Good Tuesday morning. This is Andrew McDonald.
DRIVING THE DAY
BREAKING THIS MORNING: Keir Starmer has picked a path on a contentious issue that divides his Cabinet and provokes strong feelings in his parliamentary party — and this time it has nothing to do with Andy Burnham. In a TikTok (yes, really) posted a few minutes ago, Starmer confirmed his government will cap ground rents paid to freeholders at £250 a year for each property. The move will please his backbenchers and give him something to shout about on the cost of living at his pre-China trip Cabinet meeting at 9.30 a.m. … though it sets up Labour for a gunfight with professional landlords and investors.
Explaining all of this today … will be Housing Secretary Steve Reed in the morning broadcast studios shortly … then Housing Minister Matthew Pennycook, tipped for a Commons statement later … and the draft legislation on leasehold reform should wind up on the internet around the same time Pennycook speaks.
Red meat: Leasehold reform — promised in Labour’s manifesto — burst into the worried minds of Labour MPs after a draft bill was delayed last year. The issue of a cap on ground rents (whereby owners of leasehold homes pay their freeholders an annual fee) became an obstacle amid a rearguard by a Treasury reportedly concerned about the impact on pension funds that own freeholds. Freeholders were also fighting the idea of losing the money, and had already taken the government to court over reforms introduced by the Tories.
In there: We’re waiting for a planned timeline for when this will end up in law, along with other details of Labour’s planned reforms to leasehold. The legislation is expected to include a ban on new leasehold flats in England and Wales except for under some limited circumstances. The Times and the FT both caught wind of the announcement last night, after Sky’s Sam Coates heard it was coming Monday morning.
Not in there: Leasehold reform campaigners’ demand for ground rents to be reduced to “peppercorn” levels — i.e., negligible sums. Housing Minister Pennycook said in opposition that his preference was for ground rents to be capped at peppercorn levels.
But but but: As rumors swirled last night about an incoming ground rent cap, the Labour MPs who spoke to Playbook were broadly pleased, with one saying it was an “historic achievement” up there with the Employment Rights Act. Former Deputy Leader Angela Rayner and her allies will be pleased too, after she intervened in a Guardian op-ed last week to urge Labour not to give in to pressure by the Treasury and freeholders to water down the reforms.
Whisper it, but … the framing of the decision to go ahead with a cap seemingly against the Treasury’s will marks another win for Rayner, who gifted for auction a signed copy of her other recent win — the Employment Rights Act — at a fundraiser for the Labour MP Uma Kumaran last night. You might have noticed the path to becoming the unrivaled soft-left choice for the leadership looks a bit clearer these days. On which note …
SCOOP: Playbook hears Rayner, speaking at last night’s fundraiser, made a rallying cry for the government to do more Labour-y things — and to be proud of them. “We’ve done a lot of really good things,” she told a crowd of MPs and Labour types. “But my diagnosis of what’s gone wrong is that people think we’ve got there through being pushed there, as opposed to people thinking that that’s what we stand for and believe. I think that we need to be unapologetically Labour.”
A warning? “We’ve got to make sure that people have a reason to vote Labour and they understand that we’re on the path,” Rayner concluded. “We need to put rocket boosters up it, and I will be making sure that I make my voice heard in that process.” After a quiet few months following her resignation in September, the former deputy leader’s comeback appears to be on.
BATTLE FOR MANCHESTER
GET BY WITH A LITTLE HELP FROM BRAVERMAN: Starmer’s allies reckon they’re on the way to riding out the row over the block on Andy Burnham, after Reform UK’s newest recruit, Suella Braverman, knocked the King of the North off most of the front pages and the top of the BBC News at Ten.
And indeed: Just two MPs, both from the Socialist Campaign Group, brought up Burnham at last night’s PLP meeting. Attorney General Richard Hermer got through the gathering relatively unscathed as he told MPs to focus on governing instead of internal fights. One MP told Playbook’s Bethany Dawson that Hermer was “genuinely excellent” — though they added “it’s a shame the rest of us don’t share his enthusiasm.” The Guardian and other papers have some of Hermer’s words.
Also not sharing Hermer’s enthusiasm: The 50 or so Labour MPs who have signed the latest letter objecting to Burnham’s blocking, per the BBC, i Paper and the Mail’s splash (among others). This is one of two letters being passed around by backbenchers … but they’ll need more signatures before Team Starmer starts to really take them seriously.
Try, try again: Those MPs aren’t the only ones still trying to get their man back into parliament, with some choice pro-Burnham briefing on his next steps making it into the papers. The Telegraph’s Ben Riley-Smith and co. hear Burnham’s allies are now seeking to recreate the composition of the NEC in the mayor’s image, with 16 of its 39 spots up for election in the summer. The Guardian reports he will try again, but that his allies reckon his hopes of fighting this by-election are virtually over with interviews for candidates set to start today.
Waspish: But it’s still hard to see how Burnham could have another go under the current leadership … and whether the relationship between Burnham and Starmer can be repaired. No. 10 sources tell the impeccably connected Guardian Lobby team that relations between the two men are “at a low ebb.” Remember too that another top Labour chronicler, the Times’ Patrick Maguire, had this anecdote from way back in 2021 in his piece on Sunday night: “So enraged was the Labour leader by news of Burnham’s success [in the 2021 Mayoral election] that aides recall him storming from the room ‘with a face like a man chewing a wasp’ as it was announced.”
For what it’s worth … the PM said none of that was true as he delivered his latest defense of the decision in a live podcast recording with the comedian Matt Forde last night, watched by our own Bethany. “What the NEC decided was we didn’t want to open up another front for a fight we didn’t have to have, which was the mayoralty in Greater Manchester … it wasn’t actually about the individual at all,” he insisted.
Also not sharing Hermer’s enthusiasm II: This “senior government figure” quoted in the Times splash, who says “realistically we know that we’re going to lose” in the Gorton and Denton by-election. They said the decision was made because they thought it was a choice between losing the mayoralty or the by-election.
Which, if nothing else … illustrates the electoral hole Labour is in if its senior figures genuinely believe it had no chance of winning a mayoral election where Burnham romped home by more than 50 percent just two years ago.
WHO WILL DELIVER THE BURN? It’s with that context in mind that both Reform and the Greens decamp to Manchester today — with senior figures in the pair of populist parties now firmly reckoning Labour have left the pitch clear for a two-horse race. First up, Reform will unveil its candidate for the seat at 2 p.m. in Denton. A “big-name” candidate is expected, and the Mail’s Claire Ellicot reports policy chief Zia Yusuf could be in the frame.
And as for the lefties … Greens Leader Zack Polanski is due in the constituency this evening to lead a rally from 7 p.m. He won’t be unveiling the party’s candidate in the seat, who is set to be announced by the end of the week. Joint Deputy Leader Mothin Ali told the Times he was “seriously considering” running for it.
OFF TO THE FAR EAST
STEADY AS XI GOES: A year of planning (and teeth-clenching) in No. 10 reaches a climax tonight as Keir Starmer jets off with a planeload of CEOs to China, my colleague Dan Bloom writes while taking a break from some last-minute packing for Beijing’s grim January weather. Just don’t expect Starmer to do a Mark Carney and declare the old world order dead, Dan writes in his big preview piece. Allies of Starmer tell him the PM will keep pursuing his “three-body problem” of the U.S., EU and China — and try not to trigger Donald Trump.
Great minds! Starmer said pretty much the same thing last night in a warm-up interview with Bloomberg. “I’m often invited to simply choose between countries,” the PM told Alex Wickham. “I don’t do that.”
And again: Starmer laid out his diplomatic philosophy in even clearer terms in his podcast interview with Matt Forde. “If you’re a leader on the international stage, you are dealing with whoever is the leader in another country. I mean, it’s that simple,” he said. Wonder which other world leader that could apply to.
But even so … Starmer can’t just have it both ways in his search for economic growth, not least due to China’s threat/epoch-defining challenge (delete as appropriate) to national security.
On which note: The Telegraph splashes on reporting from Rozina Sabur and Gordon Rayner suggesting that China hacked the mobile phones of senior Downing Street officials for several years. They say state-sponsored hackers targeted the phones of some of the closest aides to former Tory PMs Boris Johnson, Liz Truss and Rishi Sunak, particularly those in the latter’s team.
So, unsurprisingly: Officials and execs are bringing secure devices and will have been briefed on the risk of honey traps and hacks (not of the nice journo variety). Dan’s piece includes an eye-popping anecdote about one member of Theresa May’s 2018 delegation who opened the car door … only to find several people with headsets and keyboards, like in a spy film.
To show just how low-key it all is: Chancellor Rachel Reeves met her Chinese counterpart in Davos last week … but the Treasury didn’t publicize it at the time beyond this little-noticed photo on its Flickr account.
Look out for … whether Britain gets long-awaited approval for plans to renovate its embassy in Beijing. Officials say it is “falling down,” with cracked walls and damp patches, but it isn’t clear yet if a decision is imminent — and it looks as if the approval of China’s London embassy will be hauled through the courts. One person with knowledge said China held off formally confirming Starmer’s visit until the London embassy decision was finalized.
There’s this, too: The FT’s Lucy Fisher scoops that the government plans to tighten scrutiny of Chinese activity within its Foreign Influence Registration Scheme (FIRS) but without placing China in the same bracket as Russia or Iran. She hears those plans which are being drawn up will be unveiled later this year, but that the hope is they can protect economic links with China AND better protect the U.K. from security threats.
Then there are human rights: And ominously, the sentencing of Hong Kong pro-democracy publisher (and British citizen) Jimmy Lai is imminent. Some had even expected it this week … though one campaigner said last night that they reckon it may have been pushed back. Probably for the best if so. Read the full preview here.
TODAY IN WESTMINSTER
PUB GRUB: Rachel Reeves’ relief package for pubs could come as soon as today, the FT, Times and Telegraph reported last night. Playbook hears the package was still being finalized last night, but that it was likely to come today.
What’s in it, and what’s not: Millions in support for the pub sector seemed to be settled, with the FT and Tel both hearing it will be worth around £100 million a year. But it isn’t clear how long any tax relief will last, or how many pubs will benefit. The chancellor is still said to have resisted calls for wider support for the hospitality industry, to the chagrin of many Labour MPs.
Including … a group of 47 Labour MPs who signed a letter last week calling for Reeves to look again at the impact of raising business rates on music venues. The letter, seen by Playbook, urged her to pause implementing the new rates on music spaces.
HOTLINE DON: Donald Trump regularly rings Keir Starmer on his mobile, the PM revealed in last night’s podcast interview with Forde (which is due to go online later today). “Once I was in the flat with the kids cleaning pasta off the table after their dinner, and the phone goes and it’s Donald on the phone,” Starmer said. “Another time, I’d say most inconvenient, we’re halfway through the Arsenal-PSG game.”
Oh, and: Starmer donned a pair of sunglasses to mock Emmanuel Macron. TikTok here.
COURT IS (PERMANENTLY) IN SESSION: Four former court buildings being used as temporary “Nightingale Courts” opened during the pandemic will become permanent, Courts Minister Sarah Sackman has announced.
BATTLE SCARS: Reform Deputy Leader Richard Tice told the FT that local government officers are trying to “bully” his party by threatening not to sign off on annual budgets if Reform-led councils drastically cut employer pension contributions. He’s described the situation as a “ferocious battle.”
RIGHT ON TIME: Danish MP Rasmus Jarlov joins the Polar Regions APPG for a briefing on Greenland at 3 p.m.
KICKING OFF: Nearly 1,000 community projects across the U.K. are getting funding for new all-weather pitches, floodlighting and modern changing facilities through the Multi-Sport Grassroots Facilities Programme.
TOUGH NUMBERS: The level of people living in very deep poverty in the U.K. has hit its highest level on record, with 6.8 million people living in the deepest form of poverty, according to the Joseph Rowntree Foundation. The Guardian has a write-up.
STATS DROP: The results of an NHS England health survey drops at 9.30 a.m.
SW1 EVENTS: Reform’s Danny Kruger addresses the Civitas think tank on Whitehall reform from 2 p.m. … Labour MP Barry Gardiner hosts a Superb-Owl reception with RSPB and ICCF UK at 6.30 p.m.
REPORTS OUT TODAY: The government will not rule out future interventions if the level of venture-capital investment in female entrepreneurs does not improve, ministers have told the Women and Equalities committee … Moving new public sector employees onto defined contribution pension schemes could save taxpayers £37 billion a year in the long run, according to Policy Exchange … Seven in 10 school-wear retailers say the schools they’re working with oppose the government’s cap on branded uniform items, according to the Schoolwear Association, covered by the Express … Energy infrastructure generates the strongest GDP boost across all sectors, according to BCG research.
HOUSE OF COMMONS: Sits from 11.30 a.m. with Treasury questions … Labour MP Julie Minns’ 10-minute rule motion on electrically assisted pedal cycles … an allocation of time motion and all stages of the Medical Training (Prioritisation) Bill. Conservative MP Richard Fuller has the adjournment debate on the impact of East Park Energy on his North Bedfordshire constituency.
On committee corridor: The Defence Committee grills Defence Secretary John Healey on his work (2 p.m.).
HOUSE OF LORDS: Sits from 2.30 p.m. with the introduction of Labour peers Tracey Paul and Michael Barber … oral questions on the impact of the 2025 budget on grassroots music venues, the U.K.’s implementation of ILO Convention 190, and plans to regulate the development of superintelligent AI … and a debate on Holocaust Memorial Day.
BEYOND THE M25
NORTH SEA BATTLES: The government’s refusal to grant new oil and gas licenses is pushing the U.K.’s energy capital Aberdeen toward a “coal-miner” style collapse, according to the Jobs Foundation.
DIFF’RENT STROKES: Scottish Labour Leader Anas Sarwar holds an 11 a.m. press conference to mark 100 days until the Holyrood election. He’s going to warn there are only 100 days to “save the NHS” — but the Q&A afterwards will probably compel him to give a view on Andy Burnham. Down south, SNP Westminster Leader Stephen Flynn is doing a photo call and interviews to unveil the SNP election offer to “vote SNP to sack Starmer.”
ORDER UP: European Council President António Costa and European Commission President Ursula von der Leyen are in New Delhi for the EU-India summit, hosted by Indian Prime Minister Narendra Modi. They will, among other things, talk about their shared “responsibility to protect the rules-based international order.”
MIDDLE EAST LATEST: The U.S. suggested it could take military action to force Hamas to disarm or allow Israel to do so before it moves forward with rebuilding the Gaza Strip. A U.S. official told reporters that if Hamas members “decide to play games, then obviously President Trump will take other actions.” My Stateside colleagues have the story.
ON THE GROUND IN MINNESOTA: A Republican candidate for Minnesota governor, Chris Madel, has withdrawn from the race. In a social-media video, Madel said the ICE operation in the state has “expanded far beyond its stated focus on true public safety threats,” and he cannot support the national Republicans’ approach of “state retribution on the citizens of our state.” Read more on AP.
Elsewhere in the U.S. … Donald Trump is delivering a speech in Iowa around 8 p.m. U.K. time. He is meant to focus on energy and the economy, but who knows with this guy.
MEDIA ROUND
Housing Secretary Steve Reed broadcast round: Times Radio (7.05 a.m.) … Sky News (7.15 a.m.) … BBC Breakfast (7.30 a.m.) … GB News (8.20 a.m.) … GMB (8.30 a.m.).
Shadow Business Secretary Andrew Griffith broadcast round: Times Radio (7.45 a.m.) … GB News (8 a.m.) … Talk (8.50 a.m.) … Sky News (9.15 a.m.).
Also on BBC 5 Live: Home Secretary Shabana Mahmood (2.10 p.m.).
Also on Nick Ferrari at Breakfast: Conservative peer Daniel Finkelstein (7.15 a.m.) … phone-in with Shabana Mahmood (8 a.m.) … former Conservative West Midlands Mayor Andy Street (9.20 a.m.).
Also on Good Morning Britain: Holocaust Memorial Day Trust CEO Olivia Marks-Woldman (8.15 a.m.).
Also on Times Radio Breakfast: Reform MP Danny Kruger (7.45 a.m.) … former Conservative frontbencher Jacob Rees-Mogg (8.20 a.m.) … Holocaust Memorial Day Trust Chair and former Chancellor Sajid Javid (8.45 a.m.).
Also on Sky News Mornings: Sajid Javid (8.15 a.m.) … former U.K. Ambassador to the U.S. Kim Darroch (8.30 a.m.).
Politics Live (BBC Two 12.15 p.m.): Labour MP Chris Curtis … Conservative MP Wendy Morton … environmentalist Dale Vince.
TODAY’S FRONT PAGES
POLITICO UK: Starmer finally goes to China — and tries not to trigger Trump.
Daily Express: Now stop the hate.
Daily Mail: Burnham rebellion growing.
Daily Mirror: Reform’s latest con.
Daily Star: ‘You are my everything.’
Financial Times: Dollar slumps to four-month low and yen rises as gold breaks $5,100 barrier.
Metro: More January transfer deals!
The Daily Telegraph: China hacked phones in No. 10.
The Guardian: Tories face backlash after ‘mental health’ jibe over Braverman’s exit.
The i Paper: Tories weaponise ‘mental health’ claim on defector Braverman — as exodus grows.
The Independent: Mahmood’s AI boost to fix broken police.
The Sun: Clan United.
The Times: Labour fears stumbling to third in by-election.
LONDON CALLING
WESTMINSTER WEATHER: Chucking it down. High 10C, low 5C.
SPOTTED … at ASI’s “Back to School” Party at College Green Group, munching on salmon and wine: Shadow Work and Pensions Secretary Helen Whately … Shadow Business Secretary Andrew Griffith … Conservative MPs Jack Rankin and Joe Robertson … Growth Commission Director and Liz Truss spox Jonathan Isaby … Conservative peers Matthew Elliott, Daniel Moylan and Peter Lilley … former MEP Lance Forman … CCHQ’s Sheridan Westlake and Victoria Hewson … LOTO’s Sonia Zvedeniuk … ASI’s James Lawson, Jasper Ostle, Mitchell Palmer and Joanna Marchong … College Green Group’s Thomas Borwick … GB News Political Editor Christopher Hope … and Speccy hacks James Heale and Michael Simmons.
NEW GIG: Georgia Faye Henderson has joined Deputy Prime Minister David Lammy’s team as a special adviser.
ONE FOR THE SHELF: Former NFU President Minette Batters’ book “Harvest,” will be published on May 28.
MEA CULPA: Jon Pearce is no longer the parliamentary chair of Labour Friends of Israel.
WRITING PLAYBOOK PM: Emilio Casalicchio.
WRITING PLAYBOOK WEDNESDAY MORNING: Andrew McDonald.
HAPPY BIRTHDAY TO: Tory peer Patricia Rawlings … British Chambers of Commerce Director General Shevaun Haviland … New World editor-at-large Matthew D’Ancona … Guardian columnist George Monbiot … former U.K. Ambassador to China Christopher Hum … former Scottish Conservatives Leader Douglas Ross … former Erewash MP Maggie Throup … former Sittingbourne and Sheppey MP Gordon Henderson … former Health Secretary Alan Milburn.
PLAYBOOK COULDN’T HAPPEN WITHOUT: My editors Alex Spence and James Panichi, diary reporter Bethany Dawson and producer Hugh Kapernaros.
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