No 10’s refusal of emergency budget shows Tories have lost control of economy, says Labour – UK politics live

Labour has criticised No 10’s decision to ignore calls for a recall of parliament and an emergency budget. In response to the Downing Street lobby briefing (see 12.37pm), Rachel Reeves, the shadow chancellor, issued a a statement saying that the Conservative party has “lost control” of the economy. She said:

People are worried sick about how they’ll pay their bills and do their weekly food shop, and all this Tory prime minister does is shrug his shoulders. An economic crisis like this requires strong leadership and urgent action – but instead we have a Tory party that’s lost control and are stuck with two continuity candidates who can only offer more of the same.

Labour would start by scrapping tax breaks on oil and gas producers and providing more help to people who are struggling to pay their energy bills. Only a Labour government can tackle this crisis and deliver the stronger, more-secure economy that Britain needs.

It is also interesting to see Reeves describe both Liz Truss and Rishi Sunak as continuity candidates. “Time for a change” is often the most compelling message available in a political campaign, and so it is easy to see why Labour wants to brand them both as continuity figures.

But it does not square with conventional assessments of the Tory leadership contests. Truss is a continuity candidate in the sense that she is a Boris Johnson’s loyalist who shares his scepticism for fiscal orthodoxy and his faith in Brexit boosterism. But as PM she would implement unfunded tax cuts that on a scale way beyond anything Johnson was able to get past the Treasury.

And Sunak is a continuity candidate in terms of economic policy (which is not surprising, because he was largely in charge of Johnson’s economic policy until a few weeks ago). But temperamentally he is very different, he appeals to a different type of voter and a Sunak administration would feel more like a conventional Conservative one. In a good Sunday Times column yesterday, Robert Colvile argued that a Truss win would mark the victory of Johnsonism over Cameronism.

Downing Street held a lobby briefing this morning. Here are the key points.

• Boris Johnson is rejecting the call from Gordon Brown for parliament to be recalled to pass an emergency budget. (See 11.11am.) Asked about the suggestion, the prime minister’s spokesperson said the government has already announced measures due to come into effect later this year. He also said Johnson was abiding by the convention that says, in his final weeks in office, he should not make significant fiscal interventions because those decisions should be left for his successor. There were no plans to recall parliament, the spokesperson added.

• The spokesperson said Boris Johnson was back from holiday – but he would not confirm that Johnson paid for it himself. Johnson and his wife, Carrie, reportedly had a break last week at an eco-hotel in Slovenia where rooms cost between £242 and £542 a night. The spokesperson would not confirm that this was where Johnson was on holiday, but he said the destination had been reported. Asked if the PM paid for it himself, the spokesperson said “no taxpayers’ money was used for this” and that it was a private matter. Asked again if Johnson had paid for it himself, the spokesperson said he was not aware of the situation, but that any declarations would be made in the normal way if Johnson had to register it as a gift.

• The spokesperson denied that Johnson has been “missing in action” this summer. The claim has been made by Labour, which said last week that Johnson and the chancellor, Nadhim Zahawi, should not both be on holiday when the UK was heading into a recession. But the spokesperson said he did not accept that characterisation. He said people understood that it was usual for the PM, and other ministers, to take time off during the summer recess. Asked what Johnson would be working on now he was back from holiday, the spokesperson said he would be speaking to the chancellor “to make sure that the support [with energy bills] that is coming later in the year is on track”. The government was delivering in a number of other areas too, the spokesperson said.

• No 10 refused to back calls for the privileges committee inquiry into claims he lied to parliament about Partygate to be halted. The Daily Mail (which supports Johnson and opposes the inquiry) has splashed on those demands this morning.

Asked if Johnson wanted the inquiry to be halted, the spokesperson said Downing Street wanted to “abide by the process”. He said parliament had voted for the inquiry to go ahead, and he said Downing Street would assist the committee. But he said he was unable to say when No 10 would respond to the letter from the committee demanding written evidence relating to what Johnson did and didn’t know about the lockdown-busting partying. Asked if Johnson thought the process would be fair, the spokesperson just said he would expect the committee to abide by the rules.

In his first newspaper interview as health secretary (and possibly his last – he is backing Rishi Sunak for Tory leader, not the favourite Liz Truss), Steve Barclay has told the Daily Telegraph that the NHS is facing “very real challenges” this winter. He told the paper:

We have very real challenges coming down the track in the autumn and winter, and as far as I’m concerned there needs to be a real sprint within Whitehall, and particularly in the Department of Health, to get ready for September.

Part of my role is to prepare for reasonable worst-case scenarios. Obviously those pressures can come in different forms. It might be you get a bad flu, it may be Covid rates are higher than we would expect or like.

There’s an urgency of now to prepare, particularly in areas where there’s a long lead time. The decisions need to happen now, not wait until the autumn – by which time those lead times would put the resolution at too late a stage.

Barclay also told the Telegraph that he wanted to hire more staff from overseas to fill vacancies in social care. There are reportedly more than 100,000 vacancies in social care, and Barclay said hospitals were unable to discharge some patients because staff shortages meant places were not available for them in care homes. He said:

I have been working at pace over recent weeks to accelerate our contingency plans, to look at specific levers such as increasing significantly our international recruitment …

A big part of my focus has been giving a lot more ministerial time to looking at the issues on delayed discharge, on social care recruitment. If there’s pressure on the system and that requires more beds in the community, those beds need the workforce to go with them.

The Telegraph said this could include hiring more nurses from countries that train more nurses than they need, including India, Sri Lanka and the Philippines. The paper, and Barclay in his remarks from the interview that were reported, did not address the point that labour shortages in the social care sector have been exacerbated by Brexit.

In an article for the Observer at the weekend, the Labour former prime minister Gordon Brown said Boris Johnson and the Tory leadership candidates should agree an immediate emergency budget to set out measures to help people with the cost of living crisis. This morning he has been giving interviews restating this demand. He told ITV’s Good Morning Britain:

If you don’t act now, you cannot get the benefits to people by October 1. If you wait until after the new prime minister is selected, that will be too late to get benefits to people by October 1. It’s too late because people will be experiencing great hardship, an unbearable burden of unpayable bills in October.

So that’s why I want Liz Truss, Rishi Sunak, Boris Johnson, they may disagree on things but they should get together, agree that they are in charge of delivering an emergency budget.Parliament should be recalled if necessary. We can let this crisis develop so that we have an emergency we cannot deal with properly in October.

Brown also criticised Truss and Sunak for proposing tax cuts. He said:

The tax cuts that Liz Truss is proposing [reversing the national insurance increase] don’t really help the people who need help most. They give most to people who are richer. Rishi Sunak’s now come out with a tax cut [cutting VAT on fuel bills] that he himself said … would disproportionately help the rich a few months ago …

It’s not tax cuts that are going to solve the problem that we’ve got in the winter months.

Rishi Sunak has said that, in addition to the help with energy bills he announced as chancellor, he would cut VAT on domestic fuel if he became PM. He says this would save an average family £160.

This policy is open to the same accusation he has made about Liz Truss’s proposed national insurance cut; it is not targeted at those most in need, and, for poor families, it would only cover a fraction of the extra costs they will face as energy bills go up.

But Sunak has also signalled that as PM he would do more, with a further package of energy support measures that would be announced in the autumn. In an interview with Sky News this morning Oliver Dowden, the former Conservative party co-chair and a leading Sunak supporter, said this package would be “on a considerable scale” – hinting that it would match what was announced earlier this year. He said:

I think there is no doubt that we do need an intervention of a considerable scale to deal with this, because we have to be honest with people about the scale of the challenge that they are facing.

As chancellor, Sunak made three major announcements this year, all involving massive “handouts” (as Liz Truss would call them) intended to help people with the cost of living: a £9bn energy support package in February, the spring statement in March involving further giveaways worth about £10bn, and a £15bn package of support announced in May.

Brandon Lewis, the former Northern Ireland secretary and a leading Liz Truss supporter, has been giving interviews this morning, which mostly have focused on Truss’s approach to dealing with the cost of living crisis. (See 8.56am.) Here are the main points.

• Lewis admitted that the tax cuts announced by Truss already would not on their own “fully solve” the cost of living crisis for people. But he said there would be further measures in an emergency budget. In an interview with the Today programme’s Nick Robinson, he said:

Apart from the specific details that Liz has already outlined that give some help to people – I appreciate it doesn’t fully solve the problem, this is a big, international, global inflation and energy price change that we’re facing – she also wants to bring forward an emergency budget.

• He indicated that Liz Truss was not ruling out using handouts to help people with rising energy prices in the emergency budget she wants to hold if she becomes prime minister in September. This is from the Mirror’s Dan Bloom.

• Lewis was reluctant to confirm Truss’s plan to reverse the national insurance increase would provide minimal help only for people on the national living wage. He repeatedly dodged the question in a testy interview on the Today programme. Robinson eventually answered his own question, saying the national insurance cut would be worth only £59 to someone on the national living wage – when the energy price cap was set to rise by about £1,600. Kate Nicholson at HuffPost has a full write-up of the exchanges here. This is from the consumer journalist Paul Lewis.

Good morning. At the end of last week Liz Truss, the clear frontrunner in the Tory leadership contest, gave an interview to the Financial Times in which she appeared to rule out using benefits or one-off payments to offer further help people with their energy bills this winter. She told the paper:

Of course I will look at what more can be done. But the way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts.

This triggered a backlash and, for the second time in a week, her campaign responded by claiming that she had been “misinterpreted”. But this controversy is probably much more significant than the one about her proposal for regional public sector pay, which she was able to bury with a hasty, on-the-day U-turn. As my colleague Aubrey Allegretti reports, the Truss campaign now say they are not ruling out any further handouts to help people with the cost of living crisis this autumn. But Truss has not resiled from the main point she was making in the FT interview, which was that she believes that the priority should be cutting tax. When she talks about “the Conservative way” (a phrase she also used in the Sunday Telegraph yesterday), she is referring to the long-standing Conservative belief that, rather than have the state take money from people through tax and then give it back to them, it is generally preferable to let them keep it in the first place.

The problem with this approach is that it doesn’t work when people are facing dire poverty and in need of urgent financial support to buy food and stay warm during the winter. This is a point that Rishi Sunak has been making, and he has done so forcibly this morning in an article in the Sun. It is worth quoting from it at some length. The former chancellor says:

Families are facing a long, hard winter with rising bills.

Yet Liz’s plan to deal with that is to give a big bung to large businesses and the well-off, leaving those who most need help out in the cold.

Worse still, she has said she will not provide direct support payments to those who are feeling the pinch most.

Scrapping the health and social care levy will give the average worker around £170.

But someone on the national living wage will get less than £60 for the year.

Pensioners will not get a penny.

And her corporation tax cuts don’t benefit small businesses – they just put money back in the coffers of the biggest companies with the largest profits.

These tax cuts simply won’t touch the sides.

We need clear-eyed realism, not starry-eyed boosterism.

Much of this sounds like a Labour party press release. That may help to explain why Truss, not Sunak, is on course to win, but it also illustrates how damaging this leadership contest has been for the reputation of the Conservative party as a whole. The candidates have been writing the scripts for Labour’s next campaign adverts.

This row is likely to carry on through the day. Brandon Lewis, the former Northern Ireland secretary, has been giving interviews this morning on behalf of Truss, and Oliver Dowden, the former Tory co-chair, has been doing the same for Sunak. I will summarise what they have been saying shortly.

There is not much in the diary today, but Truss and Sunak are both holding campaign events with Tory members, and Downing Street is holding a lobby briefing at 11.30am.

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