How will the oil tax play in Scotland?
The FT’s Sebastian Payne is wondering how Scottish Labour party leader Richard Leonard will be feeling about the oil and gas tax the UK party leadership has unveiled.
Labour used to be able to take scores of Scottish seats almost for granted, and has built its only majorities in history on a strong showing in Scotland’s 50+ constituencies.
But support for the party has collapsed north of the border, squeezed by both the Scottish nationalists and the Conservative party which has picked up unionist votes.
Oil and gas groups in Labour’s sights with £11bn windfall tax proposal
Jim Pickard reports from Birmingham:
Labour wants to raid UK-based oil and gas companies that have extracted oil and gas from the North Sea because it believes the UK has collected less tax per barrel than other countries such as Norway and the Netherlands.
“Had the UK charged the same effective tax rate as the average rate charged by North Sea countries from 1992 to the present day, it would have collected an additional £117bn in taxes,” a Labour official said.
The precise mechanics of the tax have not yet been worked out and would be the subject of a consultation.
“The big oil and gas corporations that profit from heating up our planet will shoulder the burden and pay their fair share,” Mr Corbyn was expected to say in his manifesto launch speech.
Labour estimated that UK continental shelf oil companies made a net operating surplus of £273bn between 1997 and 2018.
Labour claims the tax should have no effect on prices for consumers at the pump because oil prices are determined by the global oil market.
But trade unions have been fighting a rearguard action against the idea of the tax since it was discussed at Labour’s manifesto meeting last Saturday because they are concerned about its impact on the industry.
Corbyn launches most leftwing Labour manifesto in decades
Labour leader Jeremy Corbyn has unveiled the party’s most left-wing election manifesto in decades including a windfall tax on oil and gas companies that could raise more than £11bn, reports Jim Pickard in Birmingham.
The oil levy will be used to pay for what Labour described as a “just transition fund”, providing an £11bn support package to help retrain 37,000 workers in the industry to “make the transition to a clean economy”.
Labour’s 2019 manifesto — launched in Birmingham this morning — promises some radical policies if the party is elected, including a number of nationalisations, higher taxes on big business, huge borrowing for capital investment and extra money for the National Health Service, social care and schools.
Corbyn arrives for manifesto launch
The Labour leader and his key lieutenants have arrived at Birmingham City University for the manifesto launch, which is set to kick off in the next 15 minutes.
Watch this space for details on Labour’s pledges to the electorate as we get them.
What to expect from Labour
The opposition party has slowly revealed some of its economic policies as the election campaign has gone on. All will be revealed at 11am, but here are some of the pledges we already know about:
• In the most high-profile policy announcement by any party so far, Labour has said it would nationalise BT’s Openreach network and provide free full-fibre broadband to every home and business in the UK
• We reported overnight that Labour has drawn up plans for a windfall tax on the oil industry as part of its attempt to shift the UK towards a low-carbon, green economy.
• On housing, Jeremy Corbyn will vow to spend £75bn on the biggest social housebuilding programme since the 1960s, setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.
• The manifesto will also include plans to force companies to hand 10 per cent of their shares to workers over 10 years despite a business backlash.
Alex Salmond indicted for attempted rape and sexual assault
Mure Dickie reports:
Alex Salmond, former first minister of Scotland and one of the most important figures in modern Scottish politics, has been formally indicted on 14 charges of attempted rape and sexual assault.
The indictment prepared by prosecutors ahead of a preliminary hearing on Thursday in the case against case against Mr Salmond includes accusations of assault against 10 women at multiple locations around Scotland between 2008 and 2014.
It contains the first official confirmation of details of the accusations against Mr Salmond, who stepped down as first minister and leader of the Scottish National party after the 2014 independence referendum and in 2017 lost his Westminster seat.
A lawyer for Mr Salmond said on Thursday that the former first minister would plead not guilty. After an initial hearing on the case in January, Mr Salmond said he rejected “absolutely” the charges against him. “I am innocent of any criminality whatsoever,” he said.
Public sector borrowing at 5-year high in October
Valentina Romei reports:
Public sector net borrowing rose to the highest level in five years in October, adding to the pressures on the government’s finances as the main political parties pledge to increase public spending if they win next month’s election.
Public sector net borrowing, excluding public sector banks, increased to £11.2bn in October. This was higher than the £9.3bn expected by economists polled by Reuters and £2.3bn more than in the same month last year, according to data from the Office for National Statistics. This is the highest borrowing for October in five years.
In the fiscal year so far — April to October — borrowing rose to £46.3bn, £4.3bn more than in the same period last year, corresponding to a 10 per cent rise.
The extra borrowing adds pressure to the UK’s public finances at a time when the main political parties have pledged to increase public spending as they vie for support ahead of the December 12 poll.
Government spending is set to rise higher under proposals set out by both the Conservative and Labour parties.
Markets round-up: European equities fall at the open
European stocks have continued this week’s miserable run this morning, with the composite Stoxx 600 down 0.7 per cent shortly after the open.
London’s benchmark FTSE 100 felt the pinch from a tumble in Royal Mail’s share price, with the bourse falling 0.8 per cent in early trading.
The UK postal operator was the biggest loser among major European stocks, shedding about 17 per cent this morning and setting itself up for its worst daily performance since October last year.
Sterling rose 0.1 per cent against the dollar to $1.2939.
Labour’s front bench head for Birmingham
Labour’s heavy hitters are Birmingham-bound this morning, with the manifesto launch expected around 11am.
Keir Starmer, the shadow Brexit secretary, said as he left Euston station that the policies unveiled today would offer people the “dignity and decency” they were demanding.
Meanwhile, Angela Raynor, the shadow education secretary has been braving the cold doing the media rounds, insisting Labour’s ambitious policy pledges are “absolutely deliverable” within the lifetime of the next parliament.
Shadow chancellor Diane Abbot has also headed for the midlands, promising more key policy revelations at the launch.
FT poll tracker
As Labour’s front bench limber up for this morning’s manifesto launch, they will be hoping their ambitious campaign pledges will go some way towards closing the current polling gap.
At 29 per cent, Labour currently lags 13 points behind the Conservatives, according to the FT’s latest poll of polls, updated this morning. At 42 per cent, the Tories retain a solid lead over the opposition party, with the margin unchanged from yesterday.
Tory national insurance pledge will ‘not necessarily’ be met in next parliament
Boris Johnson’s plan to raise the national insurance payment threshold to £12,500 is an “ambition” that will “not necessarily” be reached by the end of the next parliament, according to Sajid Javid.
The Conservatives would, if re-elected, raise the threshold for workers to start paying national insurance contributions from the current earnings level of £8,632 to £9,500 next year, the chancellor said on Sky News.
“The ambition is to take then the threshold to £12,500, to try and keep raising it when we can afford it,” Mr Javid said. “This is the prudent and sensible way to do it.”
His comments come after Mr Johnson, the prime minister, let slip the policy pledge to raise the threshold in comments made while on the campaign trail in the north-east yesterday. Mr Javid’s comments appeared to play down the immediacy of any such rise, however.
We want to do it of course as soon as we can. But at each budget we will make that decision depending on the growth forecast provided and what other priorities we have.
Labour in focus ahead of Birmingham manifesto launch
The big event of the day will be the Labour party’s manifesto launch, set to take place in Birmingham this morning.
Jeremy Corbyn will be looking to take hold of the campaign narrative as he sets out plans for £400bn of extra borrowing and an increase in taxes on big business and high earners to pay for a rise in public spending.
Housing will be a key centrepiece of the event, with Mr Corbyn vowing to spend £75bn on the biggest social housebuilding programme since the 1960s and setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.
Also likely to feature is a windfall tax on the oil industry as part of the party’s attempt to shift the UK towards a low-carbon, green economy — a move that will anger union officials worried about jobs in the North Sea.
In the papers
Labour might be looking to grab the headlines today, but the party will need to dislodge Prince Andrew, who again dominates the front pages. The election, meanwhile, is largely absent.
After a brief period of respite the Duke of York is back in focus after he announced he was withdrawing from public duties amid the fallout from his connection to the Jeffrey Epstein scandal. Almost every major British paper — tabloid and broadsheet alike — leads on that news.
At the Financial Times, we have run with the Trump impeachment inquiry, after the US ambassador to the EU, Gordon Sondland, testified that he was following the president’s orders when he put pressure Ukraine to announce a politically motivated investigation.
Welcome back
We are off again.
Yesterday the Liberal Democrats were in the spotlight as they launched their election manifesto in north London. Today it is the turn of the Labour party.
Jeremy Corbyn will look to kickstart the party’s campaign in earnest with sweeping pledges on housing, climate and nationalisation as he makes his pitch to voters.
