← Newscast
Newscast
Andy Burnham Pauses Prison Early Release Plan
00:38:53
The Prime Minister orders an ‘urgent review’ into plan to release some prisoners early.
Loading summary
Transcript117 lines
- [00:00]
Dominic Casciani
This BBC podcast is supported by ads outside the uk. Christmas in July is back. Fresh pine, warm spice all July long. Save up to 20% on holiday fragrances, plus a free blanket with orders over $100. No winter required. Visit pura.com
- [00:24]
Adam Fleming
hello. Today feels like Andy Burnham has made his first big prime ministerial decision. That wasn't something he'd plotted out in advance in a grid because he has decided to pause the early prisoner release scheme that he inherited from Keir Starmer. So we will discuss what's going on and the implications on this episode of.
- [00:42]
Helen Miller
Newscast, Newscast, newscast from the BBC.
- [00:46]
Simon Jack
Humanity's next great voyage begins. You know, I like my buses.
- [00:49]
Adam Fleming
I'll come on to them.
- [00:50]
Simon Jack
I see that he was, I guess,
- [00:51]
Helen Miller
the mayor of a town. Ooh la la.
- [00:53]
Simon Jack
Thinking about it like a panto helped.
- [00:56]
Helen Miller
Do we play music now or what do we do? And what will you do? Stare at a wall.
- [01:00]
Adam Fleming
Hello, it's Adam in the newscast studio and we are recording this part of this episode at six minutes past four on Thursday afternoon. And the news broke just a little while ago that Andy Burnham, the new Prime Minister, is going to pause the early release scheme for prisoners that he inherited from the previous government led by Keir Starmer, where David Lammy was the Justice Secretary and the person who can help us work out what is going on and what it might Mean is the BBC's home and legal affairs correspondent, Dominic Casciani. Hi, Dom.
- [01:29]
Dominic Casciani
Hi. Hi, Adam.
- [01:30]
Adam Fleming
So before we cover the breaking news, just explain what this early release scheme is actually was and how it was going to be rolled out.
- [01:38]
Dominic Casciani
Have you got until tomorrow morning? Because this is a long story. Yeah, okay, so look, this, this has been well publicized, it's been through Parliament. Anyone could read up about it if they wanted. So any mps who are expressing surprise if that were the case? Well, it's been there to read and understand. In essence, we all remember that when Starmer came into power two years ago, they were facing a crisis in the prisons. The prisons were full. They needed to have an emergency release sch to free up capacity so that criminals getting sentenced could find a cell and go somewhere. The. The end goal though, however, was to completely radically reform how sentencing works and how releases work so that the government and its words could avoid forever another such crisis taking hold while at the same time building more prisons. And the scheme that was due to come into effect in September, which was passed by Parliament, is critical part of that plan. Now, in essence, what it involves is that at the moment, most offenders who are on a Fixed term. So let's say a burglar gets four years. They'll get released from that jail cell after serving two years, and then they'll, They'll. They'll serve the balance, the other half in the community on. On a license. So there'll be.
- [02:56]
Adam Fleming
So mathematically, it was going from somebody on that kind of sentence being released or considered for release after two thirds of their sentence had passed red that down to 50% of their sentence being served.
- [03:09]
Dominic Casciani
No, no, it's a little bit more complicated. So just up until now, basically, most offenders serve half of their time in prison and half in the community. Under the new scheme, those offenders would only serve a third in prison. So it goes from a half down to a third. Right, right. There's then a second category of offenders who are more serious, which includes basically an awful lot of sexual offenders and violent offenders. They would go from serving two thirds in prison to down to serving a half. So, in essence, most prisoners on fixed sentences were going to get a sizable chunk taken off. And the idea was that they'd served us in the community, there'd be additional monitoring and if they were making progress in rehabilitation, they'd stay out of prison for the remainder of their sentence. And critically, what that does. Let's just put aside a question about whether this rehabilitation plan is going to work and whether the resources are there. But critically, it frees up an enormous amount of space in the prison estate. We've got about 90,000, 88, 89,000 prison places at the moment. We're a little bit below that at the moment because of the current release scheme. About another 6,000 would have come out under this scheme from September. Now, here's the key thing. Not all 6,000 would have come out literally in one go in September. We wouldn't be in a situation with having cameras outside every prison in England and Wales.
- [04:29]
Adam Fleming
It would be a staggered thing based on when they'd gone into prison in
- [04:31]
Dominic Casciani
the first place and the length of sentence. So from September, effectively, offenders who were serving less than about 19 months would be eligible for getting out at this one third point, and then all the way through to June of next year. And that's when prisoners serving over 12 years, so really chunky sentences, they would then start to be eligible for release as well. And that final date in June would have included two of the young men who were convicted of the manslaughter of PC Andrew Harper in 2020, jailed that year because they got sentences of 13 years. When you do the sums, they would have basically been eligible for this earlier release next June.
- [05:16]
Adam Fleming
And then just explain how the victims of the crimes were. The people were going to get shorter sentences, were being informed about all of this. There was a whole slew of letters going out.
- [05:26]
Dominic Casciani
Yeah, I think. And I think this is where a lot of the controversy has occurred. So, in essence, what happened was, despite all the publicity in Parliament and, you know, in parts of the media about this scheme, you know, realistically, people have to live their lives and they won't have been across the detail what was going on. And my understanding is there's been a right old debate in the Ministry of Justice and with prisons as well, about how to manage and communicate this. Victims are entitled to know when an offender comes out of prison. Not every victim wants to know, but normally what happens when someone goes to jail. The victim is asked, do you want to be kept informed about what's going to happen to them in future? So, in essence, what happened in recent weeks, weeks, the MOJ began banging out letters to everybody who was on the list, saying, by the way, the person who committed your crime, they could be coming out under this scheme from the 2nd of September. So one of the letters I've seen, which is dated June, so before Andy Burnham came in, explains to the victim of a crime this is going on. The problem is these letters are pretty vague, pretty ambiguous and lacking in detail. And this has sparked an awful lot of alarm and distress and concern because of people. People are saying, well, when is this individual getting out? The Ministry of Justice hasn't been able to tell people when the. When they're coming out because officials haven't recalculated literally 6,000 sentences. I mean, that's an enormous exercise they've got to go through to work out who really can get out on what date. So a second letter is supposed to be following this up. My understanding is there's been such concern how these letters have been framed so far that the victims Commissioner, Claire Waxman, is now involved as well to try and get it right. I think, in fairness, I think it's really important to be fair here to the Ministry of Justice. It's absolutely apparent they were doing this from the best of intentions, considering that they wanted to let people know sooner rather than later and decided clearly that if they sat on this and done nothing and left it last minute, well, you can imagine how that would have gone down. So they felt, let's get a letter out and then we'll follow up with further detail.
- [07:34]
Adam Fleming
And also, as you were saying a couple of minutes ago, this Wasn't like the old early release scheme, which was a sort of emergency temporary ministers just pushing buttons to try and solve the prisons crisis. This was as a result of a piece of legislation that had gone through the House of Commons. The House of Lords had a big process behind it. This wasn't out of the blue at all.
- [07:55]
Dominic Casciani
That's right. I mean, the old system, which was called SDS40, which basically meant that on an emergency basis, an awful lot of lower level offenders were getting out at the 40% mark. That was to ease those pressures. Without that, the practical reality that the Starmer government was facing in the summer of 24, and remember, we had the riots then as well, was that literally the courts were on the edge of deciding not to actually jail people because there's nowhere to send them. And that meant, in turn, the police may have been under pressure to stop charging people. And that meant crimes wouldn't be solved. I mean, it's a whole, like, sausage factory going on here. You have to move these people through the system. I think the interesting thing is, where does the PM go from now on this? So the plan is there in primary legislation. So if Andy Burnham doesn't like this plan and he wasn't an MP when this went through, we'd have to have a recall of Parliament or wait until MPs are back in the autumn to completely unpick this. What an extraordinary situation that would be, the government reversing a major piece of legislation like that. But the one thing he can do at the moment is pause the timetable for these releases, because that's being done under those legendary secondary ministerial powers where they can get on with a detail without bothering. Yes.
- [09:10]
Adam Fleming
Where the law gives the. The Minister the power to make a decision down the line.
- [09:16]
Dominic Casciani
Yes, that's right. That's right.
- [09:18]
Adam Fleming
And what do we know about this pause, then? And I know it's. It's hard to work it out because it's just happened, but what does it look like?
- [09:24]
Dominic Casciani
Well, what Andy Burnham has said this afternoon in the statement is that keeping the public safe will always be my top priority. I'm working closely with the new Justice Secretary, that's Alex Norris, and have instructed my team to put a pause on the changes that were due to start in September. No prisoners will be let out under this policy until we've concluded an urgent review and done everything we can to minimise the risk to the public. Where changes are needed, we will not hesitate to make them. Now, unpacking that in policy legal terms, that means the first thing they've got to do is use their ministerial powers to basically scrap the timetable which is in place. And that was signed by Lord Timson, the outgoing Prisons Minister, in June. So that will have to be lifted, one imagines, unless they decide at the end of day to go ahead of that program and that schedule, that phased introduction of these early releases starts on the 2nd of September. So the question is, are they going to scrap that 2nd of September date or are they going to. Or are they going to keep it or change some of the other dates? The problem they've got then is they've got prison governors who are going to be tearing their hair out, metaphorically speaking, because they'll say the numbers are going to start creeping up and we're going to run out of cells again. That's their concern. And the entire program, and this all goes back to Shabana Mahmood when she was Justice Secretary. The whole thing has been designed very, very carefully to avoid a series of peaks in the prison population where they would potentially run out of cells before all the new prison capacity comes online, with big, frantic building program going on all around England and Wales to create new spaces. So there's a real, to use a football commentator analogy, there's a real squeaky bum time here come the autumn because if they paus scheme and they're not shifting people out of prison fast enough, then they could run out of cells. And that's, that's a position no government wants to be in. And this government, well, at least the Starmer government, said they would never be in that position again.
- [11:32]
Adam Fleming
Well, on that note, our colleague Seema Kata just posted on the BBC News Live page about this story a quote from a prison officer saying, we are super overcrowded. This isn't great news. If we don't let people out in September, we could be at a critical point come November when we're at full capacity. It's a bonkers decision, they said. So.
- [11:52]
Helen Miller
Yeah.
- [11:52]
Adam Fleming
Reflecting what you were theorizing there. Okay. Well, it does seem to me, though, that there's a few, there's a few options for the government here. This pause could mean multiple things. And for example, do you continue to apply the early release to people on shorter, less serious sentences while abandoning it for people who are serving sentences for the most serious crimes? Because as you said at the start, there's already two sort of tracks for this.
- [12:19]
Dominic Casciani
That's right. There's another dimension to this as well, Adam, which is whether or not these early releases are going to work in terms of the way the government has effectively presented these reforms. Shabana Mahmood, when she started pushing this through the House before she was reshuffled to the Home Office, said this was really about creating prison outside of prison. And what she meant by that was that you can control people's lives, you can control what offenders do without putting them behind the bars of a jail. And you're basically leaning into using a lot of technology there, electronic tagging, really, really careful use of curfews and monitoring by probation. And that's the problem there is the monitoring by probation, because no end of. Parliamentary reports have warned that the Probation Service isn't in a fit state to manage all of these risks. And that's not criticism of the individual officers. This is simply a function of the fact that they've been really, really hit by constant revolution over about a decade. They've been really understaffed, their workload is tremendous. So if you've got a probation officer who's dealing with, let's say, 20 offenders at the moment and trying to work out which ones are safe to sort of like progress and to be held back into society, and then suddenly 20 more added under this release scheme, you've got a real question there about whether or not they've got the resources to make sure that everybody's safe. Because in theory, under this scheme, if you stay on the straight and narrow, you stay out, but if you step out of line, you can be sent back to prison. If the prison population starts to go up, because Andy Burnham tweaks this timetable to keep some offenders in for longer, you start to wonder, hypothetical question is, you start to wonder whether there'll be a temptation not to send some offenders back to jail, even though potentially in another time they would have been have been sent back for breaching a license condition. And obviously that then plays into community safety. And I think there's an enormous amount of concern there among victims of domestic violence and abuse, because it's those kind of. Those kind of offenders who may have received relatively short sentences, maybe two or three years for the way they've treated a woman.
- [14:32]
Adam Fleming
Well, could be offend with impunity.
- [14:34]
Dominic Casciani
Indeed. And I think that's the real concern
- [14:36]
Adam Fleming
among lots of people, lots of potential knock on effects. Dominic, thank you very much. Also, just before you go, I was making the theory earlier on in this episode that actually this is Andy Burnham, probably one of his first kind of classic Prime Ministerial day to day decisions, as opposed to something that he'd like planned in advance on a grid to establish himself in the in the nation's consciousness, this is him just having to govern like a normal Prime Minister midterm.
- [15:00]
Dominic Casciani
It starts to feel that way, doesn't it, Adam? Because it starts to feel like those moments where you have, you know, politics is about choices and he has to choose here what to do. He's inherited a system which, to be frank, you know, the Labour Party broadly backs. They understand the need for this. Pragmatically across criminal justice, it has a lot of backing, even though there's a lot of concerns about whether it can really, really deliver everything that the government hopes he's going to have to make a choice here. And if he makes a choice that he's then got to sell to the public, well, you know, he's got to work out how he does that.
- [15:33]
Adam Fleming
And a big early challenge for the new Justice Secretary, Alex Norris, who's not exactly a household name yet, but may be about to become one. Dominic, thank you very much. Thanks.
- [15:42]
Dominic Casciani
Cheers.
- [15:42]
Adam Fleming
And there was also a more planned announcement from Andy Burnham today, another thing as part of his breathing space strategy. This time it is for pubs and music venues and involves a tax cut. And I was talking about that earlier with Simon Jack, BBC Business Editor, and Helen Miller from the Institute for Fiscal Studies. So here's their take on Andy Burnham's third cost of living announcement this week. Hello, Simon.
- [16:12]
Simon Jack
Hello, Adam.
- [16:12]
Adam Fleming
And rejoining us is Helen Miller. It says director of the Institute of Fiscal Studies, but it's for fiscal studies, isn't it? Sorry, Helen.
- [16:19]
Helen Miller
It is. That's okay.
- [16:20]
Adam Fleming
I've written your organisation down incorrectly, but you spotted it immediately for fiscal studies. Yeah. Accuracy, accuracy. Right. Simon, what was today's 6am government press release drop?
- [16:29]
Simon Jack
It was a further 20% cut in business rates for pubs, live music venues and other venues, but not the very biggest live music venues. And this was meant to spread some good vibes on the high street, because Andy Burnham made it very clear in some of his early speeches that he sees the high street as a kind of barometer for how people are feeling in the places that they live, devolution being the whole thing and localism being the whole thing. And as part of that package, the government has decided, not for the first time, that the pub is a hallowed institution and deserves special treatment. And music venues, which the rest of the hospitality industry would very much like. And while they don't begrudge the extra support, the pubs have gotten there, I would say hopping mad that they haven't seen the same treatment because they think they're equally important to the Fabric of the local high.
- [17:22]
Adam Fleming
So this isn't applying to restaurants or hotels or cinemas?
- [17:26]
Simon Jack
No, correct. Some of whom have seen even bigger rate rises than pubs have seen in the last couple of years.
- [17:31]
Adam Fleming
And you said the word further because this is on top of all sorts of like fiddling around with business rates.
- [17:36]
Simon Jack
So what happened back in April is that there was a re rating of how business rates were calculated and that led to some very steep rate increase. Business rate increases over the next three years. Some pubs were looking at, on average, they were looking at 76% increase for pubs. I think it was 110% for hotels. And so they realized, and, and given that pubs were closing at quite a clip anyway with increased labour costs, for example, increased national insurance, they employ a lot of younger people who've seen some quite substantial pay rises. The government intervened at that point to say, we will give you a 15% discount on that rise and this is a 20% discount on top of that. But pubs are saying every little helps, but we've got a lot of other cost pressures. Some are saying this isn't going to touch the sides. The rest of the industry is saying, what about us?
- [18:26]
Adam Fleming
And Helen, I see the ifs you just sent out your briefing about your take on this scathing is maybe putting it a bit too strongly, but you kind of are marking the government's homework in a slightly skeptical way today.
- [18:38]
Helen Miller
Well, I think stepping back from today's individual measure, what really stands out is just the constant tinkering with business rates. It used to be a tax that was very stable. You had one tax rate, it didn't change for decades. And then in recent years we've had just constant change. Now there's lots of different rates. And it's not just the 20% that we've seen today, as we just heard, it's the 15% that's on top of. But the 15% is temporary, the 20% is permanent. There's also a different 5 percentage point cut for a different subset of businesses. And there are two different small business reliefs and there are other temporary reliefs. Like if everyone's eyes glazing over. It's madness to be trying to design a system with this many complexities in it. So whatever you're trying to do with business rates, and even if you do want to make the case that pubs are special in some way and you want to subsidize them to get more of them, this constant tinkering complexity is just not the way to go about it.
- [19:27]
Adam Fleming
But is the complexity actually that bad? Because aren't all these tweaks being done to help individual businesses? And it's sort of the help that matters, isn't it?
- [19:35]
Helen Miller
In a way. And the businesses who are getting help today, I'm sure, will be pleased. But part of the problem is they're not going to really know what to expect from the business rates in future. If you're planning to run a pub for the next five, ten years, rather than just the next six months, you want to know what your taxes are. This is going to be. And I don't think you have a very good idea of what it's going to be, because there's always another relief coming around the corner that may be temporary, that may be extended, that may be permanent, it may be for just clubs and music venues. Maybe it will be for clubs, maybe it'll be for something else. It just makes it really hard to know what you are planning. I think that that uncertainty is a real problem.
- [20:05]
Adam Fleming
And Simon, Andy Burnham's made a big play of everything he does being funded, in his words. How is this being funded?
- [20:12]
Simon Jack
So it's going to cost £100 million, we think, an average for each pub of £1100 per year, paid for with a very vague description, I would say, of looking at taking away some of the reliefs enjoyed by other businesses, which are, I don't know, antisocial was the word. They used vape shop as an example. What else might that include? We just don't know. So they would pay also.
- [20:35]
Adam Fleming
At the moment, a vape shop gets a tax break on business rates, which is available to lots of other businesses as well. But in future, they wouldn't get it.
- [20:42]
Simon Jack
They would take away some release. Now, Helen would know better. Exactly the design of those releases.
- [20:47]
Helen Miller
The problem, actually, that might be a long answer. There isn't a special relief at the moment that's called the antisocial business relief. Right. Just that it used to be the case that businesses just got business rates applied to them. So now if you want to take something away from them, you've got to tell which firms is which business is it, Is it vape shops and which other businesses? And what are you going to take away from it? It's really not clear at all. So they could find some money by basically taking money from some businesses and giving it to others. They've worked out which ones they want to help, but not which ones they want to take money away from.
- [21:15]
Simon Jack
They've got a bit of time to figure this out because presumably all of this, this doesn't come until next is another point we should make. And presumably so they'll have a little bit of a think about this during the budget process. And so it is some way off.
- [21:27]
Adam Fleming
Helen, it seems to me, and I've sort of been working on this theory for a little while now, that pubs are almost becoming a bit like charities, which of course being news to people who spend nine pounds a pint in London and also the big companies that own them. But we're sort of treating them as like social enterprises that are good for the country.
- [21:45]
Helen Miller
Yeah, I think something to that, actually. I think it might sound obvious at first to say, well, let's help pubs. Pubs are good. But actually, if pubs are so good, why aren't they financially viable all on their own? Why aren't people going to them? You know, there's obviously a reason that we have vape shops. People like going to them. If pubs aren't.
- [21:59]
Adam Fleming
Some people say there's other reasons maybe.
- [22:02]
Helen Miller
But the point, the broader point, is that if people like pubs, they'll go to them. If the government thinks there aren't enough pubs or pubs need some help, there needs to be some reason why the market left its own, isn't coming up with enough pubs. Now, I think you can make a case that something like there's an externality. There's like you want people to be together and socializing and just explain what an externality is. Yeah, sorry, get into juggling. So it just means something that I do something, I produce an effect. I don't take it into account. So if, if the pub has one person, it's not very good. If we all go to the pub, it makes it a nicer, nicer environment. So you want to encourage people to go to make it a nice, vibrant environment. So the government may be subsidising is pubs, but then to the earlier point about who's in and who's out, is it just pubs? What about restaurants or other venues? What's special about a pub per se? And again, even if you do want to make pubs some kind of charitable, you know, you want to subsidize them and encourage more of them, I think it's a question about how you go about doing it.
- [22:54]
Simon Jack
I think one of the parts of the thinking is that, you know, there's a social heart to a high street, which might be the local pub. People go there in the evening. It creates a, you know, it creates ancillary business for other people around it, cabs, whatever. And not only that, but also they employ quite a lot of people. Usually, and quite a lot of younger people. So I think they see, you know, getting a job behind a bar is a lot of people's first experience of
- [23:18]
Dominic Casciani
the world of work.
- [23:20]
Simon Jack
You learn some quite good lessons on that, how to open up, how to use a till, how to speak to people, how to be on time, all that kind of stuff. And so I think they feel that, that that was one of the areas where the youth unemployment crisis was cutting particularly hard and you had some very substantial rises in the national living wage, particularly for 18 to 20 year olds. So I think about 25% up over the last year or so. And that was contributing to, you know, some big pressures, cost pressures on the pubs, along with eating bills and what have you. So I think that, you know, those are some of the areas, plus this kind of nebulous social capital idea that pubs have.
- [23:56]
Adam Fleming
And Helen, if we look at all the announcements we've had this week, how's the ifs feeling about them on the whole?
- [24:02]
Helen Miller
Well, I think that the thing to do is step back and say, actually on the whole, they're all pretty small. I mean, the first two were temporary measures. I think the VAT cut, it's going to be really hard to reverse it. Who wants to be the Prime Minister that puts 5P back on energy bills? Not going to happen. So if it were a temporary measure, it's actually quite small. Governments always change priorities within years. This one's doing it in a particularly dramatic 6am drop kind of way. But I don't think that's particularly exciting. The bigger issue really is getting to the budget and those bigger public finance pressures. If the government is going to make that VAT cut permanent, that's close to £2 billion. It's got to find every year on top of a laundry list of other pressures in the public finances. So look, so far they're relatively.
- [24:43]
Dominic Casciani
Oh, yeah.
- [24:44]
Adam Fleming
Because the VAT cut is being scored as being temporary and not in place yet. And so the total of 800 something million for that is not really true. It's more like 10 million.
- [24:55]
Simon Jack
That's for six months.
- [24:55]
Helen Miller
It's just six months. Yes. If it's just six months, our governments can always find £850 million somewhere, right, and pay that. But it's probably not for six months. It's going to be every year going forward. So that's a permanent pressure. And again, there are just lists and lists and lists of permanent pressures, including lots of little ones that all add up and some really chunky ones, like maybe I'll come Onto like defence. So it will really be the budget when the government has to reckon with how across the rest of the Parliament are they going to allocate what's already a really tight budget and how are they going to raise more taxes?
- [25:26]
Simon Jack
Just one thing I think is worth noticing.
- [25:28]
Adam Fleming
I love that you've got your hand up there, Silas.
- [25:30]
Simon Jack
Help, please, sir, please, Mr. Fleming. But it's these, these little crumbs of comfort, you know, dropping in, you know, a little bit of a drum beat of these, you know, coming in the first few days to talk about this breathing space on individuals. This is a bit of breathing space for some small businesses like pubs. And it just seems to me politically it's quite at odds with the kind of trying to spread these good vibes. Whereas the Chancellor and Keir Starmer, they were criticized by a lot of businesses, they were quite downbeat, quite unhelpfully downbeat about, oh, it's all going to be difficult, it's going to much worse before it gets better. And I think this is a very different approach. And it may be small, the little crumbs that he's leaving on our doorstep each morning, but I think they're trying to sort of, you know, contrast this with what they saw from Starmer and Reeves.
- [26:16]
Adam Fleming
And I suppose the idea is that you provide crumbs now so that we get the full loaf, which is the ten year plan, which is coming in the autumn for the future of the year.
- [26:23]
Helen Miller
They're worth remembering too, that, I mean, Rachel Reeves had her little crumbs of her great British summer of savings.
- [26:29]
Adam Fleming
Let's not talk about soft play again.
- [26:31]
Helen Miller
So. But other governments have done this too. In some ways. This government hasn't yet had to make the big decisions. It hasn't had to yet decide which government departments to cut or which taxes to raise. So in some sense they're doing the easy bit now, they're doing the feel good bit. I think it will be interesting when they have to make the difficult decision. They're going to have to either cut back some departments or raise taxes if they want to find any new money for any of their new priorities. That's going to be the moment where they're going to have to do that and keep the good vibes rolling because
- [26:59]
Simon Jack
things like defense spending, they were thinking of tinkering with the personal threshold, the point at which you start paying income tax. Those are mega expensive, you know, when you start messing around with that sort of stuff. And by the way, I should say the industry. What? The industry, the Hospitality industry whole really wanted was a cut from 20% of VAT to somewhere around the European average, which is somewhere about 9%. Now that would cost several billion pounds, up to 10 if it was applied right across the industry. And by the way, this is, this idea of cutting VAT is something Andy Burnham himself discussed, you know, in the run up to his premiership. So he's, you know, clearly not going that far, at least not yet. But there's another wish on the wish list of the industry.
- [27:43]
Adam Fleming
And John Healey, the new Chancellor, has been seen in the wild.
- [27:46]
Simon Jack
Has he?
- [27:47]
Adam Fleming
I think. Didn't he do a speech at some business thing? Oh, not to you then?
- [27:51]
Simon Jack
Well, I was, I thought I was the farmer Air show with Wes treating yesterday.
- [27:54]
Adam Fleming
Oh, how was that?
- [27:55]
Simon Jack
That was kind of interesting, actually. Well, there was a lot of. I spoke to the boss of BAE Systems on our biggest contractors. He gave us a rare interview and you know, you're not going to get the biggest defense contractor, so sort of bad mouthy mod, are you? But I think there's, there's the biggest customer. There is some frustration that we've only got, you know, there was an initial ambition to get to 3% of GDP by 2030 on defense and 3 1/2% by 2035. The settlement that actually saw John Healey resign as Defence Secretary got us to 2.68%. They were still talking west reaching was still talking three and a half percent by 2035. It's an awfully long way to get there from where we are now and it's going to cost billions and.
- [28:35]
Adam Fleming
Yeah. Helen, do you think the appointment of John Healey as Chancellor after he resigned as Defense Secretary over that means that the defense budget kind of ballooning is inevitable? He can't really be the Chancellor that sticks with the previous defence spending plans that he resigned over, can he?
- [28:50]
Helen Miller
Oh, it's going to look pretty odd having argued really hard to go to 3% to then be in charge of that decision and say, actually I've changed my mind. I mean, I think we should remember as a country it's not inevitable. It is a choice that we can make about how much to spend on defence and you can argue for three or another number, but there's no law of the nature says we have to be three. But yeah, John Healey was quite clear that he wanted to get to three. But as we were just saying, that is a big increase. To get from where we are now to 3%, you need to find something like 10, 11 billion if you want to get all the way to three and a half percent, you have to find another 20 billion. To give you a sense of scale, the previous government had pencilled in a small increase in the size of the state between now and the end of the Parliament. If you put defence to 3% of national income, that takes up the entire increase. That means that everything else would have to get flat, no increases. The minute you give the NHS any kind of increase, because the NHS is so big, you have big cuts to other departments. So that is what we're playing with here. If John Healey wants to carry through with that 3%, he's either gonna have to put forward some really big substantial cuts to departments like really stopping the government doing some things, or come back with some big tax rises.
- [29:59]
Simon Jack
I mean, the letter of his resignation, what he stood up in the Commons and said, has given quite a rod to his own back. He said it falls well short of what is needed to defend our country. Those are qu. Big words to. To. To. To. To be able to.
- [30:11]
Dominic Casciani
To.
- [30:12]
Simon Jack
To back out of now, Chancellor.
- [30:14]
Adam Fleming
Other words that the Prime Minister has used when he was chatting to the political editors in the. The back garden of number 10 Downing street on Monday, just, just a short while after he walked into the front door, he said to Chris Mason and others, we will look at the flexibilities that exist in the fiscal rules. What flexibilities are there there?
- [30:33]
Helen Miller
I think the short answer is not very many. So, I mean, we have two fiscal rules. One is to balance the current budget. That's to be making sure we spend all our tax covers, our day to
- [30:41]
Adam Fleming
day spending, and you basically borrow to
- [30:43]
Helen Miller
invest and you borrow to invest. So I think there's not very much wiggle room in that at all. I mean, the government is already borrowing a lot and it has plans to get that borrowing down quite quickly. Now it could do what governments have come accustomed to doing and always promise to do it in three years time but never get there. So maybe you describe that as a flexibility. I mean that's not in the spirit of the rule, I don't think, but maybe they could do that. Basically keep promising to do it in three years time but never getting there,
- [31:06]
Adam Fleming
even if that involves some very big spending cuts the year before an election, which would be quite tricky to do.
- [31:11]
Helen Miller
Yes, that's going to cost us some credibility in the markets. On the investment side, basically, the rule that binds is that the rule says let's have debt falling. At the moment, debt is just about stabilising. If you look, if you really squint at a picture, you can see it just touching down. There's a little bit of room against that. You could borrow a bit more and still have that be true. But if they want to do really substantive extra borrowing, like have a growing health care, growing social care, growing defence, more money for council houses and whatever else, I don't really see that there's flexibility within those rules, really. You can do a bit more borrowing. You could break the rules. You could borrow more. The government, you know, could do more borrowing. The question we're not.
- [31:50]
Adam Fleming
Yeah, they're not. They're laws made by people, not laws of physics.
- [31:54]
Helen Miller
Exactly. I think they're constraints that government signed up to because they thought they were using. I think it is useful to say that actually, in relatively good times. We're not in a pandemic, for example, actually, let's stop having the debt ballooning up. Let's get it under control partly, so we have a bit of space to borrow more if something else bad comes along. So, yeah, I don't. I think there's. I worry a bit about this always flexibility. I don't think there is a lot of flexibility, actually. And even. Even if we could borrow more, the question of, should we borrow more? We have debt that is really high. The government already is in a situation where one out of every 12 pounds it spends is on debt interest. We could borrow more and have a higher debt interest bill. Is that. Is that a good idea? Do we want to do that? Even if you want more defence, we could fund it through taxes. So I think there's a debate to be had, not really about what can we get away with within the rules. That's a red herring. It's about what should we as a country be doing, how should we be funding defence and how big should it be?
- [32:43]
Simon Jack
And it's not helped by the fact that we have the highest borrowing costs of any. Any government in the G7, simply because our debt to GDP is not as high as some, for example, France or Italy, but it's actually going up a bit faster than others. And, you know, they also have. In Europe, they've got the sort of. The. The comfort blanket, if you like, of the European Central bank, which is in the past said it'll do whatever it takes to sort of protect those countries. So that. That helps there.
- [33:06]
Adam Fleming
Simon. On a different note, while I was having my lunch and looking at the news websites, I see that there was some Houthi attacks on some Saudi oil tankers, which has had an effect on the oil Price?
- [33:16]
Simon Jack
Yep. We're up to $98 a barrel in up Brent crude. Now, if you remember, at the height of the conflict, it was 120. So we're not quite at that. But when it looked like there was this memorandum of understanding and it was going to be peace, what have you, it went down to just above $70. So we've come up quite a long way. We're nudging at that sort of psychologically jarring number of hundred dollars a barrel. Not only that, but natural gas prices are beginning to creep. Well, not creeping up. They've gone up a great deal. And one thing to keep your eye on for this winter, the amount of storage, gas storage across Europe, they tend to fill it up during the summer, so they've got plenty for the winter. It is well down on where it should be or where it was this time last year. This time last year was 65 storage full. This year it's just above 50%. So a lot of people watching that saying, if we get a particularly cold winter, look out.
- [34:10]
Adam Fleming
Now, Helen, we went into the archives from one of your previous appearances in the newscast studio where you were talking about the potential impact fact of the Strait of Hormuz opening or closing.
- [34:19]
Helen Miller
Okay.
- [34:20]
Adam Fleming
And we're going to play it back to see if you were right.
- [34:22]
Helen Miller
Oh, good. What did I say? There is uncertainty, like I can foresee a set of, you know, a set of things where actually the war ends quickly and we're not too bad. I still think we're not going back to where we were in January. I think the world, you know, I think actually, I think there will be some damage that persists longer than this year. I also imagine if we're still here at Christmas with a war, then I'm going to be, you know, closer to that panic button. I think what hasn't really probably sunk in is that we are poorer. You know, the question is only how much poorer. So there's no, there's no world in which here we're not poor. I mean, we citizens, we, you know, we, we people, you know, we are having to pay more for what we import. That is bad for us now. It may go away, but we're not going to catch up, I don't think, and like, regain what we lost in this period.
- [35:04]
Adam Fleming
Lots of things we could test you on there. Yeah.
- [35:06]
Helen Miller
What I said basically was it's uncertain. That's an easy answer, isn't it?
- [35:09]
Adam Fleming
But it's true, which has turned out to be true.
- [35:10]
Helen Miller
It's one of the things the government, actually, it's interesting. So back to. We talk about this. Government wants you lots of the cost of living. The government can do things to help people with the cost of living, but actually the big thing that's going to help is not fiddling with people's electricity bills by £25. It's going to be those big economic factors. It's going to be what happens to inflation that's partly outside of our control. It's going to depend on what Donald Trump and others do in the Middle East. And it's partly the longer run things about economic growth. What would make all of this easier is economic growth. Growth, that's what would really help people. And again, that's not entirely within our control. It will also depend on the Middle east and other things. But the government can do things, but it needs longer term policies to get the economy moving, not fiddling around with prices.
- [35:51]
Simon Jack
I think what's interesting also about this recent rise in oil prices is it's going to be quite an interesting test because up to now there have been some. For example, China has very effectively controlled its demand. It's dialed, it's got massive reserves, which it's drawn those down. The International Energy Agency has also released strategic reserves in lots of different countries. There was a synchronized release of reserves of a couple few hundred million barrels. You know, can you do that again, is the question, do you have those? Are those weapons still available? And, you know, they are definitely less available than they were before. So we've got a new test.
- [36:31]
Adam Fleming
Great. Simon, thank you very much.
- [36:32]
Simon Jack
Thank you, Adam.
- [36:33]
Adam Fleming
Helen, thanks for coming in.
- [36:34]
Helen Miller
Thank you.
- [36:43]
Adam Fleming
Now, we've been trying to do a bit of forward planning here on newscast, which is very untypical of us. And we were just thinking, okay, Andy Burnham's hundred days is probably going to be a big deal because that's becoming quite a tradition in British politics. So how can we mark that? So we're launching another newscast gimmick. It's called your hundred days and it goes like this. What is something you would like to achieve in the next hundred days? It could be something big, it could be something small, it could be something physical, it could be something domestic, it could be something intellectual, it could be something joyful. Get your thinking caps on for what you could achieve in your hundred days. And just so you know, this is according to my spreadsheet, you will have until, as I scroll down to the bottom of it, until the 27th of October. I reckon that is Andy Burnham's hundredth day in office. And to get you started. I have decided my Hundred Days Challenge is to run 500 kilometers in a hundred days. Not all in one go, obviously, like a ginormous ultra ultra ultra Marathon. But 500 kilometers spread over 100 days. I thought 500 miles was too ambitious. And also the Proclaimers have got that owned. So already I've got my spreadsheet and I've run 15.46km already in the Burnham era, which means in the next 96 days I've got to run 484.54 km. Wish me luck. But at the same time, send in what you're hoping to do in the next hundred days and we will pepper them throughout the next 96 episodes of Newscast. Newscastbc.co.uk or you can WhatsApp us on 033-01-2390, and you can send us voice notes and pictures and videos. And you know how much I love hearing what you are doing alongside listening to newscast. So it's going to be great. And there'll be another newscast coming your way very soon. Bye bye. Newscast.
- [38:51]
Helen Miller
Newscast from the BBC. Well, thank you for making it to the end of another newscast.
- [38:56]
Dominic Casciani
You clearly ooze stamina.
- [38:58]
Helen Miller
Can I gently encourage you to subscribe
- [39:00]
Dominic Casciani
to us on BBC Sounds?
- [39:02]
Helen Miller
And then, without having to do anything else, our meandering chat will miraculously make its way to your phone.