Sunak rebuked by UK's statistics watchdog for making misleading claim about government debt falling
Rishi Sunak has been rebuked by the UK’s statistics watchdog for making misleading claims about his record on bringing down government debt.
Sunak has made reducing the national debt one of his five priorities, and in a video posted on X after the autumn statement he said “debt is falling”. Later in November he told MPs at PMQs “we have indeed reduced debt”.
Sarah Olney, the Lib Dem’s Treasury spokesperson, wrote to the UK Statistics Authority to ask if there was any justification for what Sunak was saying and today, in a response, the authority’s chair, Sir Robert Chote, said Sunak’s words were misleading.
Chote said No 10 tried to justify Sunak’s “is falling” comment by saying he was referring to what was forecast to happen in 2028. Chote explained:
In this instance, the prime minister’s office informed us that both claims referred to the fact that the Office for Budget Responsibility (OBR) was forecasting that the underlying measure of net debt (excluding the Bank) would be falling as a proportion of GDP (although not in cash terms) in the final year of its five-year forecast, in line with the government’s target …
The average person in the street would probably not have interpreted the prime minister’s claims in the way that his office explained them to us and would likely have assumed that he was claiming that debt was already falling or that the government’s policy decisions had lowered it at the fiscal events – neither of which is the case. This has clearly been a source of confusion and may have undermined trust in the government’s use of statistics and quantitative analysis in this area.
Members of the public cannot be expected to understand the minutiae of public finance statistics and the precise combination of definitional choices that might need to be made for a particular claim to be true. So, when speaking about the public finances and making claims of this sort, intelligent transparency demands that ministers, other senior politicians, departments and political parties ask themselves how someone with an interest but little specialist knowledge is likely to interpret a particular claim and to explain themselves clearly if they choose to depart significantly from that in definitional terms. When a claim is made in abbreviated form, they should certainly be ready to explain the precise basis for their claim when approached and asked to do so after the event.
Commenting on the letter, Olney said:
Rishi Sunak knows he has no good story to tell on the UK economy so he has resorted to making one up. The least this no-growth prime minister could do is be honest about it with the British public.
Instead, he has reached for the Boris Johnson playbook and is undermining trust in politics. This is desperate stuff from a desperate Prime Minister and it is right that he has been called out on it.
Anas Sarwar (second right) and Keir Starmer (right) among the mourners attending the memorial service of Alistair Darling at Edinburgh’s St Mary’s Episcopal Cathedral. Photograph: Andrew Milligan/PA
Sunak rejects call for higher taxes on wealth and says worrying about inequality does not keep him awake at night
While he was giving evidence to the liaison committee earlier, Rishi Sunak was asked about the morality of tax policy by the Labour MP Liam Byrne, chair of the business committee.
Byrne started telling Sunak that sales of luxury cars were at an all-time high while food banks were running out of food, homelessness was at a record level and millions of people faced destitution. He asked Sunak if he lay awake at night worrying about the levels of inequality.
Sunak replied:
No. I want to make sure we can reduce economic inequality and spread opportunity, and I’m please that we are making progress on that.
Sunak said that income inequality was lower than it was in 2010, that there were 1.7 million fewer people living in absolute poverty, and that the number of people in low-paid work was at its lowest level on record.
Byrne put it to Sunak that wealth inequality has gone up. And he said the UK has the worst record in inequality of any major economy. He asked Sunak to accept that the tax system should be fair and that those with the broadest shoulders should pay more, and Sunak replied: “Of course I do. I believe in a progressive tax system, and that’s what we’ve delivered.”
Byrne then asked why, if one person in five is set to pay 40% income tax, it was right for people who get their income in the form of investment income to pay around half of that.
Sunak said he did not agree this was wrong. Capital gains tax on second homes was higher than before, he said. And, with investment taxes generally, rates have to make allowance for the value of investment to the economy.
But, Byrne said, investment income had doubled during the course of the century, rising to to £80bn. That mean rich people were paying tax rates of around 21% or 22%. He asked: ‘“Surely that is morally wrong.”
Sunak did not accept that. He said it was Gordon Brown who cut capital gains tax, and he pointed out that Byrne was a Treasury minister at the time. Byrne said that that was 13 years ago, and that wealth inequality had widened a lot since then.
Byrne is due to publish a book on wealth inequality next year, which may partly explain why he was so keen to ask about the wealth taxes. But it is also an issue that is likely to become increasingly topical. Labour is currently only proposing a very small number of highly-targeted tax increases, but in the past Keir Starmer and Rachel Reeves have hinted that they would support removing what are seen as the tax advantages for people who get income from wealth.
And in its recent report on the economy, Ending Stagnation, the Resolution Foundation explicitly proposes taxing wealth more. The report which says:
Although we must wait to assess the full – and potentially significant – effect of newly raised interest rates in reducing overall levels of wealth, the big story of the last 40 years has been of private wealth racing ahead of income, rising from around three times to more than seven times of GDP. One might have imagined that as wealth increased, tax on wealth would increase in rough proportion. Figure 55 reveals nothing of the sort has happened. Instead, wealth taxes remain roughly where they were 15 or even 35 years ago, at somewhere around 3 per cent of GDP.
And here is figure 55 that illustrates this.
How income from taxes on wealth has not kept up with rise in overall value of people’s wealth Photograph: Resolution Foundation
Starmer attended the launch of the report. He did not endorse all its recommendations, and its tax plans did not feature in the press summary of the main points, but, as Byrne’s questions showed, there will be people in the party pushing for a future Labour government to move in this direction.
Number of asylum seekers who might come to UK from Rwanda under reciprocity clause in 'single digits', Cleverly says
Asked about the clause in the agreement saying the UK will agree to take in a portion of Rwanda’s asylum seekers, Dan Hobbs, the official giving evidence with Cleverly, says this refers to people who might have acute medical needs.
Cleverly says he cannot speculate on the number of people who might come to the UK as a result, but he says he expects the numbers to be “tiny”. He says he is talking about “single digits”.
Goldsmith returns to his point about the case for delaying ratification of the treaty. Rwanda has not yet implemented the changes that have been promised, he says. He says:
Parliament is being asked to accept that it is safe when we don’t yet know.
Cleverly says he is confident that the elements of the treaty will be in place.
Q: So why not wait until they are in place before ratifying the treaty?
Cleverly says he understands why the committee is cautious. But the scale of the challenge means the government also has an incentive to move swiftly, he says.
Lord Kerr, a former permanent secretary at the Foreign Office, complains about what Cleverly said earlier at UNHCR.
Kerr says UNHCR runs a scheme that involves sending refugees from Libya to Rwanda while on transit to somewhere else. It does not settle them there permanently. He says Cleverly implied the opposite. (See 5.11am.)
Cleverly says Rwanda policy on its own will not stop small boat crossings
Q: What progress has been made in recruiting the international judges required under the new treaty?
Cleverly says: “The answer won’t be nothing.” But he says he does not have that information. When he next speaks to the Rwandan government, he will asks for a progress report, he says.
Q: Wouldn’t it be more sensible to put that structure in place, and then ratify the treaty?
Cleverly says every day they wait, more people put their lives at risk in the Channel. He says another person died this weekend. He does not want to hang around.
He says there are areas where he cannot reassure peers now, but expects to be able to reassure them in time.
Q: Are you saying once this will be in place, there will be no boat crossings?
Cleverly says:
I have never said that this alone will prevent illegal people smuggling across the Channel.
He says he has been criticised for saying that other policies are needed too. (He is referring to the row generated by his claim in an interview that Rwanda wasn’t “the be all and end all”.)
He says Rwanda is one part of a “multi-strand approach”.
Next year, as the weather improves, more people will try to cross, he says. He says he wants a deterrent in place by then.
Cleverly says UK will not try to start deportations to Rwanda until Kigali has implemented all changes required by new treaty
Goldsmith says the supreme court said its main worry was not the good faith of the Rwandan government; it was the practical ability of Rwanda to deliver a proper asylum system.
Q: So how can we trust Rwanda to make the appropriate changes?
Cleverly says the UK is not just relying on Rwanda’s good faith. A robust legal framework is being put in place to address the concerns.
He refers to the new appeals body being set up, which will have co-president from a Commonwealth country.
Q: Can you confirm the government will not ratify the treaty until the new measures in Rwanda are fully effective?
Cleverly says the treaty does not come into force until both sides have ratified it. He says he does not want to dictate to Rwanda.
Q: I am not asking you to dictate to them. But they have a lot to do. I am just suggesting you wait until those things are done.
Cleverly says the things Rwanda is being asked to do are not complicated.
Q: So can you say you will not ratify this until the agreement has been fully implemented.
Cleverly says the UK will not operationalise the scheme until the measures underpinning the treaty are in place.
He says neither side has an interest in “rushing the fence” and getting this wrong.
Cleverly says the Rwandans really want the deal with the UK to work. They believe it would help their reputation, in a continent where countries are more often seen as causing problems than solving them, he says.
Q: But this treaty will not be looked at by the courts. So it is just parliament that will decide if this treaty works, and in the Commons there is no equivalent of this committee. How can we know this will work?
Cleverly says the supreme court relied extensively on comments from the UNHCR in its judgment. But the day after the judgment was published, UNHCR sent refugees to Rwanda. That implies they think it is safe, he says.
He says the treaty is more robust than the deal it replaces.
In Rwanda there is a political desire for this to work. That is important, he says.
Q: Under the treaty, there will be a new law in Rwanda. But we don’t know what it is.
Cleverly says that will be part of the ratification of the treaty in Rwanda.
Cleverly questioned by Lords committee about treaty with Rwanda
James Cleverly, the home secretary, is now giving evidence to the Lords international agreements committee about the deportation treaty with Rwanda. The committee just has half an hour with him, and Lord Goldsmith, the Labour former attorney general who chairs the committee, says he will be asking most of the questions to save time.
Sunak rebuked by UK's statistics watchdog for making misleading claim about government debt falling
Rishi Sunak has been rebuked by the UK’s statistics watchdog for making misleading claims about his record on bringing down government debt.
Sunak has made reducing the national debt one of his five priorities, and in a video posted on X after the autumn statement he said “debt is falling”. Later in November he told MPs at PMQs “we have indeed reduced debt”.
Sarah Olney, the Lib Dem’s Treasury spokesperson, wrote to the UK Statistics Authority to ask if there was any justification for what Sunak was saying and today, in a response, the authority’s chair, Sir Robert Chote, said Sunak’s words were misleading.
Chote said No 10 tried to justify Sunak’s “is falling” comment by saying he was referring to what was forecast to happen in 2028. Chote explained:
In this instance, the prime minister’s office informed us that both claims referred to the fact that the Office for Budget Responsibility (OBR) was forecasting that the underlying measure of net debt (excluding the Bank) would be falling as a proportion of GDP (although not in cash terms) in the final year of its five-year forecast, in line with the government’s target …
The average person in the street would probably not have interpreted the prime minister’s claims in the way that his office explained them to us and would likely have assumed that he was claiming that debt was already falling or that the government’s policy decisions had lowered it at the fiscal events – neither of which is the case. This has clearly been a source of confusion and may have undermined trust in the government’s use of statistics and quantitative analysis in this area.
Members of the public cannot be expected to understand the minutiae of public finance statistics and the precise combination of definitional choices that might need to be made for a particular claim to be true. So, when speaking about the public finances and making claims of this sort, intelligent transparency demands that ministers, other senior politicians, departments and political parties ask themselves how someone with an interest but little specialist knowledge is likely to interpret a particular claim and to explain themselves clearly if they choose to depart significantly from that in definitional terms. When a claim is made in abbreviated form, they should certainly be ready to explain the precise basis for their claim when approached and asked to do so after the event.
Commenting on the letter, Olney said:
Rishi Sunak knows he has no good story to tell on the UK economy so he has resorted to making one up. The least this no-growth prime minister could do is be honest about it with the British public.
Instead, he has reached for the Boris Johnson playbook and is undermining trust in politics. This is desperate stuff from a desperate Prime Minister and it is right that he has been called out on it.
Many school and college leaders in England are expressing relief that the government has finally published its draft transgender guidance, promised since 2018. But there is also criticism of both the timing, after term has ended for many schools, and the content.
Paul Barber, director of the Catholic Education Service, which supports more than 2,000 Catholic schools in England, said:
While some clarity from the government is welcome, Catholic schools have been responding to pupils over this issue for many years, on a case-by-case basis, with sensitivity and understanding that each individual’s needs vary. Catholic education focuses on the God-given dignity of each individual, regardless of what gender they are. We will be participating in the consultation in due course.
Leora Cruddas, chief executive of the Confederation of School Trusts that represents many academies, said:
The contents of this consultation will need to be considered carefully. It is a sensitive area, and one where legal opinion is sometimes contested. Given this, we will be seeking appropriate legal advice in order to understand the legal position of schools and trusts.
We have repeatedly asked the Department for Education not to publish major documents and consultations at the end of term and during holidays, which can add significant workload to school leaders and cause unnecessary confusion for staff and families.
Welsh government warns of 'toughest financial situation since devolution' as draft budget published including many cuts
Steven Morris
Wide-ranging cuts to public services in areas from policing to flood risk management, culture and sport have been announced by the Labour-led Welsh government as it attempts to shore up the NHS and support local councils.
Its draft budget, which was published today, also includes plans to reduce business rate relief for pubs, restaurants and shops, which means many will be facing rises in bills from April.
In addition, the budget flags up the possibility of increases in the cost of NHS dental care, university tuition fees and home care for the elderly and says that rail fares will have to rise.
Finance minister Rebecca Evans said the protection of the NHS and frontline local council services such as schools and social care was at the heart of the 2024/25 draft budget.
She said there would be an extra £450m for the NHS and the core local government settlement will increase by 3.1% but she warned that even with these rises, health boards and councils faced a “very difficult” year.
The Welsh government says that as a result of high inflation, Wales’ overall budget is worth £1.3bn less in real terms than when it was set in 2021 and the settlement, which largely comes from the UK government in the form of a block grant, is not sufficient enough to respond to the extreme pressures that public services, businesses and people are facing.
Evans said:
We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales. This is the toughest financial situation Wales has faced since the start of devolution. We have been presented with the most stark and painful budget choices in the devolution era.
Evans said the government will be carefully examining whether charges for NHS dental care, tuition fees and domiciliary care need to be raised but said there would be a consultation on this if the government decided increases were needed.
The biggest hits in the £23bn budget come in the rural affairs and climate change departments. The latter includes transport, housing and Natural Resources Wales.
The leader of the Lib Dems in Wales, Jane Dodds, said:
Huge parts of Wales are still being left behind with this budget, in particular rural Wales. We need more investment in our rural areas and more support for our farmers.
Andrew RT Davies, the leader of the Welsh Conservatives, criticised the Welsh government for blaming Westminster for its problems. He said: “Labour ministers have run Wales for 24 years, failing to reform public services and deliver results for the people of Wales.” He claimed “pet projects” like the wide-ranging 20mph speed limit in Wales was leading to cuts in areas such as rural affairs.
Cuts include smoking and obesity campaigns and plans to increase funding for mental health service has been shelved. The government has “reprioritised” £8.5m from flood risk management and water policy and says it will “carefully monitor the impacts to our flood risk management preparedness and response.”
It has taken the “difficult decision to reprioritise £16m of funding from within culture sport and tourism.” It is also “reprioritising” £7.5m from the budget for police community support officers adding: “Our policing partners will need to reshape their workforce.” It says that Transport for Wales will need to increase rail fares.
Business rate relief for pubs, shops and restaurants will be reduced from 75% to 40%. The Welsh government said the discount, which dates back to the pandemic, was never intended to continue indefinitely.
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