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Khan claims Brexit may have shrunk GDP by as much as 10%

In his interview with La Repubblica (see 8.57am), Sadiq Khan, the mayor of London, said research commissioned by his office suggested that Brexit may have reduced UK GDP by as much as 10%. “What [the research] confirms is that our economy would have grown by an additional 10% but for Brexit,” Khan said. This is higher than other estimates of the damage done by Brexit.

Khan was referring to this report.

In her Mais lecture on Tuesday, Rachel Reeves, the chancellor, used a lower figures. She said:

double quotation markBrexit did deep damage. Recent independent studies indicate its GDP impacts could be as much as 8%.

Key events

Tories launch their local elections campaign

The Conservatives are launching their local elections campaign. There is a live feed here.

James Cleverly, the shadow housing secretary, is introducing Kemi Badenoch. He describes her as “the next prime minister of this country”.

He says she has had a “transformational effect” on the party, and injected “vim and vigour” into it.

Khan claims Brexit may have shrunk GDP by as much as 10%

Khan was referring to this report.

In her Mais lecture on Tuesday, Rachel Reeves, the chancellor, used a lower figures. She said:

double quotation markBrexit did deep damage. Recent independent studies indicate its GDP impacts could be as much as 8%.

Sharon Graham’s comment about Keir Starmer facing a leadership challenge after the May elections (see 9.50am) was prompted by a question about Angela Rayner, who seems to be intensifying her preparations for a possible leadership contest. Pippa Crerar has more insight in her thinking in this very good article.

Here’s an extract.

double quotation markUntil recently, Rayner – publicly at least – agreed. She rallied round when Anas Sarwar called for Starmer to go last month, posting that Starmer had her “full support” and urging the Labour party to come together. With her intervention, any prospect of a coup was over.

But despite the public display of loyalty, allies suggest that Rayner has, over time, been losing faith in Starmer and his Downing Street operation – and thinks the party must now take a different direction.

Her early frustrations with some of the people around Starmer – who she is understood to have felt pushed him into poor political decisions – began to settle on the prime minister himself. “Angela couldn’t defend him any more,” one friend said.

His decision to make Peter Mandelson the UK’s ambassador to Washington was a turning point. The Guardian understands that Rayner had privately warned Starmer against going ahead because of Mandelson’s links with Jeffrey Epstein.

Ministers announce huge expansion of electronic tagging in England and Wales

Tens of thousands of offenders will be released from prisons in England and Wales wearing tags that track their location in real time as part of the biggest expansion of electronic tagging in British history, ministers have announced. Alexandra Topping has the story.

Unite leader Sharon Graham says she expects Starmer to face leadership challenge after May elections

Keir Starmer will face a leadership challenge after the Scottish parliament, Welsh Senedd and English local elections in May, the Unite general secretary Sharon Graham has said.

This is not a novel view, but in an interview on Sky News this morning Graham said what many Labour MPs will only say in private.

Asked if she would like to see Angela Rayner replace Starmer, she replied:

double quotation markIrrespective of what I believe, I think after the May elections there will be a move to change leader because I think Labour are going to pretty much be decimated in those elections.

As Sky News reports, Graham said she thought the government did not understand “how bad” the anger was from “working people” about its lack of delivery.

UK pay growth sinks to five-year low as younger workers hit by hiring slowdown

Wage growth slowed sharply in the three months to January according to the latest snapshot of the jobs market from the Office for National Statistics. Phillip Inman has the story.

Peter Kyle, the business secretary, will make a statement to MPs about the government’s steel strategy (see 9.35am) at about 12.30pm. He will follow Yvette Cooper, the foreign secretary, who is making one on international development at about 11.3am.

UK to double steel tariffs to 50% to save plants from collapse

Chris Bryant, the trade minister, has rejected that suggstions that the UK plan of tariffs to help domestic steel production are reminiscent of Donald Trump’s policy.

As Bethan McKernan reports, the government is to double tariffs on Chinese and other foreign steel in a bid to save its remaining plants from collapse.

In an interview on Sky News this morning, asked if this was a Trump-style policy, Bryant replied:

double quotation markIt’s not very Donald Trump. It’s very, very specific.

Look, I believe I’m passionate about free trade, but it has to be fair trade.

And if you’ve got artificially low prices, completely pricing us out of the market, pricing British steel out of the market, that is a problem for us, because we need to have a sovereign capacity of steel in the UK.

Sadiq Khan says Labour should rejoin customs union and single market soon, and commit to full EU membership in manifesto

Good morning. Shortly before the general election in 2024, Keir Starmer said he did not think the UK would rejoin the EU in his lifetime. (He is now 63.) At the time he was loath to say anything that implied the Brexit vote was a mistake. More recently, Labour has been happy to talk about the economic damage done by the leave vote, and ministers want a closer relationship with the EU, but ruling out a customs union or single market membership remain firm red lines for Labour. And even more pro-EU parties, like the Liberal Democrats, are a bit vague about when full rejoining might be an option (not least because the last thing the Brussels probably wants is another half-decade of Brexit negotiations hell).

But today Sadiq Khan, the mayor of London, is trying to shift the debate into a different space. In an interview with the Italian newspaper La Repubblica, he has said not just that rejoining would be good in principle (which is about as far as most pro-European Labour MPs are willing to go), but that Labour should commit to rejoining in its next election manifesto.

He is also saying that Labour should join a customs union with the EU, and the single market, during this parliament – even though the 2024 manifesto ruled this out.

He says:

double quotation markI see on a daily basis the damage Brexit has done to not just London, but Londoners, the damage economically, socially and culturally. And I’m quite clear in terms of what needs to happen, which is I do think we should join the European Union …

So I think there should be a five-stage process in relation to this.

Number one, we should reset relations with the EU, and that’s done. Tick.

Number two, we should have closer alignment, and the chancellor this week has talked about closer alignment, sector by sector, and only diverge in exceptional circumstances.

So we basically have to take the next three steps that are incredibly important.

Step three, we should rejoin the customs union this parliament. Any trade agreement is less good than the customs union.

And then step four, we should rejoin the single market. We should try and do this during this parliament.

And then we should, as a Labour party, fight the next general election with a clear manifesto commitment, a vote for Labour means we would rejoin the European Union.

Khan also says, if Labour an election on a manifesto making this clear, there would be no need for a second referndum.

The chances of Starmer embracing this plan are close to zero. But that does not mean this is a totally hopeless intervention. Khan knows that Starmer won’t commit to rejoinining, but he is speaking out ahead of elections in London where Labour faces being hammered by the Greens in particular, in part because London voted remain and the Greens have been more anti-Brexit than Labour.

There is a wider point too; over time, policy debates shift and ideas once dismissed as absurd start to be seen as more realistic. (There was a time when a weird fringe party starting calling for the UK to leave the EU, and no one took them seriously.) Khan might be thinking long term.

Here is the agenda for the day.

10.30am: Kemi Badenoch launches the Conservative party’s local elections campaign for England at an event in London.

Morning: Wes Streeting, the health secretary, visits a vaccine rollout centre in Kent.

11.30am: Downing Street holds a lobby briefing.

After 11.30am: Yvette Cooper, the foreign secretary, makes a statement to MPs about international development spending. As Fiona Harvey and Jessica Elgot report, climate aid to developing countries from the UK will be cut by about 14% to roughly £2bn.

Noon: Nigel Farage, the Reform UK leader, unveils his party’s candidates and manifesto for Scotland.

Noon: John Swinney, Scotland’s first minister, takes questions from MSPs.

Noon: The Covid inquiry publishes its latest report, covering the impact of the pandemic on the NHS.

Noon: The Bank of England makes its latest interest rates announcement.

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