‘Frankly insanity’ – Tories claim plan revelations show why Labour should block Chinese ‘super-embassy’ plan
Responding to Pennycook, Alicia Kearns, a shadow Home Office minister, said she was disappointed by the fact that she just got a “technocratic history lesson” from the minister.
She went on:
208 secret rooms and a hidden chamber just one metre from cable serving City of London and the British people. That is what the unredacted plans tell us that the Chinese Communist Party has planned for its new embassy if the government gives them the go ahead. Indeed, we now know they plan to demolish the wall between the cables and their embassy cables, in which our economy is dependent.
Kearns said this would mean the Chinese could have access to “cables carrying millions of British people’s emails and financial data”, and she said this meant they would have “a launchpad for economic warfare against our nation”.
She asked if ministers were aware of these plans, if they have concerns about them, and if they have asked the Chinese for an explanation.
She asked Pennycook to confirm that the government plans to approve the application. She went on:
Labour promised a new relationship with China. Yet UK export goods are down 23%. Surrendering all security for Chinese trade was always a bad policy. But surrendering all security while exports plummet is frankly insanity.
She said the government should refuse the application.
Alicia Kearns Photograph: BBC ParliamentShare
Key events
4d ago
Early evening summary
4d ago
Scottish government will probably need to find more money for NHS to maintain standards under budget plans, IFS says
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Income tax bands and rates in Scotland, and how they compare with rest of UK
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Nandy tells peers government made ‘mistake’ with its original AI copyright plan, confirming ‘reset’ under way
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Labour’s tax and spend policies have been ‘nothing like’ what party proposed in its manifesto, former OBR chief tells peers
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Shona Robison announces higher council tax bands for homes worth more than £1m in Scottish government’s budget
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‘Frankly insanity’ – Tories claim plan revelations show why Labour should block Chinese ‘super-embassy’ plan
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Early evening summary
Some Labour MPs have joined the Conservatives in condemning plans to allow the Chinese to build a new “super-embassy” in London. In a Commons urgent question, triggered by a Telegraph report claiming that the building would include a “hidden chamber” very close to cables carrying data for City banks (see 12.54pm), Alicia Kearns, the shadow Home Office minister, said the Chinese could use the building as “a launchpad for economic warfare against our nation”. (See 1.06pm.) None of the Labour MPs speaking during the UQ backed the plan, and one of them, Sarah Champion, called for the application to be rejected, saying the government should “stand up to bullies, not reward them”. (See 1.19pm.)
For a full list of all the stories covered on the blog today, do scroll through the list of key event headlines near the top of the blog.
Yvette Cooper, the foreign secretary, making a statement to MPs today about Iran. Photograph: House of Commons/PAShare
And here are two more comments on the Scottish government’s budget.
From the Times columnist Kenny Farqhharson
Much to welcome in the Scottish budget but it’s remarkable how many of the measures were simply tweaks to copy what Labour is doing in England (mansion tax, breakfast clubs, etc) or position Scotland as marginally more generous than south of the border (income tax thresholds for lower paid). SNP world view is defined by England.
From Douglas Fraser, BBC Scotland’s business and economy editor
As a tax giveaway, it’s not huge – £50m handed to income taxpayers by raising two of the lower thresholds by more than inflation.
The point at which you start paying 21 pence in each extra pound earned, up from 20 pence, goes up by slightly more than £2000 from £27,492 to £29,527. That’s a reduction in an annual tax bill of just over £20.
But the stealth tax on higher rates goes on. As people’s income goes through the higher rate of income tax, remaining at £43,633, they’ll pay 42 pence on each extra pound earned.
And this BBC graphic shows how Scottish taxpayers compare with taxpayers in the rest of the UK in terms of the amount of tax they pay at different income levels.
Tax burden for Scottish taxpayers and rUK taxpayers compared Photograph: BBC/Scottish governmentShare
Scottish government will probably need to find more money for NHS to maintain standards under budget plans, IFS says
The Scottish government will find it hard to maintain standards in the health service over the next financial year without finding extra money for the NHS under the plans set out in its budget today, the Institute for Fiscal Studies thinktank says.
In a comment on the budget, David Phillips, head of devolved and local government finance at the IFS, said:
On tax, while the finance minister emphasised the giveaways – including the increases to the basic and intermediate income tax thresholds and new business rates reliefs –, the biggest policy announced was a tax rise: freezing the top three income tax thresholds until April 2029, which will drag more taxpayers into higher rates of tax. This mirrors UK government policy, although previous tax increases on higher earners mean they face substantially higher income tax in Scotland than in the rest of the UK. Planned new council tax bands for the most valuable properties also mirror UK government policy – and as in England risks wasting an opportunity for a much needed full scale revaluation of council tax.
On the spending side of the budget, it’s a game of two halves. Both parts of the game involve only very small increases in overall day-to-day spending on public services – just 0.6% above inflation in 2026–27, and 0.2% above inflation a year on average over the following two years.
In the coming year though, the Scottish government addresses this by proposing increases in health and social care spending of just 0.7%. This allows it to avoid cuts to other services, but without heroic improvements in productivity will almost certainly not be enough to maintain let alone improve services. Top-ups to health and social care funding seem likely, which may mean the next government having to raid other budgets part-way through the year.
From 2027–28 onwards, the Scottish government proposes much bigger increases in spending for health and social care averaging 2.4% a year, but that means cuts to spending on other services. On average, these amount to 1.7% a year. Local government and finance is set to see reductions averaging 2.1% a year in real-terms, which would require council tax increases of around 8% just to hold budgets constant.
The IFS also complained that the way the Scottish government set out its budget figures made it hard for people to understand what was really happening. There was confirmation of that a few moments ago when Evan Davis interviewed Ivan McKee, the Scottish government’s minister for public finance, on the PM programme. Davis kept asking whether, overall, Scottish taxation was going up or down as a result of these measures, but McKee was evasive and Davis never got a proper answer.
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Income tax bands and rates in Scotland, and how they compare with rest of UK
Scotland has six bands of income tax. Here are the bands, and rates, for 2026-27, as set out in today’s Scottish government budget.
Scotland’s income tax bands and rates for 2026-27 Photograph: Scottish government
In the rest of the UK there are just three rates.
The personal allowance is £12,570, which means people do not pay any tax on that amount.
Above that, in 2026-27, people on the basic rate will pay 20% up to £37,700.
After that, they pay the higher rate, 40%, up to £125,140.
And, after that, they pay the additional rate, 45%.
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Nandy tells peers government made ‘mistake’ with its original AI copyright plan, confirming ‘reset’ under way
Lisa Nandy, the culture secretary, has said that the government made a mistake when it set out a proposal for an opt-out copyright law for artificial intelligence (AI).
She was giving evidence to a Lords committee alongside Liz Kendall, the technology secretary, who said that the government was having a “genuine reset moment”.
The government infuriated almost the entire creative sector when, under plans to modernise copyright law so as to make it applicable to AI, it proposed that AI data systems should be able to use creative material unless artists specifically opted out of allowing this.
Artists, led by figures like Paul McCartney, argued that this was tantamount to theft, and that it could wreck the creative industries sector.
Giving evidence to the Lords communications and digitial committee, Nandy said:
One of the learning points for this government was that it was a mistake to start with a preferred model.
She said there were “challenges with the opt-out process that we hadn’t anticipated” and she said the government should not “rush in” to change.
And Kendall told the committee:
We are having a geniuine reset moment. We are genuinely trying to find a way forward.
She also said artists should have control over their work, and get rewarded for it.
In a thread on Bluesky, Thangam Debbonaire, who was shadow culture secretary before the election but who lost her seat to the Greens and who now sits in the Lords, said she was glad that a reset had happened at last. She also suggested that if she had become culture secretary, the “mistake” would have been avoided.
Point of information from me: in late 2023 I went to the then Shadow Sec of State Pete Kyle outlining the concerns and the need for a base line of transparency and for recognition and reward for creators. That was the policy of my Shadow DCMS team. #justsaying] #AIandcopyright
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The Department of Health and Social Care has published the text of Wes Streeting’s speech to the IfG conference this morning. (See 9.45am.)
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Labour’s tax and spend policies have been ‘nothing like’ what party proposed in its manifesto, former OBR chief tells peers
Heather Stewart
Heather Stewart is the Guardian’s economics editor.
Former Office for Budget Responsibility (OBR) chair Richard Hughes has been giving evidence to the House of Lords economic affairs committee.
He kicked off by apologising – again – for the inadvertent early release of the OBR’s key budget document, the economic and fiscal outlook, last month, which prompted his resignation.
Hughes also explained why he wrote the controversial public letter setting out the evolution of the watchdog’s forecasts, which sparked a row over whether Rachel Reeves had misrepresented the state of the economy.
In short, he was clearly fed up with the flurry of briefing in the run-up to the budget, as the Treasury rolled the pitch for an income tax rise and then reversed course. He said:
This was the first time in my 25 years working in fiscal policymaking in the UK and other places that the volume of speculation about the content of the OBR’s forecast was that great and that persistent.
I’d become concerned that that could create a damaging impression about the professionalism and integrity of the OBR in the way in which it conducts the preparation of its forecasts.
In particular, he was clearly cross about claims that a last minute change to the OBR’s projections had prompted the change of heart about income tax.
It was not the case that variation in the OBR’s judgments was driving policy. I thought it was very important to correct that misconception.
Hughes also underlined the gulf between election manifestos and government policy in the UK. He said:
The costed part of the Labour’s manifesto had them raising and spending around £8-9bn over the course of the government. If you look at their first budget they raised £40bn in tax and they spent £70bn, so it was nothing like what their actual fiscal plan turned out to be in government.
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Shona Robison announces higher council tax bands for homes worth more than £1m in Scottish government’s budget
Shona Robison, Scotland’s finance secretary, has unveiled the Scottish government’s budget for 2026-27. Here are the key points.
That is an increase in these thresholds of almost 11% in two years and, as a result, even more people in Scotland can expect to pay less tax than if they lived in England, Northern Ireland or Wales. That is over 55% of Scots set to pay less income tax because they live in Scotland and have a Government led by the SNP.
The first year of a baby’s life is one of the most exciting times for any family, but we know this time can bring extra stress and costs too, and that is why this Government is delivering the strongest package of support for families with young children anywhere in the UK.
A private jet tax will be introduced at some point in the futre. And an airport departure tax will also be put in place by April next year, with a consultation on a potential exemption for the Highlands and Islands. Robison said:
I say to those who choose to travel by private jet in Scotland, you will pay and pay a fair share for that privilege and, in doing so, will be making Scotland a fairer nation.
Business rates will be cut for the lowest three valuations, and transitional relief of £184m will be introduced over the next three years, to compensate firms affected by the recent revaluation.
BBC Scotland has more details on its own live blog.
Shona Robison, the Scottish government’s finance secretary, delivering her budget today. Photograph: Jeff J Mitchell/Getty ImagesShare
Updated at 17.08 CET
Cooper summons ambassador and announces further sanctions against Iran over protests crackdown
Yvette Cooper, the foreign secretary, has summoned the Iranian ambassador over the crackdown on protests in the country. In a statement to MPs, she also announced new sanctions on the regime.
She said:
The UK has already designated key players in Iran’s oil, energy, nuclear and financial systems.
Further measures will target finance, energy, transport, software and other significant industries which are advancing Iranian nuclear escalation, and we will work further with the EU and other partners to explore what additional measures might now be needed in response to developments.
Cooper did not give further details of the sanctions.
We have further coverage of what is happening in Iran on our Iran crisis live blog.
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Plaid Cymru leader Rhun ap Iorwerth says 2026 can be year his party starts to create ‘fairer, more ambitious Wales’
Keir Starmer is not the only party leader pledging to focus on the cost of living. (See 2.56pm.) At the Plaid Cymru press conference in Cardiff this morning, Rhun ap Iorwerth, the party leader, said the Senedd elections this year would allow his party to create “a fairer, more ambitious Wales”.
He went on:
Whether that’s through fixing the NHS, helping Welsh-owned businesses grow, supporting families struggling with the cost of living crisis, or demanding fairness and standing up for Wales – a Plaid Cymru government will always do what’s right by our communities.
While momentum is with Plaid Cymru and support for our positive vision for Wales is greater than ever, we’ll work tirelessly over the coming four months to build trust and earn every single vote.
Ap Iorwerth said parties like Labour and the Conservatives “only see Wales as a stepping stone to Westminster”, and he said Reform UK was just “playing on people’s fears and stoking anger”.
Labour has been in power in Cardiff ever since the first elections in 1999 to what was then the Welsh assembly. But the most recent polls suggest Plaid Cymru and Reform UK are on course to be the biggest parties after the elections in May, and ap Iorwerth seems best placed to be the next first minister, not least because Plaid would have more potential coaliton partners than Reform UK.
Rhun ap Iorwerth speaking during a press conference at Ty Hywel in Cardiff this morning. Photograph: Ben Birchall/PAShare
Hillsborough law bill held up as ministers try to allay concerns individual intelligence officers would be exempt
The remaining stages of the Hillsborough law have been pushed back until next week amid concerns about how the duty of candour to be brought in would not apply to security services including MI5 and MI6, PA Media reports. PA says:
The so-called Hillsboroughl law – the public office (accountability) bill – will force public officials and contractors to tell the truth in the aftermath of disasters.
It takes its name from the Hillsborough disaster, after which families campaigned for years to get to the truth behind what caused the death of 97 football fans as a result of a crush at the FA Cup semi-final in Sheffield in 1989.
It was due to come before MPs on Wednesday and was expected to clear the final stages in the Commons, but Downing Street confirmed it had been pushed back to next week.
The PM’s spokesperson told journalists at the lobby briefing:
The Hillsborough law will change the balance of power in Britain and put a legal duty on officials, including those in the intelligence services, to respond openly and honestly when things go wrong.
Since we introduced the bill, we’ve worked with the families to make this duty as strong as it can possibly be whilst never compromising on national security.
This government will not bring forward legislation that would put the national security of the UK or lives at risk.
On Friday, we brought forward a series of amendments to address concerns that the bill did not apply to individual employees of the intelligence agencies.
But we’re determined to get this right.
According to a BBC report, the Hillsborough Law Now campaign wants the bill to apply to individual intelligence officers and is not happy about clauses in the current legislation that might protect them. Ministers are seeking a compromise.
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Updated at 16.22 CET
Home Office TikTok account posting deportation footage accused of turning ‘brutality into clickbait’
A Home Office TikTok account posting footage of deportations and arrests set to dramatic music has been criticised for turning “brutality” into “clickbait”, Rajeev Syal reports.
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Starmer tells cabinet cost of living is key problem for public, and ‘agile and active state’ needed to deliver policies to help
Keir Starmer told his cabinet this morning that the cost of living was the number one problem facing the UK.
And he told ministers that Labour would use “an agile and active state” to deliver on the policies that would help voters.
In a readout of the meeting, a Labour spokesperson said:
The political cabinet agreed the cost of living is the number one problem faced by the public and reaffirmed that tackling it is the number one priority for this Labour government.
Ministers discussed how many families across the country are still struggling following a sustained period of low wage growth since the financial crisis. Real wages rose more in this government’s first 10 months than in 10 years under the previous government.
The political cabinet agreed the need to show how an active government committed to boosting growth through investment, a modern industrial strategy and economic stability could restore hope across the country by delivering national renewal.
Ministers discussed the need to ensure the benefits of growth are felt by the whole country.
The prime minister said we need an agile and active state to deliver on our values and to make sure that our promise of renewal became reality.
Summing up, he said that he was proud that this is the most working-class cabinet ever, but he said that we should never forget that most people “do not go on the same journey” and he said it was “their voices that should be heard around this cabinet table”.
He referenced his brother and his sister and said that the government should be fighting every day for the people who have suffered under years of low growth through a lack of opportunities.
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