Politics latest: Tory leadership hopeful 'has already blown up' campaign (2024)

The story of the Starmer government will be shaped by the tension between the change it promised in opposition and the lack of cash available to achieve it.

We can now see the first couple of chapters in this tale – public sector pay and benefits.

The indications this weekend are that the chancellor will acquiesce to a reported above-inflation pay rise for many public sector workers.

To not do so would risk a fresh wave of strikes - a bad look for the first few months of a Labour administration.

But that means an immediate multi-billion-pound bill for Rachel Reeves to foot.

Her "iron-clad" fiscal rules mean that can't come from borrowing and the mooted revenues from future economic growth won't arrive in time for this pay round.

This leaves her with two levers to pull – one marked spending cuts and one marked tax rises.

We may get an indication of the approach in the coming 10 days when the chancellor comes to the Commons to lay out the broader state of public finances and how pay deals fit into that.

On benefits - and specifically the two-child cap - the government has reason to feel it's on a steadier footing.

Sir Keir Starmer is insulated from much political damage by his huge majority and may feel less inclined to change course given polling suggesting the policy is more popular with the public than it is with parliamentarians.

But these tussles are just a taste of what's to come.

This autumn will bring a spending review that will fully expose the grisly gulf between what departments need and what is available.

The flashpoints this will throw up are daunting: defence, health, social care, councils, pensions - the list goes on.

Throughout the election campaign, both parties were accused of simply not being straight about how little money was washing around Whitehall to fund public services.

Economists called it a conspiracy of silence.

Now in power, keeping schtum is simply not an option for Labour.

Following Vaughan Gething's announcement that he is standing down as the first minister of Wales, the race to replace him is heating up.

One person who was considered last time the competition was run is former minister Jeremy Miles - and it was thought he would stand again.

However, he announced today he is not going to contest the leadership - and instead will back Eluned Morgan for leader of Welsh Labour.

The current health minister for Wales told the BBC this morning she is giving "serious consideration" to running.

Her indication was that she would stand on a "unity ticket" withHuw Irranca-Davies, the cabinet secretary for climate change in the Senedd.

Candidates have until Wednesday to declare their interest in running.

Mr Gething only recently took over the job as party leader - but stood aside after four members of his cabinet resigned over his leadership.

You can read more about what happened here:

One of the people who has long been angling for the leadership of the Conservative Party is Suella Braverman.

Rishi Sunak had her as his home secretary, but eventually sacked her following repeated challenges to his authority.

And her ambition was further evident when she criticised the leadership of the party during the election campaign.

Since then, she has criticised "centrist cranks" and insisted her party needs to move closer to Nigel Farage's Reform politically - with reports she may even defect.

Trevor Phillips asked Lord Ben Houchen, the mayor of Teesside, if he was a so-called "centrist crank".

Lord Houchen earlier told Sky News he hoped this would not happen, and that he had written an open letter to those wanting to lead the Tories.

He said one of the points he made was that anyone wanting to take over needs to rule out "a partnership or a coalition or whatever relationship with Reform".

"They are a symptom of the problem - they are not the cause of the problem in the Conservative Party," he added.

"And I think that way madness lies."

Iain Dale, a former Conservative Party candidate and staffer, was heavily critical of Ms Braverman.

He told Trevor: "I wonder when she mentioned the word cranks, whether she was actually looking in the mirror at the time."

He added: "I don't think she'll even stand because she's blown up her campaign before it's even started.

"That article that she wrote in the Telegraph two days before the election, not two days after that, went down like a cup of cold sick with Conservative Party members."

He said the odds were "evens" on if she would defect to Reform by Christmas.

Speaking to Sky News earlier, exchequer secretary to the Treasury James Murray said the UK's economy was in the worst condition since the Second World War - and blamed the Conservatives for mismanaging it.

Jeremy Hunt, the shadow chancellor, has defended his party's record and claimed the Labour position is an attempt to lay the ground for tax raises.

Mr Hunt implemented a series of income tax cuts ahead of the election, with the implications for public spending unclear.

Speaking to the BBC, he said: "What is absolute nonsense is this business of the worst economic inheritance since the Second World War.

"You only need to look at the last time a government changed hands between parties in 2010. Compared to then, inflation is nearly half what it was. Then we had markets collapsing, now we have the fastest growth in the G7, we have unemployment at nearly half what it was then.

"It's a very transformed picture, and I think the reason that she [the chancellor] is doing this is that she wants to lay the ground for tax rises.

"[It's] perfectly legitimate for a new government to come in and say they want to spend more, tax more – every Labour government in history has done that – but [the chancellor] should have been honest about that before the election."

The UK's debt repayments soared in recent years due to expensive government borrowing during the pandemic, with high interest rates eating into public budgets.

It means the UK is sitting with the highest debt to GDP since the late 1950s when it was recovering from the war.

Mr Hunt argued that not raising public sector pay could avoid tax rises.

NHS waiting lists stayed high under the Conservative government as clinicians took industrial action following pay offers they found unacceptable.

There was similar disruption in other sectors like rail and teaching for the same reason.

Mr Murray told Sky News these implications needed to be considered when offering public sector pay deals.

Sunday Morning With Trevor Phillips has finished up after another show.

It'll be back next week at 8.30am for another episode of interviews, debate and discussion.

Baroness Kishwer Falkner, theEquality and Human Rights Commission chair, is speaking to Trevor Phillips and is asked about the febrile nature of the political debate.

Many politicians reported feeling unsafe during the general election, and she tells Trevor "the level of intimidation is higher than I've ever noticed in any election to date".

Baroness Falkner says the public needs to understand that candidates are "standing up to serve the public" and need to have the space to express themselves.

She says there are growing numbers of people who "seem to think that they need to play the person rather than the ball".

This refers to attacking someone personally rather than their arguments.

One of the most difficult areas has been gender and sex.

Trevor asks about new guidance from the EHRC which states that - if there is a "genuine operational requirement" based on sex, like in a women's refuge - sex means biological sex.

Baroness Falkner says she has not heard from the government on it, and reiterates the EHRC "are the experts" and are there to interpret the Equalities Act.

She says that despite criticism from activist groups and politicians, the EHRC has never been challenged in court.

The chair says in certain cases employers can say they want someone who is a "woman, a female at birth" - and can even exclude people who have transitioned and acquired a gender recognition certificate.

Kristin Wolfe, the chair of Democrats Abroad UK, has told Sky News that Joe Biden can still win the presidential race in the US.

Speaking to Trevor Phillips, she says there is a 100% chance Mr Biden will be the candidate for the Democrats as he has not said he will drop out.

She says Mr Biden still has a mandate from the grassroots of the party to stand as their candidate, although he will be talking to donors, advisers and others.

Ms Wolfe says if Mr Biden stays in the race, he "will lead us to victory in November".

She says the party would rally around him and be unified, while the Republicans are in "disarray" despite having a unified "MAGA base".

Ms Wolfe also praises Mr Biden for being able to campaign and run the country at the same time.

Asked who could replace him, and if it has to be Vice President Kamala Harris, Ms Wolfe says the VP has been "groomed" to take over if needs be.

Lord Ben Houchen, the Conservative mayor of Teesside, is next up on the programme after meeting Sir Keir Starmer in Downing Street alongside the other metro mayors.

He praises Sir Keir for doing this early in his tenure as it is something other leaders have not done.

The mayor says that, from his experience, he sees the prime minister has got a "large mandate".

"He's got such a big majority that I don't think he's going to be frightened, certainly in the early days, of taking on some of the factions and some of the people within his own party to be able to deliver on the promises he made during the election," Lord Houchen said.

The mayor is also asked about why his party lost so much support at the general election.

Lord Houchen says the country supported the Tories for a decade but then backed away following the "infighting, U-turns and a party that lost its sense of direction as a government" between 2019 and 2024.

He says it would not have mattered what campaign was run - people would have voted against the Conservatives regardless.

Moving on to the party's next leader, Lord Houchen says he doesn't know who he will support.

But he says the party roughly knows who will stand - including potentially a couple of "wildcards" that aren't well known.

The mayor says he wants to see someone who cares about public service, and also someone who can be fresh, new and set out some clear ideas.

He is asked by Trevor if he is a "radical centrist" - a label Tory leader hopeful Suella Braverman has used.

Lord Houchen says he hopes not - and that he will ask her the next time he sees her.

Our panel discusses whether tax rises are likely to be coming down the road.

Broadcaster Iain Dale and ex-BBC chief Greg Dyke both agree there will need to be a raise in rates.

Mr Dale says Chancellor Rachel Reeves will do so in the budget by saying the economic situation is worse than Labour thought.

Mr Dyke says he has always thought tax rises are coming.

The panel also discusses the two-child benefit cap, with Anne McElvoy from Politico saying it is unsurprising that a majority of voters do not mind the cap.

She says the public by and large think that if people have more children, they should go to work to pay for them.

There are, however, many in Labour that hate the cap - especially among the intake of new MPs.

Mr Dyke says he reckons Labour will scrap the cap when they can afford it.

On public sector pay, Mr Dyke and Ms McElvoy says the government will likely need to meet the recommendations - while Mr Dale says the ongoing negotiations with junior doctors will be a bellwether for how relations with unions will go.

Another major headache for the current government is the cap that means people on benefits can only claim for their first two children.

Sir Keir Starmer's administration has said it cannot afford to scrap the cap.

It is put exchequer secretary to the Treasury James Murray the government has chosen to prioritise pensioners over children.

This is based on the fact that the government has kept the triple-lock on pensions - estimated to be valued at £13bn - but has not lifted the two-child cap - estimated to cost £3bn.

Mr Murray argues the work to end child poverty has started with the establishment of a task force.

It is pointed out by Trevor Phillips that no one from the Treasury is part of this task force.

Mr Murray says Labour cannot make promises on spending - like the £3bn for the two-child cap - they cannot find the funding for.

But he adds that "all Labour MPs feel that far too many children's life chances are scarred by poverty".

Sir Keir says he wants to end the cap when it can be afforded.