Labour’s economic mission for highest growth in G7 not ambitious enough, says leading economist – UK politics live | Politics

It has not been a great week for Boris Johnson. First, we learned that the police are investigating fresh allegations that he broke lockdown rules when he was PM. Then it emerged that the Covid inquiry is determined to get hold of his unredacted WhatsApp messages and diary entries, and has rejected a legal submission from the Cabinet Office saying this material should be held back.

As a consequence of being shopped to the police as a result of information uncovered by the Cabinet Office lawyers, Johnson has now in effect sacked the government laywers working for him and is looking for new ones. In litigation, falling out with your own solicitor is not generally a good development.

As if that was not enough, in the Commons yesterday, his headline “40 new hospitals” pledge got scaled back. And then, less than an hour later, the government announced it was dropping the kept animals bill, which was introduced when he was PM and to which his wife Carrie, a passionate environmentalist, was very committed.

There is more negative news about him in the Times today. Steven Swinford says that Johnson was all set yesterday to release a photograph of a family event at Chequers that he thought might help to quash claims he broke Covid rules there – only for Johnson to realise it might be interpreted otherwise. Swinford says:

Johnson was prepared on Thursday to release a photograph of one of the visits on June 14, 2020, when he met his elderly mother and sister for lunch in the Downing Street garden. At the time outdoor meetings in groups of six or fewer were permitted and Johnson believed that the image exonerated him as there were five people in the garden.

Social distancing guidance stated that people from different households should stay more than two metres apart. The Times has been told that Johnson, his sister Rachel, his late mother Charlotte and his son, Wilfred, are close to one another in the picture. Rachel is holding the baby and Charlotte is holding the baby’s foot.

The former prime minister subsequently chose not to release the image.

Johnson insists that Covid rules were not broken on this occasion, or any other.

The Times story may help to explain why Johnson’s allies have given an extraordinary statement to Politico’s London Playbook claiming that former aides are telling lies about him and threatening to retaliate. The statement, attributed to “Johnson’s team”, says:

We are aware of a briefing campaign that is trying to deliberately manufacture false claims about events at Chequers and Downing Street. This is being run by former advisers who are now willing to say anything about Boris in an attempt to discredit him, even if it is a total lie. These individuals should watch themselves carefully as there are revelations about their own conduct to be made.

In similar vein, the Express has a story claiming that Johnson’s allies say they might report the Cabinet Office officials to the police to the police themselves, arguing that they are wasting police time. This, obviously, is ludicrous.

Good morning. Jeremy Hunt, the chancellor, has given an interview to Sky News in which he said that he would be comfortable with interest rate rises pushing the economy into recession if that had to happen to bring down inflation. Asked if he was “comfortable with the Bank of England doing whatever it takes to bring down inflation, even if that potentially would precipitate a recession”, Hunt told Sky’s economics editor, Ed Conway:

Yes, because in the end, inflation is a source of instability.

And if we want to have prosperity, to grow the economy, to reduce the risk of recession, we have to support the Bank of England in the difficult decisions that they take.

I have to do something else, which is to make sure the decisions that I take as chancellor, very difficult decisions, to balance the books so that the markets, the world can see that Britain is a country that pays its way – all these things mean that monetary policy at the Bank of England (and) fiscal policy by the chancellor are aligned.

Hunt’s willingness to actually answer the question is commendable. But in the Treasury right now there are probably communications advisers who, in between pulling their hair out, are reminding the chancellor that there are reasons why politicians dodge questions in interviews.

Graeme Wearden has more on this on his business live blog.

The Hunt comments are a gift to Labour, but the opposition is also being criticised on economic policy this morning. Jim O’Neill, the former Goldman Sachs chief economist and a former Treasury minister, has described Labour’s economic mission, to secure the highest sustained growth in the G7, as “daft”.

In an interview with the Power Test, a political podcast hosted by Ayesha Hazarika and Sam Freedman, O’Neill explained:

It [Labour’s economic mission] is kind of daft really. I like a lot of what’s behind it. But it’s a bit silly. I’m somebody that spent the best part of 40 years looking at global growth and, obviously, there’s another six countries you can’t do anything about how they grow directly. But, much more importantly than that, it’s not a really credible sign of ambition because part of the problematical broader world we’re living in is that most of those G7 countries don’t grow very well either.

O’Neill was a Treasury minister in David Cameron’s government for about a year and a half, and so you could try to dismiss this as just a Tory attack. But O’Neill was given a Treasury job on the grounds that he was an expert, not a Tory, he sits in the Lords as a crossbencher, and last year Rachel Reeves, the shadow chancellor, proudly announced that he was advising Labour on start-ups policy. He is not a Tory stooge.

In other parts of the interview, O’Neill was more sympathetic to Labour thinking. He said borrowing could be beneficial.

We have to get out of the conventional way of thinking that, frankly, has taken hold across the whole of the world because otherwise we haven’t got the slightest chance of getting out of the situation we’re in.

At the heart of conventional economic thought is that debt is bad and so you have got to avoid it. A lot of that actually is pretty sensible. But it doesn’t distinguish between government spending to create more wealth and assets, and government spending to consume or maintain our nice little cosy lives. And there’s a huge difference.

And he called for more investment in infrastructure, arguing that bodies like the Office for Budget Responsibility and the Infrastructure Commission should get more authority. He explained:

You basically think of it as a parallel for fiscal policy of what we did with the monetary policy council when it came into existence. And you ask these guys who’ve got independence to say, what are the areas of investment spending that are going to create? What economists would call very strong positive multipliers … to create very significant growth and wealth for the future.

There is not a lot in the diary today. Parliament is in recess, and we’ve got a bank holiday weekend coming up. But Keir Starmer is campaigning in Scotland, and due to do broadcast interviews.

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