Mark Carney doubles down on claim that Brexit has shrunk UK economy – UK politics live | Politics

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Conservative MPs who spoke in the Commons on Monday when Suella Braverman, the home secretary, gave a statement about asylum seekers were generally supportive. But many of them still have reservations about her, and this morning Selaine Saxby said she was “on the fence” when asked to give an assessment of Braverman.

In an interview on Times Radio, asked to say on a scale of 1 to 10 how confident she was that Braverman would get a grip on the problems being caused by people arriving in small boats across the Channel, Saxby said: “I’m going to sit on the fence on that and say I hope very much that there is much work going on very rapidly to address the situation.”

Saxby represents North Devon, and she is particularly concerned about a hotel in Illfracombe being requisitioned for asylum seekers, even though she says she was told by the Home Office two weeks ago this would not happen.

Miliband says shelving plans for Sizewell C nuclear power plant would be mistake

Ed Miliband, the shadow climate secretary, says it would be a mistake for the government to shelve plans for the Sizewell C nuclear power plant. Referring to reports claiming the project could be delayed or scrapped, Miliband said:

If the government turns its back on this project, they will be breaking all of the promises they have made and undermining our vital nuclear industry.

One of the reasons we are facing an energy bills crisis is 12 years of failed Conservative energy policy, including a decade of drift and delay on new nuclear power.

Their short-sightedness has been staggering – from closing storage facilities, to failing to insulate houses, to delaying on nuclear, and to blocking cheap, homegrown renewable power.

Rishi Sunak held a call with his Japanese counterpart, Fumio Kishida, this morning. Here is an extract from the No 10 readout.

Both leaders condemned the recent North Korean missile launches, and the prime minister said it was vital the international community remained closely coordinated on the best way forward.

Turning to trade, both prime ministers shared the view that the Pacific trade bloc, CPTPP, was an important framework and the UK’s accession offered a unique opportunity to support prosperity across the world.

Discussing progress on the UK’s future combat air system, the leaders agreed that deeper cooperation on the next-generation fighter jet programme would underline the close relationship between the two nations.

After the appointment of Suella Braverman as home secretary, the most surprising feature of Rishi Sunak’s reshuffle was his decision to bring back Gavin Williamson as a minister without portfolio in the Cabinet Office, with the right to attend cabinet.

Williamson was an effective chief whip for Theresa May. But he was not a success either as defence secretary or education secretary, and he has made enemies in the parliamentary party on account of his penchant for plotting and scheming. A survey this week showed that, among Tory members, he is by a wide margin the lowest-rated minister attending cabinet.

According to Cat Neilan from Tortoise, an official complaint about Williamson has now been submitted to CCHQ by Wendy Morton, who was chief whip under Liz Truss. She claims he sent her threatening messages. He denies this.

🚨 Exclusive: A formal complaint has been submitted to CCHQ about “threatening” messages sent by Gavin Williamson

Full story here 👇https://t.co/l33JLUUvNg

— Cat Neilan (@CatNeilan) November 4, 2022

Wendy Morton, chief whip under Liz Truss, has submitted the complaint about “vile and threatening messages” sent over the course of many weeks.

One Tory MP said the submission included screen grabs.

— Cat Neilan (@CatNeilan) November 4, 2022

Morton confirmed she has submitted a complaint, but declined to comment further.

A friend of Williamson said he “strongly refutes these allegations”

— Cat Neilan (@CatNeilan) November 4, 2022

Sinn Féin accuses UK government of ‘fuelling political instability’ after it ruled out NI election before Christmas

Sinn Féin has accused the UK government of “fuelling political instability” after it shelved plans for new Northern Ireland elections before Christmas.

There were elections in May, but they did not result in a power-sharing executive being set up because the DUP is boycotting the process because of its opposition to the Northern Ireland protocol. By law, after six months without an executive (that deadline fell on 28 October), the UK government has to hold a new election within 12 weeks. At one point Chris Heaton-Harris, the Northern Ireland secretary, said he would announce a poll “at one minute past midnight” after 28 October, leading to speculation the election would happen in December

But Heaton-Harris hesitated and this morning he said there will be no election before Christmas. He has not altogether ruled out having an election before the 19 January deadline, but his announcement will increase speculation that the government will pass emergency legislation to remove the requirement for an election – something that has happened before in Northern Ireland when the executive has been suspended.

The political parties in Northern Ireland have generally welcomed the decision, saying an election would not have resolved the stalemate, but Michelle O’Neill, the Sinn Féin leader in Northern Ireland, and first minister designate, said the decision was prolonging instability. She said:

Today’s announcement is more dithering and indecision from the British secretary of state and a continuation of the Tory chaos in London that is now paralysing our politics.

Chris Heaton-Harris met with political parties this week and failed to give any indication of what he announced today.

Instead, he has confirmed the bizarre U-turn he made last week but once again he provides no clarity or certainty on what his next steps even are.

The British government are fuelling the political instability caused by the DUP’s failure to recognise the result of the May election when the people voted for change.

The British government and the DUP are leaving us in a prolonged state of political limbo with no assembly, executive or caretaker ministers.

This is totally unacceptable at a time when workers, families and small businesses are struggling through the cost of living crisis and a cold winter, and when our health service needs immediate investment.

Sir Jeffrey Donaldson, the DUP leader, responded to the news with a tweet restating his call for the Northern Ireland protocol to be replaced.

We need a razor sharp focus on getting a solution, whether by negotiation or legislation. There is no solid basis for a fully functioning Stormont until NIP is replaced with arrangements that unionists can support. Progress in NI only made when unionists & nationalists are aboard https://t.co/6B8ftsRo50

— Jeffrey Donaldson MP (@J_Donaldson_MP) November 4, 2022

Liz Truss was primarily responsible for mini-budget decisions, not Kwarteng, says former Treasury minister Chris Philp

Chris Philp was giving interviews this morning on behalf of the government in his capacity as the policing minister in the Home Office. When Liz Truss was prime minister, he was chief secretary to the Treasury, but he was demoted by Rishi Sunak.

In his interview with BBC Breakfast, Philp was asked about his previous job and whether he would apologise for his role in the disastrous mini-budget. He declined. But he also implied that Truss herself, rather than Kwasi Kwarteng, the chancellor, was primarily to blame for what happened. He told the programme:

The decisions around the mini-budget were taken principally by the then prime minister and to a lesser extent the then chancellor.

Kwarteng, who was chancellor at the time of the mini budget, has not talked publicly since he was sacked by Truss about whether he thinks she was primarily to blame, or he was. But it has been reported that he was cautious about abolishing the 45% top rate of tax in the mini budget, and that she insisted the measure should be included. (It was the first mini-budget measure to be abandoned). Interestingly, in an interview shortly before he became chancellor, Kwarteng said he believed the Treasury should be “constitutionally subordinate” to No 10. Speaking to Harry Cole and James Heale for their Truss biography, he also criticised Rishi Sunak for not deferring to the prime minister. Kwarteng said:

In the meetings I was in, they were very much superior, the Treasury, they were the numbers people, they were the details people, and they indulged, they humoured the prime minister. I don’t know whether they ran rings around him; they were very rude and the special advisers were very rude and they didn’t give him any deference or respect.

Kwarteng contrasted Sunak with Philip Hammond, chancellor under Theresa May, who, he said, had the “maturity” to see that May was ultimately in charge because “the prime minister was the person who won the leadership, she was head of the government”.

Minister says it’s ‘a bit of a cheek’ for asylum-seekers to complain about conditions

Chris Philp, a Home Office minister, has said it is “a bit of a cheek” for people who he said had “entered the UK illegally” to complain about conditions. My colleague Jamie Grierson has the full story here.

Simon Coveney, the Irish foreign minister, has welcomed the UK government’s decision not to call an election in Nothern Ireland before Christmas.

Fully share the Secretary of State’s objective; restoration of functioning institutions in NI. We had a good discussion this week, including on legal obligations under NDNA. No election pre Christmas is welcome & creates space for progress on other matters.
We remain in contact. https://t.co/v1c5YbQb5Q

— Simon Coveney (@simoncoveney) November 4, 2022

Our story about the no early election announcement is here.

Mark Carney defends claim UK economy has shrunk from 90% size of Germany’s to 70% since Brexit

Good morning. Last month, in an interview with the Financial Times, Mark Carney, the former governor of the Bank of England, added to the considerable evidence about the harm done by Brexit to the UK economy with a striking statistic. He told the FT:

In 2016 the British economy was 90% the size of Germany’s. Now it is less than 70%.

This figure was widely quoted on social media, but it was also strongly contested, even by economists who accept that Brexit has held back the UK economy. One of the most prominent critics was Jonathan Portes, a former government economist who is now a professor of economics and public policy at King’s College London, who described it as a “zombie statistic” and “nonsense”. He said Carney was measuring the size of the two economies according to the prevailing exchange rates. But he said the normal method for comparing economies was to use “purchasing power parity”. (Put crudely, this is a measure that tries to evaluate how rich Britain is not by looking at how much stuff we could buy if we took our pounds and went to the US or China, but by how much stuff we could buy if we spent it in the UK.) Portes told the Daily Mail last month:

The pound has risen by almost 10% against the dollar since the Truss nadir. Has the UK economy really grown by almost 10% relative to the US in a few weeks?

Similarly, Carney is choosing a date when the pound was abnormally high against the euro (January 2016), another one when the pound was much lower, and then saying we’ve underperformed Germany by 20%.

That’s just obvious complete nonsense. If you look at actual annual growth rate in domestic currency, the UK and Germany have grown by quite similar amounts since 2016.

But this morning, in an interview on the Today programme, Carney defended his use of the 70% figure. He said the value of the pound started to fall when the referendum was called, it went down sharply when the result was announced and “it hasn’t recovered”.

Carney accepted that there was a difference between the purchasing power parity exchange rate and the market exchange rate. The market exchange rate was what ultimately mattered, he said, because it affected the UK’s ability to buy goods from abroad. He went on:

It’s relatively rare that you get big differences between the two [exchange rates]. But you get them when you have a long-standing shock to productivity in the economy and that is unfortunately what we’re getting in the UK. It was predicted that we would get that. It is coming to pass. And … it is one of the issues the Bank of England is facing.

This is what we said [before Brexit] was going to happen, which is that the exchange rate would go down, it would stay down, that would add to inflationary pressure, the economy’s capacity would go down for a period of time because of Brexit, that would add to inflationary pressure, and we would have a situation – which is the situation we have today – where the Bank of England has to raise interest rates despite the fact that the economy is going into recession.

Carney said that he and Portes had a “difference of opinion” on this. But, Carney said, in his view what mattered was “the purchasing ability, the international weight of the economy”. And that has shrunk, he argued.

Another way to put it is that that structural shift is in part what the government, and all of us, are dealing with in the UK. We’ve had a big hit to our productivity, our capacity in the economy … and we have to take some tough decisions in order to get it back up. And that’s one of the consequences of a decision taken a few years ago.

It is worth focusing on this because it is relatively quiet at Westminster. But in other stories this morning, Sir Graham Brady, chair of the Conservative 1922 Committee, has in effect confirmed that Boris Johnson did have enough support to make it on to the ballot for the latest Tory leadership contest.

And the government has indicated that plans to build a new nuclear power plant in Suffolk are under review and could be delayed or scrapped.

I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions and, if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

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