The Treasury is on the defensive today amid concern over a rise in the cost of government borrowing. Meanwhile, the foreign secretary has outlined a new sanctions regime targeting people smugglers – and the government claims it’s making progress removing illegal migrants.
Thursday 9 January 2025 21:15, UK
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By Alix Culbertson, political reporter
Lawyers for Liz Truss have sent a cease and desist letter to Keir Starmer, demanding the prime minister stop saying she “crashed the economy”.
A cease and desist letter demands the recipient immediately stop “unlawful activity”.
It is a serious warning and can be the first step towards starting court proceedings.
They often threaten severe legal actions if the recipient does not cease (stop) and desist (does not repeat).
This could include an application for an injunction – a court order to refrain someone from doing something.
Cease and desist letters normally state what action will be taken and the consequences if the demands are not met.
However, the letter from Liz Truss’s lawyers does not have any threat of legal action, just a request to cease and desist saying she crashed the economy and asks for Sir Keir to “refrain from causing any further damage to our client”.
Sir Keir’s spokesperson has said he’ll keep saying it anyway.
In this extra episode of Electoral Dysfunction, Jess Phillips sits down with Beth and reveals what she has lived through in the past few weeks.
Elon Musk accused the Labour MP of being a “rape genocide apologist”, putting her in the middle of a political storm.
As the safeguarding minister, Jess Phillips also explains what the government is doing to tackle violence against women and girls.
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Email us at electoraldysfunction@sky.uk, post on X to @BethRigby, or send a WhatsApp voice note on 07934 200 444.
Sir Keir Starmer has just met his French counterpart Emmanuel Macron at Chequers, the prime minister’s country residence.
The pair greeted each other at the door before heading inside for talks.
Sir Keir thanked Mr Macron for joining him to discuss a number of issues of “mutual concern”, including Ukraine and the Middle East.
He said: “It’s really fantastic to be able to welcome you here to Chequers.
“We talked about possibly having dinner here not so long ago, just a few weeks ago, so to be able to welcome you is a real privilege on my part.”
Mr Macron says the UK and France have a “lot of things to discuss”, including Britain’s relationship with the EU.
The government should ban people from standing for parliament if they are convicted of violence against women, a Tory MP has said.
Ben Obese-Jecty used the case of a Reform MP to make his point in the House of Commons, calling James McMurdock “a convicted criminal already in our midst”.
Mr McMurdock was jailed nearly two decades ago for repeatedly kicking his then girlfriend while drunk outside a nightclub – something not made public when he was standing to be an MP.
When the allegations were first revealed, the MP for South Basildon and East Thurrock said the pair had argued, and he had pushed her.
However, The Times later obtained information about his sentencing from the courts, which said he was locked up for 21 days in a young offenders’ institute for kicking the victim “around four times” in 2006 – when he was a teenager.
‘A heinous crime’
Mr Obese-Jecty said he believes “in the rehabilitation of offenders”, but “being sentenced for such a heinous crime means that you forfeit some of the privileges those of us who have never attacked a woman are granted”.
“One such privilege is being a member of parliament,” he added.
He made the comments during a debate in the Commons on violence against women and girls – something the Labour government has pledged to halve in the next decade.
MPs from other parties highlighted the absence of Reform MPs for the debate, in contrast to their involvement in sessions earlier in the week where they called for a new national inquiry into sexual exploitation.
What has Reform UK said?
A Reform UK spokesman said: “James McMurdock’s conviction and time in a young offenders’ institute is a matter of public record and a spent conviction.
“James is ashamed of his past, but his life since that time is a story of redemption. He has gone on to form a successful family and business life, now indeed in politics too.
“We hope that other young men who make bad mistakes in early life can learn from James that their lives can turn around.”
Sophy Ridge is joined by our political correspondent Liz Bates, who is talking her through a surprise intervention on grooming gangs by the mayor of Greater Manchester.
Andy Burnham said he’d back a “limited” national inquiry into grooming gangs.
He told the BBC this could compel people to give evidence so “those who may have charges to answer are held to account”.
Liz says this “does increase pressure, because Andy Burnham is in a slightly different category to a lot of the people who that have been calling for this inquiry”.
While the prime minister has accused the Tories of jumping on a bandwagon by calling for one, Burnham “does have a good level of credibility when it comes to this issue”.
Burnham feels there’s ‘still more to be done’
Liz notes Burnham gives an interesting reason for calling for an inquiry – local ones don’t have the power to “compel anyone to speak to them”.
Liz says that the mayor clearly felt previous inquiries were “limited” and there’s “still more to be done”.
“Andy Burnham cannot be accused of political opportunism when it comes to this issue, because he himself commissioned his own inquiry in Greater Manchester in 2017,” she says.
“The Labour Party cannot bat this off as just another voice reacting to Elon Musk.”
Sophy Ridge now asks about Liz Truss, whose lawyers have sent a cease and desist letter to Sir Keir Starmer over his continued claims she “crashed the economy” with her 2022 mini-budget.
The letter says the claim is defamatory and will “likely continue to cause serious harm to her reputation”.
Rupert Harrison, an economist and former Tory election candidate, “can’t imagine” how the situation would “play out in the courts”.
He adds: “It’s clearly not good for the Conservative Party to have Liz Truss back in the news. From her point of view, surely this is a case of if you’re in a hole, stop digging.
“She should just disappear for a few years and hope that it goes away.
“But it’s clearly not a sensible strategy. I don’t know who is advising her that it is.”
Now joining Sophy Ridge on the Politics Hub is Rupert Harrison, the former chief of staff to ex-chancellor George Osborne.
Sophy asks about the UK’s relationship with China, and whether Chancellor Rachel Reeves is right to build links to a country with so many human rights concerns.
The chancellor will head to China this week in a bid to build bridges, meeting with the country’s vice-premier He Lifeng in Beijing.
Mr Harrison, who ran as a Conservative candidate in Bicester and Woodstock last July, said it’s “not going to be a great look” if “market volatility is still going on”.
Government pursuing ‘strange strategy’
He says: “It’s a slightly strange strategy that the government has when we have President [Donald] Trump about to arrive in the White House.
“He is going to be putting in credible pressure on allies in Europe to get much tougher on China, particularly when it comes to technology, export controls and all the things he’s extremely concerned about.
“For the British government now to be trying to mend links with China in the middle of all that controversy, I think, is going to put them at odds with that, and it’s going to make their negotiations with the US over things like tariffs even more difficult.”
Now joining Sophy Ridge on the Politics Hub is former Liberal Democrat leader Vince Cable.
Mr Cable, also a former business secretary, was asked whether fluctuations in the economy are standard market turbulence – or there’s something more concerning going on.
“This is worrying, but it’s not a crisis,” he says. “A lot of the increase in the long-term interest rates… is internationally driven by essentially what is happening in the US.
“But Britain has to be careful, we are dependent on the kindness of strangers – we’re a borrowing country – so we’re very much affected by rising real interest rates.”
‘We should be avoiding panic’
Pressed if Rachel Reeves has had any impact on the economy, Mr Cable says the changes are largely an “international phenomenon”.
“The budget didn’t go down well, but so much because of what they did, but the problem goes back to opposition. I think the Labour Party ringfenced about three quarters of government revenue so it couldn’t increase taxes on the things that probably should have been taxed.
“So you were left with economically damaging measures like the increase in national insurance.”
But Mr Cable is clear: “We should be avoiding panic.”
Sophy points out his party’s leader Sir Ed Davey appears to disagree on whether Ms Reeves should go ahead with a planned trip to China, rather than stay behind to try to reassure the markets.
“She [Rachel Reeves] is much better concentrating on what she’s proposing to do, which is to maintain good economic relationships with both superpowers (China and the US),” he replies.
Our deputy political editor Sam Coates says while the government is “absolutely not” facing an economic crisis, the chancellor has a “big problem” in front of her.
Ultimately she’s falling victim to factors beyond her control, Sam says, when we see the cost of government borrowing going up.
The arrival of Donald Trump this month is perhaps the biggest of those, with his economic policies – tariffs, for example – potentially set to be even more inflationary.
“All of that is going to have an impact of pushing up the cost of government debt” here in the UK, says Sam – and you can watch a full breakdown from our economics and data editor Ed Conway below.
Starmer has trusted Reeves, but could that trust run out?
But, Sam adds, “there’s a feeling in Number 10 they aren’t keeping a close enough eye on Rachel Reeves and what the Treasury is up to”.
Some “feel a bit taken aback” by the response to her policies – they “trusted her” and things haven’t gone as they’d hoped.
If a spending squeeze is needed in the months ahead to deal with the economic problems, a “big set of cabinet fights” could be on the cards.
Keir Starmer’s backed her until now – but would it continue?
Sterling has fallen to its lowest level against the dollar since November 2023 – and UK borrowing costs have hit levels not seen since 1998.
This is really bad news, because it means the Treasury has less money to play with.
Watch Ed Conway talk you through the borrowing numbers:
Running the economy is actually nothing like running a household budget: it’s not as simple as saying, ‘we’ve got X amount coming in through tax, which means we can spend X amount on public services’.
The totals in the in and out columns keep changing because of things you can never fully control – growth, the cost of borrowing, the value of the pound, government bond markets.
And that’s what Rachel Reeves has found. It’s particularly difficult because she hasn’t left herself much headroom – there’s a razor-thin margin against the main fiscal rule.
An ‘Iron Chancellor’ is an inflexible one
She came into office promising to be the Iron Chancellor, sticking to her fiscal rules come what may.
It sounds strong and reassuring, but it’s also inflexible. She’s facing a worsening economic picture, but says she’s sticking to the plan.
That’s a bit like continuing to drive down the same road even when half the tarmac’s been ripped up. Things are going to get bumpy.
The independent Office for Budget Responsibility is preparing a new economic forecast in March, which the chancellor will respond to – and potentially make some adjustments to her plans.
If Rachel Reeves wants to stick to the rules, she needs more tax rises – or spending cuts.
If you thought October’s budget was painful, it may be that you ain’t seen nothing yet.
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