No 10 ‘determined to bring strikes to end’ as junior doctors to be offered pay rise worth 20% – UK politics live

Key events

Max Mosley, an economist at the National Institute of Economic and Social Research, has said Rachel Reeves is entitled to argue that she did not know the full scale of the fiscal challenge facing the government until she became chancellor. (See 9.39am.)

The Commons authorities have confirmed that the Rachel Reeves statement will start at 3.30pm. There are no urgent questions coming first. The statement is described as being about the government’s “spending inheritance”.

No 10 restates intention to come up with plan to 'put right' carer's allowance scandal

Downing Street has restated the government’s desire to address the carer’s allowance scandal, which has led to thousands of people being required to pay back large sums because they inadvertently broke the £151 weekly earnings limit when they were claiming the benefit available for unpaid carers. Stephen Timms, the minister for social security and disability, is meeting Carers UK this afternoon to discuss the problem, whch has been highlighted in many Guardian reports. At the No 10 lobby briefing the PM’s spokesperson did not say what action the government would take, and an announcement is not expected today. But the spokesperson said the government would come up with a plan. He said:

Our country would grind to a halt without the millions of carers who provide care and continuity of support to vulnerable people every day.

We recognise the challenges they’re facing and we’re determined to provide unpaid carers with the support they deserve.

The minister for pensions, social security and disability is meeting with Carers UK today to understand their experiences which will help establish the facts before setting out a plan to put it right.

No 10 says it is 'determined to bring strikes to end' after report claims junior doctors to be offered pay rise worth 20%

Downing Street has refused to comment on a report saying junior doctors are being offered a pay rise worth about 20% over two years.

In a story for the Times, Steven Swinford reports:

The British Medical Association’s (BMA) junior doctors committee has recommended an offer that includes a backdated pay rise of 4.05 per cent for 2023-24, on top of an existing increase of between 8.8 per cent and 10.3 per cent.

Junior doctors will be given a further pay rise of 6 per cent for 2024-25, which will be topped up by a consolidated £1,000 payment. This is equivalent to a pay rise of between 7 per cent and 9 per cent.

The overall package represents a pay rise of about 20 per cent. The BMA’s committee has agreed to put the offer to its members, and if it is accepted it will bring an end to industrial action.

Asked about the report at the Downing Street lobby briefing, the PM’s spokesperson said:

As we’ve said before, we’re committed to working to find a solution, resolving this dispute, but I can’t get into detailed running commentary on negotiations.

We’ve been honest with the public and the sector about the economic circumstances we face. But the government is determined to do the hard work necessary to finally bring these strikes to an end.

Rachel Reeves, the chancellor, is expected to make an announcement about public sector pay later today.

David Lammy, the foreign secretary, has told the Lebanese prime minister, Najib Mikati, the UK wants to avoid conflict widening in the Middle East after the rocket attack on the occupied Golan Heights that killed 12 children. He posted this on X.

I spoke to Prime Minister @Najib_Mikati today to express my concern at escalating tension and welcomed the Government of Lebanon’s statement urging for cessation of all violence. We both agreed that widening of conflict in the region is in nobody’s interest.

Puberty blockers ban imposed by Tory government is lawful, high court rules

A ban on puberty blockers introduced by the Conservative government using emergency legislation was lawful, the high court has ruled. The full story is here.

The press summary of the judgment is here.

And the full 62-page ruling is here.

In response, Wes Streeting, the health secretary, said:

Children’s healthcare must be evidence-led.

Dr Cass’s review found there was insufficient evidence that puberty blockers are safe and effective for children with gender dysphoria and gender incongruence.

We must therefore act cautiously and with care when it comes to this vulnerable group of young people.

I am working with NHS England to improve children’s gender identity services, and to set up a clinical trial to establish the evidence on puberty blockers.

I want trans people in our country to feel safe, accepted, and able to live with freedom and dignity.

Tories 'deserved to lose' election because their policy 'incoherent', says Badenoch as she launches leadership bid

Kemi Badenoch, the former business secretary, confirmed that she is standing for the Conservative party leadership with an article in the Times published last night. She was the sixth candidate to declare (the others are Tom Tugendhat, James Cleverly, Mel Stride, Priti Patel and Robert Jenrick), and no one else is expected to come forward before the deadline for nominations closes this afternoon. Badenoch is the bookmakers’ favourite, and her article is less platitudinous than some of the equivalent ones from her rivals. Here are the main points.

• Badenoch says the Tories deserved to lose the general election. She says:

The electorate did not make a mistake. We deserved to lose because the past decade saw us twist and turn in the wind, unsure of who we were, what we were for and how we could build a new country …

Some will argue our loss was down to this policy, that person or some decision. The truth is our policy offer was incoherent, and we could not articulate why conservatism should matter to our fellow man. We thought we could just be managerially better at governing than the other side – a weak foundation at the best of times. Too often, we were led by focus groups.

• She says the last Tory government was too leftwing. “We talked right yet governed left,” she says. In particular, it was too liberal, she argues.

We sought to build an increasingly liberal society. But liberalism has been hacked. Our empathy with those fleeing persecution has been exploited to create an asylum system that is effectively open borders to anyone willing to lie about their circumstances. Legislative improvements ensuring that everyone can be treated equally, irrespective of their race, sex or religion have morphed into a nasty identity politics that seeks to divide based on these characteristics.

Under the guise of politeness and good manners, free speech and the freedom to dissent is curtailed, exemplified by Labour scrapping the Higher Education (Freedom of Speech) Act. In its place we have a coarsening of language and promotion of a postmodernism that can best be described as joyless decadence. We must renew.

That prompted this response from the Economist’s Matthew Holehouse.

Nadine Dorries, the former Tory minister, has claimed that Michael Gove is helping Badenoch with her speeches. (She is critical of them both.) “Postmodernism … described as joyless decadence” is the sort of phrase that makes it possible to believe she might have a point; it is very Gove.

• Badenoch says the Conservative party needs to rediscover what it stands for. She says:

It would be easy to give in to the fatigue we all feel. To just focus on being a credible opposition or lose ourselves debating individual policy positions, as if we remain in government. But there is a bigger question of what it means to be a conservative today. If there wasn’t, the Reform party would not exist. It is not enough to call for “unity to win”. We need to ask ourselves, what are we uniting around? What are we winning for?

This is a dig at rivals like James Cleverly and Priti Patel who have made being ‘unity candidates’ a big part of their pitch.

• Badenoch says she wants the state to do less than it does now. She says:

We will renew by starting from first principles: we can’t control immigration until we reconfirm our belief in the nation state and the sovereign duty it has, above all else, to serve its own citizens. Our public services will never fully recover from the pandemic until we remember that government should do some things well, not everything badly.

• She says she wants to renew capitalism. She says:

The wealth of our nation is built upon our historic ability to capture the ingenuity and industry of our people, and the willingness of many to trade risk for reward. It’s become a dirty word, but our renewal must also mean a renewal for capitalism.

• She suggests she wants to let members play a bigger role in making policy. She says:

Presidential politics don’t work in the UK. Conservatism must become a team effort once again as we renew our party from top to bottom. A new respect for our members who, in their daily lives, are the backbone of communities across our country but are sneered at and pilloried by elitist commentators. We need to do right by our local councillors, many who ran successful councils but lost their seats because of behaviours in parliament.

It is not clear whether Badenoch is implying any formal changes to the way the party makes politics, or whether she is just buttering up the voters who will have the final say in the election. Commentators have been critical of Conservative party members, but that is mainly because they thought Liz Truss would be a good prime minister.

Kemi Badenoch being sworn in as an MP on 9 July. Photograph: UK PARLIAMENT/AFP/Getty Images

Torsten Bell, the new Labour MP who used to run the Resolution Foundation thinktank and who is now parliamentary private secretary to Pat McFadden, the Cabinet Office minister, has posted this on X saying it would be wrong to describe what Rachel Reeves is announcing today as cuts to public spending.

Public service notice (given lots of confused coverage this morning): you’re not “cutting public spending” if you’re not changing any budgets but instead revealing that the previous government announced transport schemes without the budgets to make them happen

Bell has posted this in response to way some of the stories on the announcement (including ours) have been framed.

George Grylls in the Times says Rachel Reeves, the chancellor, could raise £500m by selling empty public buildings and reducing the government’s use of consultants. He reports:

As part of an immediate squeeze, [Reeves] will accelerate the sell-off of empty public buildings and reduce the use of external consultants, a move expected to save £500m.

The sale of surplus public property – a money-raising policy championed by [former Tory chancellor George] Osborne – has generated £3bn for the exchequer since 2010. Government reliance on consultants dramatically increased after Brexit and during the pandemic. Since the last election, Deloitte has won contracts worth £1.9bn while its rivals, KPMG, EY and PwC, have earned £1.3bn, £1.03bn and £1bn respectively.

The Labour party has put a post on social media confirming that today’s Treasury report will identify a “black hole” worth around £20bn in the public finances.

It is worth pointing out that this £20bn “black hole” is not the same as the £20bn one identified by the Institute for Fiscal Studies after the budget in March. The IFS said the Tory government’s plans for future spending implied that “day-to-day spending on a range of public services outside of health, defence and education [where spending is ring-fenced] will fall by something like £20bn”. It said spending cuts on this scale were theoretically possible but not realistic, because in practice government would not want to slash spending to that extent.

In interviews this morning Paul Johnson, the IFS director, has also been pointing out that £20bn is the sum that could be raised if the government were to reverse the two national insurance cuts announced by Jeremy Hunt before the election. Labour has ruled out doing this.

McFadden insists growth remains government's main priority despite likely infrastructure cancellations

As Aletha Adu reports, Rachel Reeves is expected to announce this afternoon that the government is cancelling or postponing various infrastructure projects because of what it has learned about unfunded spending commitments left by the last administration.

In an interview on the Today programme this morning, it was put to Pat McFadden, the Cabinet Office minister, that cancelling transport projects would ultimately hold back growth. McFadden insisted that growth remained the government’s priority. He told the programme:

Growth is the challenge for the country. Growth is the mission for the country.

We will have more to say about that later this week – for example, when we talk about how we are going to get housebuilding moving again with all the positive repercussions that has for the economy.

In everything that we do and everything that the chancellor sets out later this afternoon, the priority of growth is there.

But let me say something else about growth. We also always said that the foundation for growth was fiscal responsibility and stable public finances. That is why we talk about fixing the foundations, that is why we have to be candid with the public about the situation that we have inherited after the general election.

Pat McFadden arriving at the Millbank TV studios in Westminster this morning for morning interviews. Photograph: Tayfun Salcı/ZUMA Press Wire/REX/Shutterstock

Stewart Wood, a Labour peer and former adviser to Gordon Brown and Ed Miliband, posted a useful thread on X yesterday explaining why, even with the Office for Budget Responsibility publishing a regular, independent assessment of government finances, ministers are still able to argue that some of what they learned about public spending after taking office came as a surprise.

This is a common view among Conservative MPs & commentators. And of course it is right in the sense that the generally dire state of public finances was known before hand. But it is a view based on a misunderstanding about what is knowable from inside & outside the Treasury. 1/3

From outside we know OBR tax revenue forecasts, Govt spending plans & a sense of the gap between them. But what you have no way of knowing is the changing trajectory of costs & spending profiles for each of the myriad of things that the Government has committed to delivering. 2/3

So from oustide we have a sense of the revenue gap (gap between revenue & stated costs of Govt commitments) but no sense of the funding gap (gap between what Govt said X, Y, Z would cost & what they actually turn out to cost). Or even whether some policies are just unfunded. 3/3

Minister says Treasury statement will show Tory government was 'running away' from truth about public spending

Good morning. After three weeks as chancellor, Rachel Reeves will today present the most significant policy announcement of the new Labour government so far. Think of it as an inverse budget. Budgets are all about how the government intends to spend money. According to the extensive briefing about this statement, instead it will mostly focus on what the government won’t be spending, on projects it is cancelling because supposedly the last administration kept them on the books without having the cash to fund or finish them.

In policy terms, it will tell us more about what the government wants to prioritise. (Reeves will include recommendations from public sector pay review bodies in her list of Tory “spending black hole” measures. She is expected to accept the recommendations for above-inflation pay increases which the Tories had not approved.)

In political terms, this is an announcement intended to reinforce a narrative Labour wants the public to remember for a decade or more – that the Tories left Britain “broke and broken”.

And, in economic terms, today’s statement is widely expected to pave the way for significant tax rises in the autumn. During the election campaign Labour said it did not want to raise taxes for “working people”. But this implied that tax increases that would only affect the wealthy were in scope and the Treasury has not denied suggestions that today’s analysis could be used to justify measures like capital gains or inheritance tax rises in the budget in the autumn.

Here is Aletha Adu and Peter Walker’s preview story.

In an article for the Daily Express, Jeremy Hunt, the Tory former chancellor, has accused Reeves of being “beyond disingenuous” and of peddling “mistruths”. He argues that she cannot say that she was misled about the state of the public finances because the Office for Budget Responsibility publishes its own assessment twice a year.

Hunt also implies Labour have betrayed voters over tax (ignoring the fact that, during the election, CCHQ regularly attacked Labour for not give cast-iron commitments not to raise taxes like capital gains tax and inheritance tax).

But in interviews this morning Pat McFadden, the Cabinet Office minister, said that, since taking office, ministers had discovered new information about the government’s spending liabilities that was not publicly known before the election. He told Sky News:

What we have discovered since taking office a few weeks ago is things were even worse than we thought and the previous government was certainly guilty of running away from the situation. Let me give you a couple of examples.

We were told, for example, that the Rwanda scheme was going to cost £400m. We have now found that it is £700m, with billions more to be spent in future.

The government were emptying the country’s reserves to pay for other parts of their asylum policy.

In addition to that, the secretary of state for education had a pay offer for teachers on her desk that nobody told anyone about during the election.

When you take up all of this, and you add it all up, it adds to significant pressures on the budget this year which we have to react to.

And, in an interview with the Today programme, McFadden accused Hunt himself of not telling the truth about tax policy during the election. McFadden said:

One of the very revealing things that has happened since the election is that the now shadow chancellor, Jeremy Hunt, has admitted to his shadow cabinet that that £17bn pounds of unfunded tax cut promises at the heart of the Tory manifesto could not have been implemented this year. That is not what they were saying during the election. It is a profoundly revealing admission. And it shows that they knew more about the public spending situation during the election than they were telling the electorate.

Here is the agenda for the day.

11am: The high court is due to give its judgment on a claim that the government’s emergency ban on puberty blockers is unlawful.

11.30am: Downing Street holds a lobby briefing.

2.30pm: Yvette Cooper, the home secretary, takes questions in the Commons.

2.30pm: Nominations officially close for the Conservative party leadership contest. Six candidates have already said they are standing – Tom Tugendhat, James Cleverly, Mel Stride, Priti Patel, Robert Jenrick and Kemi Badenoch – and no one else is expected to run.

After 3.30pm: Rachel Reeves, the chancellor, makes a statement to MPs on the Treasury’s “audit of the spending inheritance left by the previous administration”.

Late afternoon: Reeves holds a press conference.

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