UK faces 'challenging' winter, says Rishi Sunak in bleak warning to Cabinet – The Telegraph

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Rishi Sunak has told his Cabinet the UK is set for a "challenging" winter as it faces the combined impact of high energy bills, soaring inflation, public sector strikes and lengthy NHS waiting lists. 
The Prime Minister said at a meeting in 10 Downing Street this morning that the country is entering a "challenging period" as his Cabinet colleagues set out some of the problems in their respective policy areas. 
Detailing what was discussed, the Prime Minister’s Official Spokesman said: "Looking ahead to winter, the Prime Minister said this would be a challenging period for the country, caused by the aftershocks of the global pandemic and the ongoing conflict in Ukraine. 
"The Chancellor of the Duchy of Lancaster updated on the cross government coordination taking place to mitigate some of the challenges expected this winter, including further strike action. 
"The Health and Social Care Secretary set out some of the issues facing the health system, where the pandemic had significantly exacerbated pressures, with 1,600 people waiting for more than 52 weeks for an operation pre-pandemic compared to 400,000 currently."
Follow the latest updates below. 
Thank you for joining me for today’s politics live blog. 
I will be back early tomorrow morning. 
Railway workers will stage a series of 48-hour strikes in December and January in the long-running dispute over pay, jobs and conditions, the RMT union announced.
The RMT said that more than 40,000 of its members will take strike action on December 13, 14, 16 and 17, and on January 3,4,6 and 7.
 
 
A Conservative former minister warned that tax rises may lead to a longer period of inflation as workers ask their bosses for more cash.
North West Hampshire MP Kit Malthouse told the Commons: "First we need to bear in mind that in a tight labour market tax rises can prolong inflation.
"If in effect through tax rises you give people a take home pay cut at the same time as they are seeing perhaps higher costs in their mortgages and higher costs generally from their costs of living, then they are likely to start to demand more from their employers.
"That has a possibility I am afraid of sparking a wage and price spiral, particularly as we know as the secondary effects of this inflation will take some time to work their way through the system. Possibly months if not years."
Kit Malthouse, the former education secretary, has warned Jeremy Hunt "we are not going to tax our way to prosperity" in the wake of the Autumn Statement, writes Dominic Penna. 
Mr Malthouse, who formed part of Liz Truss’s short-lived Cabinet, outlined his concerns about the £24 billion of tax rises set out by the Chancellor last week.
Speaking from the backbenches in a debate about Mr Hunt’s fiscal plan, he added: "My strong view is the only way we are going to get out of this is through growth.
"We need to inject growth into our economy and the only way we can do that is by letting those wealth creators free, by loosening the ties that bind them, by looking at the regulation and indeed the taxation on capital in particular so people are willing to take risks.
"One of the most dismaying choices, I have to say, in the Budget is the increase in capital taxes that is proposed, not least because that is changing the risk-reward ratio – which means it is less likely that people are going to go out there and start a business."
An investigation into Deputy Prime Minister Dominic Raab’s conduct could range more widely than just the two formal complaints made against him.
Mr Raab requested the independent investigation into the two complaints about his behaviour while he was foreign secretary and during his first period in the Ministry of Justice.
Downing Street today suggested it would be open to the individual appointed to carry out the inquiry whether they want to look at other allegations made about the Justice Secretary’s behaviour.
No10 has said a “suitably qualified, independent person” will investigate the allegations about bullying behaviour, although no appointment has yet been made.
Mr Raab has said he is "confident" he has "behaved professionally throughout".
A Tory former chief whip has criticised aspects of the Autumn Statement in her first major Commons intervention from the backbenches.
Wendy Morton, who was in charge of Tory discipline under Liz Truss, acknowledged "tough decisions need to be made" by the Government.
But she added: "Taxes from fuel, freezing the NICS threshold and the dividend tax changes – and, dare I say it, raiding the [research and development] tax credit scheme – don’t do much to encourage businesses and the many hardworking owners of small companies, who work hard just to keep their businesses going and to keep them growing."
Calling for "greater clarity" around Jeremy Hunt’s plan for growth, Ms Morton added higher taxes for van drivers and increases in council tax would "cause some difficulty to some of my constituents – the people who are juggling paying the bills with filling their car with fuel and paying mortgages".
Esther McVey, the Tory former work and pensions secretary, has savaged Jeremy Hunt’s Autumn Statement, suggesting it amounted to a "socialist paradise of tax and spend". 
Writing for the Conservative Home website, Ms McVey said: "Jeremy Hunt’s Autumn Statement did nothing to carve out a new conservative era of growth, less state intervention and people holding on to their hard-earned money. Quite the reverse: it was Gordon Brown-esque in its devotion to a socialist paradise of tax and spend."
She said that if Mr Hunt’s "socialist measures are not reversed by the time of the general election then I fear those hard working Conservative voters will punish us in the same way that we have just punished them".
There is a major Tory row looming into view on housing. 
More than 40 Tory MPs have signed an amendment to the Levelling Up and Regeneration Bill which would make housebuilding targets "advisory and not mandatory". 
"Accordingly, such targets should not be taken into account in determining planning applications," the amendment states. 
The draft legislation is due to be debated in the House of Commons tomorrow and on Monday and it is currently unclear what the Government is going to do about the amendment. 
Downing Street will be desperate to avoid a showdown and a damaging rebellion but at this stage it is unclear what compromise, if any, could be offered. 
Labour said today’s OECD forecast (see the post below at 11.18) is "yet more evidence of the Tories’ 12 years of economic failure". 
Pat McFadden, the shadow chief secretary to the Treasury, said: "Next year we will have the lowest growth in the G20 bar Russia. And we are forecast to be the only OECD economy that will be smaller in 2024 than it was in 2019.
"This is the Tory doom loop. A low growth spiral leading to higher taxes, lower investment, squeezed wages and poor public services. And they have no plan to get us out of it."
The OECD’s verdict on the state of the UK economy (see the post below at 11.18) is "damning" and should "shame" the Conservative Party’s recent run of chancellors, according to the Liberal Democrats. 
Sarah Olney, the party’s Treasury spokeswoman, said: "This Conservative Government has trashed the British economy and left hardworking families to pick up the tab. The OECD’s damning verdict of the Government’s economic record should shame the long list of this year’s Conservative Chancellors.  
"Months of Conservative chaos and an ever changing cast of Chancellors has added to the pain. We have all lost track of how many Chancellors there has been this year, but all of them are guilty of hiking taxes in the middle of a cost of living crisis and wrecking all hope of economic growth. 
"I don’t think the Conservative Party will ever be forgiven for this. The blame for this recession lies firmly at their door."
Iran’s football team declined to sing their national anthem ahead of their World Cup match against England yesterday in a moment which was interpreted as a potential expression of support for anti-government protests in Iran. 
Downing Street said Rishi Sunak would "applaud those who stand up against oppressive regimes". 
The Prime Minister’s Official Spokesman said: "When it comes to the Iranian team, obviously I am conscious of speculating on rationales behind things. I mean, obviously we applaud those who stand up against oppressive regimes.
"But beyond that, I don’t want to speculate, given what we do or do not know."
The Conservative Party pledged in its 2019 manifesto to "continue our progress towards our target of 300,000 homes a year by the mid-2020s". 
There has been much debate among Tory MPs about that target. Downing Street was asked at lunchtime if Rishi Sunak is committed to keeping it. 
The Prime Minister’s Official Spokesman said: "Yes. We have set out our position on that before and the Prime Minister has talked about that."
Downing Street was asked for Rishi Sunak’s reaction to the OECD’s grim economic forecast for the UK which showed it is due to be the worst performing G7 nation next year (see the post below at 11.18). 
The Prime Minister’s Official Spokesman said: "I imagine in the first instance he would point out that we are the highest in the G7 this year, rather than jumping straight to next."
The spokesman argued that economic challenges are "affecting different countries at slightly different times". 
Rishi Sunak believes all MPs will "want to justify all spending to their constituents", Downing Street has said in response to Parliament’s expenses watchdog advising that MPs can expense the cost of food and drink for Christmas staff parties to taxpayers (see the post below at 08.30). 
Asked if MPs should make such claims, the Prime Minister’s Official Spokesman said: “You’ll know questions on these sorts of arrangements are a matter for IPSA. They are independent of both Parliament and government, they set the allowances. 
“But the Prime Minister certainly doesn’t intend to use this and his view is that MPs will want to justify all spending to their constituents.”
Rishi Sunak warned his Cabinet this morning that the UK is facing a "challenging period" this winter. 
The Prime Minister’s Official Spokesman said: “Looking ahead to winter, the Prime Minister said this would be a challenging period for the country, caused by the aftershocks of the global pandemic and the ongoing conflict in Ukraine. 
“The Chancellor of the Duchy of Lancaster updated on the cross government coordination taking place to mitigate some of the challenges expected this winter, including further strike action. 
“The Health and Social Care Secretary set out some of the issues facing the health system, where the pandemic had significantly exacerbated pressures, with 1,600 people waiting for more than 52 weeks for an operation pre-pandemic compared to 400,000 currently.”
The controversial Manston processing centre has been emptied of every asylum seeker after more than 6,000 migrants were transferred to hotels in three weeks.
Robert Jenrick, the immigration minister, ordered the removals after warnings that it had become so overcrowded that migrants were being held unlawfully.
By the end of last month, more than 4,000 were housed in the centre which was designed to hold only 1,500 and process them within 24 hours. Some had been there for more than four weeks in potential breach of Home Office rules.
However, a source said: “All migrants have now been moved to contingency accommodation. It has taken three weeks, but we’ve got there.”
You can read the full story here
The UK economy will shrink more than any of the other G7 nations next year, according to a new report published by the Organisation for Economic Cooperation and Development (OECD). 
The report revealed a sharp downgrade for the UK economy, which is expected to shrink by 0.4 per cent in 2023 and grow by just 0.2 per cent in 2024. The OECD had predicted in September that UK growth would flatline in 2023.
Germany is the only other G7 country set to see a contraction in gross domestic product (GDP) next year, with a 0.3 per cent drop, according to the report.
Sir Keir Starmer did not commit to reducing immigration when he was asked about the issue after his speech at the CBI’s annual conference this morning. He also suggested Labour would not impose a net migration target. 
It means there is now a clear dividing line between Labour and the Tories on the issue. 
Rishi Sunak has said he believes overall immigration numbers should fall, recommitting to the Tories’ 2019 manifesto pledge to seek a reduction. The Prime Minister said: "I do want to get migration down over time."
A Labour government would not set a number for reducing immigration, Sir Keir Starmer has suggested. 
Asked if current levels of net migration are too high, he told the CBI’s annual conference: "On the question of numbers, I always start with what is driving the numbers when we discuss immigration. And if what is driving the numbers is our skills failure, or one of the big drivers is skills failure, then I think we need to address the skills issue rather than just talking about arbitrary numbers which is why I have set out the argument I have in the way I have made my speech this morning. 
"That does mean if we get this right that immigration will go down in some of those areas that are overly reliant on immigration. 
"But equally, we are not going to hold businesses back if there is innovation, technologies, where we do need talent from abroad. But where we have been over reliant and where we have been over reliant because we have failed on skills, I want to address that by fixing the skills issue."
Sir Keir Starmer has suggested a few times that a Labour government would not be able to do everything it wanted upon talking power because of the economic situation it would inherit. 
He was asked which policies he would likely have to shelve but he refused to be drawn. 
Speaking after concluding his speech to the CBI’s annual conference, the Labour leader said: "I am not going to draft the next Labour manifesto here on stage but what I am saying… we will inherit an economy that has been damaged by the last 12 weeks and the last 12 years and we need to fundamentally accept that as an incoming government. 
"Restoring stability is key. There is a cost to instability and we have been paying that cost over the last few weeks and over the last few years. That means restoring faith in our institutions, it means clear fiscal rules…"
Sir Keir said he accepted there would be some things a Labour government could not do "as quickly as we would like". 
Sir Keir Starmer claimed the Government’s Autumn Statement amounted to "stagnation dressed up in the clothes of stability". 
He said: "Last week you saw the sum total of their offer on growth. Stagnation dressed up in the clothes of stability. Decline paraded as tough decisions. 
"Tough decisions would be challenging their party on planning, on onshore wind, on industrial strategy. But they don’t have it in them. Don’t understand that to be a careful steward of the economy in a volatile world you need to be proactive, need to intervene to ensure stability and growth.
"I will put it simply. every business in this room has a strategy for growth. A nation needs one too because the headwinds we face – climate change, artificial intelligence, caring for an ageing society – mean that a hands off approach just isn’t fit for purpose anymore and I am not going to give up on growth that easily." 
On energy and climate change, Sir Keir Starmer said a Labour government would not run away from the battles to come. 
He told the CBI’s annual conference in Birmingham: "We not only see the battles ahead, we will run towards them. Because nothing wreaks of decline more than the idea Britain no longer knows how to build things. 
"I won’t accept that and with real partnership we will win."
Sir Keir Starmer said that he had looked online for the Government’s industrial strategy but when he found it, it said it had been "archived". 
He told the CBI’s annual conference: "The Government has archived Britain’s growth."
Turning to climate change, the Labour leader said: "I don’t see climate change as a risk, I see it as an opportunity."
Sir Keir Starmer told the CBI’s annual conference: "Britain’s low pay model has to go, it doesn’t serve working people, it is not compatible with grassroots growth."
He said a Labour government would have three priorities to improve wages: Economic stability, higher skills and green growth. 
The Labour leader said the last few months had shown the dangers of losing control of the economy as he said: "I won’t let that happen again." 
Turning to immigration, Sir Keir Starmer told the CBI’s annual conference that the nation must be "pragmatic on the basic lack of people" available to work in the UK. 
He said Labour’s immigration plans "will come along with new conditions for business". He said firms would be required to have a "clear plan to boost skills and more training". 
He said Labour will "help the British economy off its immigration dependency", adding: "Let me tell you, the days when low pay and cheap labour are part of the British way on growth must end."
Sir Keir Starmer told business leaders that "it is tough and it will be tough for a while" and the "burning question" right now is "what will we do differently". 
He told the CBI’s annual conference: "This has to be a turning point. Britain needs a new business model."
The Labour leader said it is "time for all of us… to get behind the idea both basic and radical that our country can grow in a way that serves working people…"
Sir Keir Starmer attacked the Government during his address to the CBI’s annual conference as he said the "economic damage they have done to our country is immense". 
He accused the Tories of having "created an economy with weak foundations". 
The Labour leader said that "this isn’t about global shocks, that is just an excuse" as he claimed the UK is stuck in a "vicious cycle of stagnation". 
Sir Keir Starmer is now delivering his speech to the CBI’s annual conference in Birmingham. 
The Labour leader said he was addressing the conference at a "pivotal moment for our country". 
Sir Keir said that Labour’s plan for the economy would result in a "fairer, greener, more dynamic country, a nation where working people succeed, where aspiration is rewarded, a Britain with its confidence, its hope and its future back".
He added: "I come with a simple message: Labour is ready."
Chloe Smith, the Tory former work and pensions secretary, has announced she will stand down at the next general election. 
In a statement posted on her website this morning, Ms Smith said: 
"I have been honoured to be Norwich North’s MP. It’s a fantastic job for a fantastic place, and it’s a particular privilege to be able to represent Norwich and Norfolk where I come from. 
"I am grateful to the thousands of Norwich citizens who placed their trust in me so many times.  I would also like to thank my team of volunteers who work so hard alongside me to help the community, and who have been so supportive, including during tough personal times. 
"I hope I’ve been able to make a difference, locally and nationally.  In 2024, after fifteen years of service, it will be the right time to step back, for me and my young family."
Shadow business secretary Jonathan Reynolds said he does not think it would be "useful" to set an "arbitrary" target on immigration.
Asked how quickly Labour could fill gaps in the labour market, and what proportion of workers would come from overseas, he told Sky News: "If you believe, as we do, that immigration must be fundamentally about the needs of the economy, with this balance between the investment going in, in skills and development in the UK, alongside people coming in, I don’t think it’s useful to set an arbitrary number."
Former Brexit secretary David Davis said the expenses watchdog had "missed the mood of the age" by telling MPs they could charge the taxpayer for food and drink at their staff Christmas parties (see the post below at 08.30).
Mr Davis told TalkTV: "I didn’t see the story, so I’m quite surprised. But I think it’s bonkers, frankly. It has missed the mood of the age if that’s what they’re saying.
"There are lots of things we have to spend taxpayers’ money on in terms of providing offices and services and so on. I’m afraid Christmas parties seem to me a bit of a strange pick, particularly this year of all years."
David Davis, the former Brexit secretary, has accused British industry of being "lazy" on workforce training in recent decades.
He told TalkTV: "I used to be a director of a FTSE 100 company… I always took the view, we always took the view in that company, it was our job to train our (workers). To invest in people.
"I mean, I’m afraid British industry has got lazy over the last 20, 30 years."
David Davis, the former Brexit secretary, said Jeremy Hunt personally told him reports of the prospect of a Swiss-style relationship with the EU were "not true".
He said he was asked for his thoughts on the suggestion by The Sunday Times, which carried the initial story stating "senior government figures" were planning to put the UK on a path towards arrangements similar to Switzerland’s.
He told TalkTV: "I got a call at 8 o’clock on Saturday night… very late for a Sunday paper to call. I thought: ‘Good Lord, what have I been caught doing?’
"I was asked about this and I thought: ‘This is bonkers’. I was around when the Swiss were negotiating this deal, 20 deals actually, as it turns out, and it was awful for them.
"I rang up Jeremy and said: ‘What’s going on?’ and he said: ‘Oh god, that’s not true’. Then he said: ‘They must have over-read something or overinterpreted something’."
Shadow business secretary Jonathan Reynolds has said he doubts any MPs will put food and drink for their staff Christmas parties on expenses, despite being allowed to do so, as he suggested IPSA had been a "little bit naive" to issue such guidance (see the post below at 08.30). 
He told Times Radio: "People have not been asking for this. I don’t think anyone will use it. This is our regulator … the independent body that runs the MPs’ expenses system, which is a system for staff and rent of your office and all of that kind of stuff, you know, being a little bit naive, to be honest, because if they publish stuff like this, you will get a story like this.
"I understand why people cover it in this way but I doubt anyone will be using it. People will not have been asking for it. And (maybe) Ipsa need to be a bit more savvy in terms of how they present what they’re doing on this."
Former international trade secretary Liam Fox said it is a "free country" when asked about reports Rishi Sunak is registered with a private GP. He also said he does not personally have private health insurance.
"The Prime Minister and the Government are judged by what they do for the NHS… what they do with their private money is up to them," he told Sky News.
"I don’t have private insurance but I don’t in any way think that people should not do that if that’s what they choose to do.
"Anyone is entitled to do that, this is a free country. It cannot be that we tell some people they cannot do that. The Government is judged by what it’s doing for the NHS and the NHS is getting a lot of extra money."
Public sector net debt hit £2.5trillion at the end of October 2022, according to data published this morning by the Office for National Statistics. 
The numbers prompted the Liberal Democrats to accuse the Government of "trashing our economy". 
Sarah Olney, the party’s Treasury spokeswoman, said: "These figures reveal just how badly the long list of Conservative chancellors have trashed our economy. 
"This Government has blown a massive black hole in Britain’s finances and is now expecting hardworking families to pick up the bill."
An absurd ruling from IPSA. In all the times I’ve taken my staff team out it never once crossed my mind that it should be expensed. I couldn’t do the job without my team behind me. They work hard all year round, and it’s a pleasure to thank them at Christmas. IPSA should reverse. https://t.co/tbrNwBzhIP
MPs have been told for the first time they can expense the cost of food and drink for Christmas staff parties to taxpayers.
But the "hospitality" claims cannot include alcoholic beverages, guidance from the Independent Parliamentary Standards Authority (Ipsa) states.
The expenses watchdog issued the advice in response to "frequently asked questions" about how MPs and their staff can celebrate during the festive season.
Ipsa confirmed that "MPs can claim the costs of food and refreshments for an office festive" in their parliamentary or constituency offices, but warned "no claims are allowed for alcohol".
The cost of "festive decorations for their office" can also be claimed, the guidance first reported by the Daily Mail says.
Jeremy Hunt defended the Government borrowing figures for October (see the post below at 08.24) as he said it was "right" that ministers acted to help people through the cost-of-living crisis. 
He said: "It is right that the government increased borrowing to support millions of business and families throughout the pandemic, and the aftershocks of Putin’s illegal invasion of Ukraine.
"But to tackle inflation and ensure the economic stability needed for long-term growth, it is vital that we put the public finances back on a more sustainable path.
"There is no easy path to balancing the nation’s books, but we have taken the necessary decisions to get debt falling while actively taking steps to protect jobs, public services and the most vulnerable."
Government borrowing hit £13.5billion in October this year, reflecting the first costs of the energy support schemes for households and businesses. 
The Office for National Statistics (ONS) said the figure was £4.4billion higher than the same month last year and was the fourth highest figure for October on record.
The figure for October was, nevertheless, below the expectations of economists, with a consensus of experts predicting borrowing of £21 billion for the month.
Shell is reviewing plans to invest £25bn in Britain’s energy system after Jeremy Hunt raided the industry for £55bn in windfall taxes (you can read the original story here
The Chancellor’s extension of the windfall tax at the Autumn Statement came after many months of Labour calling for the move. 
Jonathan Reynolds, the shadow business secretary, was asked this morning if he wanted to reconsider his party’s backing for the proposal in the wake of the Shell news.
He told LBC Radio: "No, I don’t. The first thing I would say is whilst the Government have moved towards our position on windfall taxes they do have an enormous loophole for fossil fuel investments which actually shell would benefit from considerably."
He added: "This is about profits that have accrued from that invasion of Ukraine. I think it is fair and proportionate and actually to the benefit of the economy as a whole because high energy prices for businesses as well as households obviously has a huge impact on the economy. So I think our position was the right one."
Jonathan Reynolds, the shadow business secretary, said immigration will continue to play a "significant role in our national life" but he argued it needs to "work better for businesses". 
Speaking to LBC Radio, he said: "I think immigration does have to work better for businesses in this country. DSkills and labour shortages are the number one issue businesses raise with me no matter what the sector. 
"So I understand that. No one is saying immigration is not going to continue to play a significant role in our national life in filling those shortages. 
"The question really should be is it the only way we would seek to do that?"
Sir Keir Starmer, the Labour leader, will use a speech at the CBI’s annual conference today to say that the UK must end its economic dependence on immigration. 
Jonathan Reynolds, the shadow business secretary, is on the media round for Labour this morning and he was asked if he believed that some sectors of the economy had become "hooked" on cheap overseas labour. 
He told LBC Radio: "I think there are some sectors that have historically had business models that have been very dependent on overseas labour. 
"If you look at the sectors that are most reliant on foreign workers coming to the UK, healthcare is one of them, so is IT, and I think there are many people in this country who would like careers in those sectors. 
“No one is in any way denigrating the fantastic contribution people make when they come to this country. But immigration is high to the UK, there is no doubt about that, we have had I think net inflows of people to the country every year since 1994 so no one is saying we are not going to be a country open to the world and people coming to do a job for us here in the UK. 
“But it shouldn’t be the only way. I think a system which also alongside that welcoming offer to people around the world does prioritise skills and training in the UK, does make sure we are investing in new technology at the same time, has an eye on pay and conditions. That is, I think, a far better system overall.”
Liam Fox, the former international trade secretary, said the suggestion that the UK could seek a Swiss-style post-Brexit deal with the EU is a "political non-starter". 
The prominent Tory Brexiteer told Sky News: "First of all, I think politically reopening the debate on Brexit is the very last thing that we need at the present time and this talk about a Swiss relationship – for the Swiss they have to pay into the European budget, they have to accept free movement of people and they have to accept European laws over which they have got no control. 
"I don’t see that as being in line in any way shape or form with the spirit of our referendum or our exit from the European Union. 
"I think it is a political non-starter, it is a waste of everybody’s energy and we should just get on with the job in hand."
There were reports at the end of last week that Rishi Sunak had decided under his administration the Government would not send out a minister onto the morning media round every day of the week.
Apparently ministers will only appear when they have an announcement to make.  
Today appears to be the first day of the new regime, with no Government voices on the airwaves. Labour is likely to be thrilled by the move given that its representatives will be able to make their points without any challenge from the Tory frontbench. 
Good morning and welcome to today’s politics live blog. 
There is a busy day ahead in Westminster, with Rishi Sunak convening his Cabinet,  Sir Keir Starmer addressing the CBI annual conference and Dominic Raab facing a grilling in front of the Justice Select Committee.
I will be on hand to guide you through the key developments. 
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