expensive) state sits uncomfortably with this precarious fiscal backdrop. It also sits oddly with the fact that public-sector productivity has failed to rise this century. Both state financial capacity and personnel capability are at present sources of economic weakness, not strength.

In this debt-laden environment, the pursuit of a larger state is more likely to crowd out than crowd in growth. It also runs the risk of a loss of confidence in bond markets that causes borrowing costs to ratchet — think “Liz Truss-plus” …

The Conservatives’ economic plans are better suited to that task: for example, through cuts to business and employment taxes and regulation to unleash animal spirits; and by slimming government spending to lower borrowing costs, as the IMF and Bank of England have recently highlighted.

In Plymouth, the Reform UK rally is just getting under way. Danny Kruger is the first person to speak. He starts by saying that the party has been going through some “turbulence” recently, referring to the ITV undercover exposé (summarised here and here). ITV News found some “rotten apples”, he says, and they have to go.But he says the journalists behind the investigation are not trying to help. They are “trying to stop us winning”, he says. He goes on:

double quotation markI’m not here to whine about the media because we’re not the real victims. We’re not the real targets. It’s not us they’re trying to stop. It’s the British people …

It’s not who we are that they hate. It’s what we want to do. We want to take our country back for the people of our country. And they know it. And that’s why they hate us.

We would like to hear from readers about what they think of today’s Covid inquiry report into what happened in care homes during the pandemic. You can submit a contribution here.Share your reaction to the Covid public inquiry findings on adult social care during the pandemicRead moreThe Covid-19 Bereaved Families for Justice group has issued a statement about today’s inquiry report saying it shows that Matt Hancock’s claim about a protective ring being thrown around care homes (see 12.22pm) was a “cruel lie”.The organisation said:

double quotation markToday’s report is a devastating account of one of the darkest episodes in our country’s history. It shows that the government knew the care sector was extremely vulnerable to a pandemic and yet did nothing. Failing to act until it was too late. And It shows that Matt Hancock’s claim to have thrown a protective ring around care homes was a cruel lie. Months before telling us that lie, Matt Hancock sat in a room with Boris Johnson and Simon Stevens and made the decision to discharge hospital patients into care homes, without testing. Three men, with no medical expertise between them, made a decision that became a death sentence for our family members.

The most at-risk people in our society, the sick, elderly – many of whom had a full and long life ahead of them – were failed by a government who abandoned them and left them to die. That is the consequence of social care system treated as a second-class service – too difficult for politicians to reform, too easy to ignore. Our family members paid the price. That is why social care reform cannot wait.

RAF Typhoon fighters are to be used in efforts to protect Saudi Arabia from attack by Yemen’s Houthis, flying defensive missions over the country’s cities and critical infrastructure as western allies increase their intervention in the escalating conflict. Dan Sabbagh has the story.UK to deploy fighter jets to protect Saudi Arabia from Houthi attacksRead moreJohn Healey, the chancellor, has been accused of missing an open goal. The claim came from Tax Justice UK, which issued this statement, from its deputy director Caitlin Boswell, in response to the news that Healey has ruled out raising capital gains tax in the budget. (See 8.47am.)

double quotation markRuling out a pro-worker, pro-fairness and pro-growth tax rise is a missed open goal. It suggests this government is out of step with the large numbers of MPs across Westminster calling for this change, alongside leading economists. Let alone millions of people who are sick and tired of their needs feeling secondary to those of the super-rich.

Asking those with unimaginable wealth to pay just a little bit more would benefit us all – it’s people being able to afford the basics, see a doctor when they need one, or afford a safe place to live. These are some fundamental things that shouldn’t be hard to deliver in one of the richest countries in the world.

Tax Justice UK backs a plan to raise capital gains tax set out by the CenTax thinktank in a report two years ago. This would raise £14bn, according to CenTax (the Centre for the Analysis of Taxation).And this is how Hallett concluded her statement.

double quotation markDuring the pandemic, the action taken by the UK government and devolved administrations to try and protect workers and users of adult social care came too late.

The failures were the direct result of an absence of proper pandemic planning for the adult social care sector.

This underlines why my recommendations in this report must be acted upon now, before the next pandemic strikes.

Hallett said one of her recommendations was for a voluntary register of care workers in England.

double quotation markI am also recommending the introduction of a voluntary register for the social care workforce in England.

The existing registers in Scotland, Wales and Northern Ireland proved invaluable during the pandemic. They allowed governments to identify recently retired professionals who could return to work and to communicate vital guidance directly. England must follow suit.

Hallett said care workers felt “overlooked and undervalued” during the pandemic.

double quotation markAt least 1.5 million care workers were providing care during the pandemic. Many suffered burnout as a consequence of extreme stress and exhaustion. Visits by health care workers dramatically reduced, and this placed an even greater burden on care workers who stepped in to provide this care. They put their own lives at risk to show compassion to the dying, leaving a long lasting impact on their own physical and mental health.

Hallett said, in any future pandemic, “financial support to protect care workers from economic hardship must be in place at the start”.Hallett said DNACPRs were used too often.

double quotation markI now return to the deeply troubling issue of Do Not Attempt Cardiopulmonary Resuscitation notices, known as DNACPRs. These notices record a medical decision not to attempt CPR in order to try and save a life.

During the pandemic, there were concerns that these notices were improperly imposed on groups of people, such as people with learning disabilities or older people.

I make no apology for repeating what I said in module three, where these concerns were also raised. This should not have happened.

The inquiry has found no evidence of national policies condoning their blanket application. However, the sheer speed of the pandemic meant that discussions about advanced care plans, which record an individual’s preferences for future medical care and can include discussions about DNACPRs, were too often rushed or nonexistent.