Reeves says government does not want hasty response to Trump tariffs what would put ‘prize’ of economic deal at risk
Reeves says the government will respond to the Trump tariffs in a calm way. She says he met big exporters this morning, and they support this approach too.
She says “the prize on offer is an economic agreement” and businesses do not want the government to do anything that would put this at risk.
Key events
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Afternoon summary
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Greater Manchester demonstrates ‘game changer’ approach UK needs to deliver public services properly, Burnham says
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Attorney general criticises MPs who make personal attacks on judges, saying this is ‘huge threat to rule of law’
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Attorney general says legal advice to ministers under Tories encouraged them to back potentially unlawful policies
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Reeves says government does not want hasty response to Trump tariffs what would put ‘prize’ of economic deal at risk
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Reeves does not rule out future tax rises, but says she will not repeat budget on ‘scale’ of last year’s
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Attorney general says review needed because some migration tribunal decisions imply ECHR ‘not being applied properly’
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Reeves suggests she is not backing calls for OBR to be required to update its forecasts just once a year, not twice
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Reeves declines to says if Richard Hughes will be reappointed as chair of OBR
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Rachel Reeves gives evidence to Commons Treasury committee on spring statement
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Foreign Office minister Stephen Doughty ducks question about how much US might contribute to cost of Chagos Islands deal
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PMQs – snap verdict
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Starmer rejects Lib Dem call for him to lead economic ‘coalition of willing’ fighting trade war against US
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Starmer says Tory claim ‘jobs tax’ will cost families £3,500 a ‘fantasy figure’
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Starmer says trade war ‘in nobody’s interest’ and government will take ‘calm, pragmatic approach’
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Green party says Israel’s plan for ‘security zones’ in Gaza would be ‘ethnic cleansing on mass scale’
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Starmer faces Badenoch at PMQs
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Patrick Harvie to stand down as co-convenor of Scottish Greens, saying he’s helped them become ‘serious political force’
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Plaid Cymru says Britain should respond to Trump tariffs by rejoining EU single market and customs union
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Heathrow warned about power supply days before outage caused closure, MPs told
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71% of Britons would support retaliatory tariffs against US, poll suggests
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UK won’t engage in ‘kneejerk’ response to Trump tariffs, says minister
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Patient satisfaction with NHS has hit record low of 21%, survey finds
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Starmer urged to join EU and Canada in fighting Trump with retaliatory tariffs
Afternoon summary
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Rachel Reeves, the chancellor, has told MPs that the government does not want to give a hasty response to the Trump tariffs because it does not want to put the “prize” of an economic deal with the US at risk. (See 3.36pm.) But, in evidence to the Commons Treasury committee, she said even with a deal with the US, the UK could still face difficulties. As Bloomberg reports, she said:
If we are able to secure an economic agreement with the United States, which we very much want to secure, and are working hard to secure, even if that is possible, it doesn’t mean that somehow we are therefore out of the woods and not impacted by tariffs.
The specific tariffs on the UK are less relevant to the growth and inflation impacts than the global picture because we are an open trading economy and depressed demand from overseas because of tariffs, higher inflation overseas because of tariffs has a direct impact on the UK.
The National Institute of Economic and Social Research thinktank has said much the same. In an assessment, it says:
Our estimates also show that the UK economy is vulnerable to the negative effects of US tariffs through both direct and indirect channels. We find that tariffs raise prices and weaken economic activity in the United Kingdom, with the size of the effects depending on the scope of the tariffs. Even if the United Kingdom were exempt from these tariffs, economic activity could still suffer due to broader global disruptions. In a worst-case scenario where high tariffs are applied, UK GDP growth could fall to zero next year.
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Keir Starmer has accused the Conservatives of using a “fantasy figure” to claim that families will be £3,500 poorer due to the rise in employer national insurance contributions.
Greater Manchester demonstrates ‘game changer’ approach UK needs to deliver public services properly, Burnham says
Greater Manchester offers a model for Britain as to how public services should be delivered and improved, Andy Burnham has said.
In a speech today at the Institute for Government, Burnham said that his city showed why combined authority mayoralties were the best way of delivering services locally. At the heart of this was “a place-first approach”.
The push for elected mayors started when Tony Blair was prime minister, but the concept was extended under the coalition and Conservative governments, with mayors being elected to run combined authorities – not just a single town or city, but a wider area, incorporating several local authorities.
In 2017 Burnham was the first person to be elected Greater Manchester mayor and his combined authority, which covers 10 boroughs, is the most powerful outside London.
In his speech, Burnham paid tribute to George Osborne, the former Tory chancellor, and Sir Howard Bernstein, the former Manchester city chief executive, for their work on the devolution deal that gave his authority its powers.
It had been a great success, he argued.
Since Greater Manchester and the UK government signed the first devolution deal a decade ago, our city-region has been the fastest-growing in the UK, with average annual growth of 3.1% over the last 10 years and the highest productivity growth.
The jury is in: the combined authority model of English devolution, pioneered by Greater Manchester, works. The scale of the achievement is all the more significant when you consider this was a decade of Brexit, Covid and all the shocks since …
The signature achievement is the successful introduction of a new, integrated public transport system, the Bee Network.
But just as significant, although less visible to the public, is the unique, highly-integrated model of public services built in close partnership with the private sector, our universities and the community and voluntary sector. I think we have the most integrated system of public services anywhere in the country.
The Labour government wants to extend the combined authority mayoral model and Burnham said this this approach was right.
In the mayoral combined authority model, the country has stumbled upon the game-changer that the British state has long needed.
It allows a coherent, whole-place approach and, if used properly, could provide the roadmap to a more streamlined and financially sustainable state, breaking down silos, joining the dots around people and places and, in the process, securing more value for public money. Particularly in an era when it is scarce.
And he said a “place-first approach” was at the crucial to making this work.
Combined authorities work best when they operate on the principle of place-first rather than party-first.
Unlike the divisions of party, place is a unifying force. However people vote, they are united by a desire to see the place where they live move forward.
These days, we are lacking things which unite us in common cause. If places have more agency, and a sense of forward direction, and those places are likely to be more cohesive and less divided.
A place-first approach also creates the right conditions for businesses to invest. It creates a long-term stability in direction that Westminster is simply not set up to provide.
Attorney general criticises MPs who make personal attacks on judges, saying this is ‘huge threat to rule of law’
Eleni Courea
Eleni Courea is a Guardian political correspondent.
Lord Hermer, the attorney general, has criticised MPs who make personal attacks on judges.
Giving evidence to the joint committee on human rights, Hermer said that it was “dangerous” to have a culture where judges are singled out for personal attack, not just on social media but in the House of Commons too.
Hermer seemed to be referring particularly to Robert Jenrick, the shadow justice secretary, who yesterday in effect called for Lord Justice William Davis, an appeal court judge, to be sacked as chair of the Sentencing Council.
But Keir Starmer has also been criticised recently for condemning a judicial decision in the Commons.
Hermer told the committee:
We are entering a dangerous moment in which not simply on social media but indeed on the floor of the House of Commons, people are attacking judges on a personal basis. That is entirely unacceptable and creates a huge threat to the rule of law and the independence of the judiciary.
Jenrick, who led attacks on the Sentencing Council over guidelines that he described as amounting to “two-tier justice”, told MPs yesterday that he did not see how Davis could continue in office “given that he has brought [the council] into total disrepute”. Jenrick asked Shabana Mahmood, the justice secretary, if she would sack him.
During the exchanges yesterday, another Conservative, John Hayes, said that all members of the Sentencing Council should resign, and a third Tory, Desmond Swayne, said that Lady Sue Carr, the lady chief justice, should be “rebuked” for her “impertinence”.
He was referring to Carr writing a letter to the PM saying that Keir Starmer, and Kemi Badenoch, were wrong to criticise a decision in an immigration case (without naming the judge involved). Carr said that the government should respect the rule of law and, if it disagreed with a judicial decision, it should appeal it in the courts.
Attorney general says legal advice to ministers under Tories encouraged them to back potentially unlawful policies
Under the last government ministers were given official legal advice encouraging them to approve policies that might have been unlawful, Lord Hermer, the attorney general, has said.
Hermer made the point in evidence to the joint committee on human rights this afternoon as he explained why he had revised the advice.
He said he had not changed the substance of what the advice said. But he had changed the tone, to prevent ministers being misled, he said. As PA Media reports, he explained:
There is nothing substantively new in the revised guidance that I put out.
The reason I brought it in as a revised guidance, without changing the substance but changing to some degree the tone, is because I had a very real concern on entering government as attorney that a practice had developed in which lawyers were being asked to advise ministers as to whether there was a ‘respectable legal argument’ to support the policy or piece of legislation they wanted to introduce.
Hermer said “respectable legal argument” means something is highly likely to be unlawful but not “so bad you’d be struck off”. He went on:
My fear is that it was the default position and ministers were thinking it was respectable without realising it was highly likely to be unlawful.
Hermer said he changed the rules to give ministers an “unvarnished assessment” of the legal risk. He said the threshold “remains exactly the same” but he replaced the word “respectable” with “tenable” to reflect a “change in tone”.
There have been reports claiming some ministers blame Hermer for stopping them introducing bold policies by issuing over-cautious legal advice. But Hermer told the committee he did not accept this.
I don’t think in any sense that is blocking or slowing up a government that wants to abide by the rule of law and ministers who want to abide by the ministerial code.
When Suella Braverman was attorney general, she reportedly changed the guidance to government lawyers to make it easier for ministers to put forward policies which were at risk of being found unlawful by the courts.
In his evidence Hermer also defended the government’s decision to review the way the courts apply article 8 of ECHR when deciding whether migrants should have the right to remain in the UK. I have beefed up the post on this at 3.15pm to include quotes from him about how he thinks article 8 cases are frequently misreported.
The Labour MP John Grady asks Reeves what she thinks of calls for a wealth tax.
Reeves says he has already increased various taxes that impact particularly on the wealthy. As examples, she cites the non-dom tax, VAT on private school fees, the windfall tax on energy companies, the additional dwelling higher rate for stamp duty, the capital gains tax increase, and the inheritance tax increase.
Asked why the spring statement left the headroom almost exactly the same as it was in the budget last year (£9.9bn), Reeves said that she wanted roughly the same amount of headroom. But she said it was “it was accident, rather than design that it was exactly the same amount of headroom”.
Reeves says government does not want hasty response to Trump tariffs what would put ‘prize’ of economic deal at risk
Reeves says the government will respond to the Trump tariffs in a calm way. She says he met big exporters this morning, and they support this approach too.
She says “the prize on offer is an economic agreement” and businesses do not want the government to do anything that would put this at risk.
Reeves does not rule out future tax rises, but says she will not repeat budget on ‘scale’ of last year’s
John Glen (Con) goes next.
Q: At our last hearing you said you would make strong representations to the US government about the importance of free trade. How successful have those been?
Reeves says she has spoken to her opposite number, Scott Bessent, and Jonathan Reynolds has had meeting with his counterparts.
Talks on a trade deal are underway, she says.
Q: But it’s fair to say the consequences of what has already been announced are signficiant. The OBR forecast does not take into account any of the tariffs already imposed. Your headroom is very modest. And yesterday the OBR told us that further tariffs, in line with the car ones, will knock out your headroom. Are you still ruling out further taxes?
Reeves says she said the last budget was a once-in-a-generation tax increase.
Q: So you are ruling out further tax rises?
Reeves says she will not write future budgets in advance. She goes on:
I can assure the committee I will not need to repeat a budget on that scale because we have now wiped the slate clean and put our public finances on a firm footing.
The 2024 budget raised taxes by about £25bn.
Meg Hillier, the chair of the Treasury committee, asks Rachel Reeves if she has any message for businesses worried about the impact of the rise in employer national insurance.
Reeves says there are always consequences from a tax change.
Q: Do you worry that it means firms might cut investment?
Reeves says she speaks to businesses regularly.
If she had not taken the decisions in the budget, she would not have retained control of the public finances. And when you lose control, interest rates go up and bond yields go up.
She says the Bank of England has now had the confidence to cut interest rates three times.
Back at the Treasury committee, there is not much news being committed, and Rachel Reeves is having quite an easy time. It is bad news for John Crace, the Guardian’s sketchwriter. He says:
Time was when chancellors feared an appearance before Treasury Select Cttee. This one is hopeless. Rachel Reeves is living the dream so far
Attorney general says review needed because some migration tribunal decisions imply ECHR ‘not being applied properly’
At the weekend Yvette Cooper, the home secretary, said she was reviewing how the courts apply article 8 of the European convention on human rights (ECHR), the right to private and family life, when deciding whether migrants should have the right to remain in the UK.
In evidence to the joint committee on human rights this afternoon, Lord Hermer, the attorney general, said it was “entirely right” to conduct a review like this.
Hermer said there has been a number of decisions at immigration tribunals on the basis of article 8 that are “capable of suggesting that it is not being applied properly or appropriately”. He went on
I want to make clear in all my comments about decisions of any court that I am categorically not criticising judges.
I think there is real merit in checking that article 8 is being properly understood and applied, because, as I’ve said, you can have a very, very robust but fair process in asylum and immigration context that is entirely compatible with article 8.
We need to just check that there’s a right calibration on casework decisions.
We may also need to check … that government is being robust in appealing decisions that we don’t like, that there’s a litigation strategy that meets that aim.
UPDATE: Hermer said that some of the reporting about article 8 was inaccurate. He said:
There is clearly a lot of information, misinformation, that is being whipped up in the context of asylum and immigration in particular, article 8.
Many of you will have heard banded around the idea that the courts have allowed a foreign national offender to stay here because his child will miss chicken McNuggets.
That is doing the rounds. What is not doing the rounds is that that case went to the upper tribunal, who categorically rejected that as an article 8 argument. They rejected the claim.
Courts are always going to make mistakes. That’s why we have appeal courts, and that’s what’s happened here.
Reeves suggests she is not backing calls for OBR to be required to update its forecasts just once a year, not twice
Reeves says it is important to have just one major fiscal event a year. In the last parliament there were many, and that created uncertaintly.
Q: Is it is important to you to have two forecasts every year? Because obviously that constrains you.
Reeves says she does not feel that. She says she chose to update her plans in the light of the OBR forecast. But she goes on:
We could have chosen to say we would address issues of the headroom the budget, but I did think it was important to show how important we take fiscal sustainability, fiscal stability, and so that’s why we made the decisions we did.
This is interesting. In his column in the Observer on Sunday Andrew Rawnsley said Keir Starmer now agrees with the many commentators who think having the OBR revise its forecasts every six months is distorting policy making. Rawnsley wrote:
[The OBR] also made life difficult for the chancellor in the short-term by telling her that she’d bust her rules unless she made additional spending reductions. The complaint is that policymaking has become too subservient to satisfying OBR guesstimates about what growth and debt might be in five years. I have it on exceedingly good authority that the prime minister himself has come to the view that it is unhelpful, to the point of being barmy, that the government has to live in dread of an OBR report card every six months, rather than face an annual verdict at budget time.
(I have no idea who Rawnsely’s source was, but “on exceedingly good authority” is the sort of thing columnists write when they have recently had a private chat with the PM.)
The Rawnsley column suggests Starmer would like to change the rules so that the OBR only updates its forecasts once a year. Reeves’ reply just now implies she is happy with the status quo.
