Starmer says trade war ‘in nobody’s interest’ and government will take ‘calm, pragmatic approach’
Keir Starmer starts by saying he spoke to President Zelenskyy on Monday, and Zelenskyy asked Starmer to thank Hoyle for attending.
On tariffs, Starmer says:
A trade war is in nobody’s interest and the country deserves, and we will take, a calm, pragmatic approach.
That is why constructive talks are progressing to agree a wider economic prosperity deal with the US. That is why we are working with all industries and sectors likely to be impacted.
Our decisions will always be guided by our national interests, and that’s why we have prepared for all eventualities, and we will rule nothing out.
Key events
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.
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.
Reeves declines to says if Richard Hughes will be reappointed as chair of OBR
Hillier asks if Reeves about reappointing Richard Hughes as chair of the OBR. His five-year term is coming up this year, but Hughes told the committee yesterday he had written to Reeves saying he would like to serve a second term. He said he had not had a reply yet.
Reeves says she will respond in due course. She does not give any indication as to whether or not she wants Hughes to stay, but she thanks Hughes and his team for his work.
Reeves says the three-year spending reviews will take place every two years, so the last year of one review period can overlap with the first year of the next one.
Hillier asked Reeves about a leak of the OBR forecasts ahead of the spring statement. This was the first time in 15 years a forecast had leaked, she said, describing this as “shocking”.
Reeves confirmed that an inquiry into this was underway. She did not give details.
Here is a live feed of the Reeves hearing.
Rachel Reeves gives evidence to Commons Treasury committee on spring statement
Rachel Reeves, the chancellor, has just started giving evidence to the Commons Treasury committee about the spring statement.
Meg Hillier, the Labour chair, started by asking her about her deputy, Darren Jones, using a pocket money comparison when discussing the personal independence payment (Pip) cut. Reeves says that was not appropriate, and that Jones was right to apologise.
Reeves says she did not use it herself. Hillier suggests she did, but Reeves says she is referring to something Reeves said when responding to a question put to her.
UPDATE: Here is the Reeves quote that Hillier was referring to. Reeves told the BBC:
My children and the chief secretary’s children are too young, but if you have a 16-year-old, and you say, ‘you know what, I’m not going to give you so much pocket money. I want you to go out to work’.
And then the [Office for Budget Responsibility] does an impact assessment and says your child is going to be worse off – well, they’re going to be worse off if they don’t go and get themselves a Saturday job.
But if they do go and get themselves a Saturday job, they’ll probably be better off, and they probably might enjoy it as well.
Now, that’s not the right analogy, but there are lots of people who have a disability that are desperate to work.
Reeves told the committee she felt no need to apologise for saying this herself, because she made this comment when explaining why Darren Jones said what he did (and why it was not appropriate). She was not endorsing it.
Severin Carrell
Severin Carrell is the Guardian’s Scotland editor.
Robin Harper, Harvie’s predecessor as Scottish Green co-leader, who became the UK’s first Green parliamentarian when he won a seat in Scotland’s first devolved parliament in 1999, said he believed the party had become “rather trapped” under Harvie’s leadership.
The party’s “principal speaker” from 1989 to 2008, Harper quit the Scottish Greens in 2023 after disputes over its pro-independence and pro-trans stances, and then joined Labour. Responding to the news that Harvie is standing down (see 11.48am), Harper said the party had become more intolerant and doctrinaire under Harvie’s leadership.
The Scottish Greens had “boxed themselves into a corner” on many issues by having too many red lines on policy, while its MSPs could be “grossly rude” to their opponents, Harper added. The party also had “internal freedom of speech issues”, he said. He explained:
The point of politics is surely to listen to other people and agree to disagree on more occasions than agree to agree. There are certain norms for politics to work.
Patrick has resigned after doing some very hard work. There’s no doubting his commitment to Green party ideals, but there are too many things which aren’t quite right.
Caroline Lucas, the first Green MP at Westminster, and a former leader of the party in England and Wales, disputed that account. She said:
Patrick has been one of the most influential figures in Scottish politics, and a formidable champion of green ideas. He helped transform the fortunes of the Scottish Green party – taking the party into government for the first time was an extraordinary achievement, delivering real change, including free bus travel for young people and much needed rent freezes.
He’s worked tirelessly to build the party’s credibility and has been a powerful voice of justice and integrity.
Ross Greer, a Scottish Greens MSP who may stand to replace Harvie in this summer’s leadership elections, said on social media:
Rewrote Scottish income tax, redistributing billions from high earners to those who need it; Delivered an emergency rent freeze; Grew our party membership to almost 10x what it was pre-indyref. @patrickharvie is one of the most consequential figures of the devolution era.
Britain does not support Israel’s expansion of military operations in Gaza, the Foreign Office minister Hamish Falconer told MPs.
Speaking in response to an urgent question tabled by the Green party (see 11.55am), Falconer said:
We are deeply concerned about the resumption of hostilities in Gaza.
The UK does not support an expansion of Israel’s military operations.
Continued fighting and more bloodshed is in nobody’s interest. All parties, including Israel, must observe international humanitarian law.
We urge all parties to return to dialogue and ceasefire negotiations, ensuring the return of all who have endured unimaginable suffering. It is clear that this conflict cannot be won by bombs and bullets but by diplomacy.
Aid should never be used as a political tool, Israel must restart the flow of aid immediately. Blocking goods supplies and power entering Gaza risks breaching international humanitarian law and should not be happening. We’re doing everything we can to alleviate that situation.
Foreign Office minister Stephen Doughty ducks question about how much US might contribute to cost of Chagos Islands deal
Stephen Doughty, the Foreign Office minister, has confirmed that the UK is now finalising its deal transferring sovereignty of the Chagos Islands to Mauritius, but refused to say when it will be concluded.
Speaking in the Commons in response on an urgent question from the Conservatives, Doughty said:
We are now working with Mauritius to finalise the agreement, and while it is in everybody’s interest to progress the deal quickly, we have never put an exact date on it and we do not intend to do so now.
The government will bring forward a bill to enable implementation of the treaty and parliament will, of course, also have the opportunity to scrutinise the treaty in the usual way before ratification.
Under the deal, although sovereignty will be transferred, the UK will continue to control Diego Garcia, the main Chagos island which is home to a US/UK airbase, for at least 99 years. It has been reported that the UK will pay £90m a year for the lease, but this has not been officially confirmed.
In response to a question from the Tory MP Andrew Murrison about how much the US would pay towards the cost of the deal, given that the airbase is a key American military asset, Doughty ducked the question. He replied:
We welcome the fact that the United States recognises the strength of this deal, and that’s because it is rooted in a rational and hard-headed determination to protect our security, that of the United States, our presence in the Indo-Pacific.
In response to questions from Priti Patel, the shadow foreign secretary, about how the deal would keep the military base secure, and about threats to the base from Iran, Doughty replied:
Security provisions to protect the base … will include full UK control over Diego Garcia, including control over the electromagnetic spectrum and unrestricted access to and the use of the base.
It will include a buffer zone around Diego Garcia in which nothing can be built or put in place without our consent. There will be a robust mechanism and review process to ensure no activity in the outer islands can impinge upon base operations. And indeed, there will be a prohibition on the presence of foreign security forces on the outer islands, either civilian or military.
On concerns of threats from Iran, he said: “For operational reasons and as a matter of policy, we do not offer comments or information relating to foreign nation’s military aircraft movements or operations.”
PMQs – snap verdict
Kemi Badenoch had a relatively good PMQs. But that was last week, when she had Keir Starmer on the back foot for a bit on mobile phones in schools, and no one was paying any attention because it was just before the spring statement. Today it was back to normal, with Badenoch underwhelming and Keir Starmer comfortably seeing off her various criticisms with punchy, but unsurprising, comments about the Tory record.
Badenoch’s best moment came when she asked about Birmingham council.
[Starmer] doesn’t want to talk about Birmingham and that’s because he knows the situation, so I’ll say it again: 17,000 tonnes of rubbish on Birmingham’s streets. Normally a state of emergency is called for natural disasters, not Labour ones.
But her main line of attack was on the economy generally, and particularly what the Conservatives are calling the “jobs tax” (the rise in employer national insurance contributions, which is just coming into force). There is plenty of economic evidence available to the effect that businesses say this will make them less likely to hire new staff, or more likely to cut hours, but instead Badenoch focused on the Tory claim that this will cost families £3,500 by the end of this parliament – a back-of-the-envelope calculation that has not been adopted by serious economists. Starmer brushed this aside quite easily, and mostly the economic exchanges sounded even more like a dialogue of the deaf than they usually do. Starmer and Badenoch threw slogans at each other, without engaging much with what the other had to say. Starmer’s slogans were more compelling, because they were mostly about how dire things were under the last government, which meant they were largely true.
This was the main problem for Badenoch, but another was that she did not get much back-up from her own MPs. Towards the end of the session Greg Smith asked a question that backed up the Badenoch “jobs tax” critique. (See 12.36pm.) On its own, a single question like this is unlikely to make much impression. But half a dozen of them might.
(To be fair to the Tories, they did not get half a dozen backbench questions. They just got three, and the other two were devoted to Scunthorpe steelworks and the child killer Colin Pitchfork. There is a lottery to decide who gets called at PMQs, and maybe the Conservatives were just unlucky in their allocation this week. But maybe some of them are not bothering to bid for a question. In total just four Tory MPs spoke at PMQs today – exactly the same as the number of Liberal Democrats who got a question.)
In the absence of forensic questioning, Starmer can see off Tory attacks by referring to the party’s record quite easily. In the chamber, that works well. But, in the country at large, these arguments may have a shorter shelf-life than Labour was hoping. More in Common published some interesting polling last week suggesting that only 27% of people think the last Conservative government is to blame for Britain’s low growth and that 51% of people think the government is focusing too much on blaming the Tories.
Alberta Costa (Con) says there is a parole board hearing coming up for Colin Pitchfork. Does Starmer agree that people who brutally rape and murder young women, like Pitchfork, should normally spend most of their natural life in prison.
Starmer thanks Costa for raising this. He says as DPP he dealt with cases like this, and he knows the impact they have on families.
