Closing summary
That’s all from me for today. Thanks for reading and commenting. Here’s a summary of the latest news:
- The chancellor insisted he did not have a “magic wand” to make cost of living pressures disappear, while also insisting he was right not to use some of the tools at his disposal to help struggling households. Rishi Sunak sought to play up the role of global problems in driving inflation – not least of energy prices – while insisting he was right not not cut VAT on home energy bills because it would disproportionately benefit those in large homes.
- The budget has the country set for a flat recovery for living standards, the Resolution Foundation warned. There are fears the average household could see their tax rise by thousands of pounds during Boris Johnson’s premiership, a thinktank has warned and the Office for Budget Responsibility (OBR) said the plan would leave the overall tax burden at its highest since the final period of Clement Attlee’s postwar Labour administration 70 years ago.
- The shadow chancellor Rachel Reeves described the budget as “hammering working people, while giving banks a tax cut. “The Tories have no plan to tackle the cost-of-living crisis, no plan to shift the unfair taxes they’ve hit working people with and no plan for growth,” she said.
- The decision to raise taxes on workers amid high levels of inflation will squeeze living standards next year, causing “real pain” for low-income households, the Institute for Fiscal Studies warned. The UK’s leading tax and spending thinktank said a middle earner was likely to be worse off next year as high rates of inflation and tax rises negate weak growth in wages.
If you’d like to follow our live pandemic coverage, my colleague Tom Ambrose has the latest news:
Richard Ratcliffe, the husband of Nazanin Zaghari Ratcliffe – the British Iranian detained in Tehran since 2016 – left frustrated and largely empty handed from an hour-long meeting with the new foreign secretary, Liz Truss. Following the meeting, he returned to his hunger strike outside the Foreign Office.
Ratcliffe had pressed for an explanation on why the government had not paid an acknowledged £400m debt to Iran, and urged ministers to declare the Iranian detention of dual nationals as hostage-taking.
The foreign secretary did not give us anything new. It was a reiteration of the status quo. She was very caring, said she was committed, working hard, but cannot talk about the debt as it is complicated. It is very clear they see their role as doing no harm.
She said: ‘There are things I cannot tell you’, but she did not give us anything about to understand what the complications are, or why the payment is taking so long. I told the foreign secretary that I was deeply suspicious at this stage that they could not explain the problem.
They cannot keep hiding behind ‘there are things we cannot tell you’ and ‘there are secret reasons that are too complicated to explain’. Our story is not that complicated. There is just a reluctance to explain or change. It does not really wash after five years.
I told her: ‘You need to be brave in sorting the debt and challenging hostage-taking. Otherwise, you are inviting these guys to play cat and mouse with Nazanin, to pick up others and let them feel emboldened.’
According to Ratcliffe, Truss – accompanied by officials and the Middle East minister James Cleverly – made no comment, despite being pressed twice to acknowledge that payment of the debt might lead to his wife’s release.
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Teaching black history could help to prevent racism, MPs have heard in a debate to mark Black History Month.
The Labour MP Bell Ribeiro-Addy has told a Westminster Hall debate calls to teach black history often end up “descending into a so-called war on woke and culture wars”.
When we ask the government to teach black history as part of the curriculum, we are not asking them to do so over other aspects of British history. We are asking them to recognise that black history is British history. It is part of that history and it is not taught widely as it should be.
If racism is ignorance and education is the absence of ignorance, the obvious answer to dealing with racial inequality is simple and it costs the government nothing to start just there with education.
The idea that teaching children about racial inequality – as some teachers will do in Black History Month – is not what is holding back working class children in our education system.
It wasn’t teaching racism that closed down hundreds of youth services or cut funding per pupil in this country, that was this government. It is these policies that hold back working class children from all of our communities.
A former education recovery tsar has described the chancellor’s latest catch-up offer as “meagre” and warned that the government’s “half-hearted” deal for children was a “false economy”, my colleagues Sally Weale and Richard Adams write.
Sir Kevan Collins said he was “frustrated” and “disappointed” by the government’s continuing lack of ambition for children’s learning recovery, and that Rishi Sunak’s budget showed that education had slipped down the pecking order of priorities in Whitehall.
The former teacher resigned from his role as the government’s education recovery commissioner in June after his proposals for a £15bn long-term catch-up programme for children whose learning has been disrupted by the pandemic were scaled back to just £1.4bn by the Treasury.
Asked to comment on the additional £1.8bn for catch-up announced by the chancellor on Wednesday, he said any additional funding for education was welcome, but it still meant less than £500 of recovery funding for each child in England, compared with £1,800 in the US and £2,100 in the Netherlands.
This latest top-up means that the government has now committed close to £5bn for recovery programmes, including the national tutoring programme and funding allocated directly to schools. Collins said:
It’s great to see additional money – always – in education, but it’s not enough.
I’m concerned that these meagre measures reveal a failure to recognise the kind of foundational role schools play in creating fair and prosperous communities. We know the pandemic and learning loss has hit our poorest communities hardest.
We know potentially we have wiped out all the work we did to narrow the gap and the gap is now widening between disadvantaged children and their peers. The short-term saving offered by a limited recovery programme will be dwarfed by the long-term cost of successive cohorts leaving education with lower skills.
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Jersey’s government has responded to French threats over fishing licences. In a joint statement, the Channel island’s ministers for external affairs and environment, Ian Gorst and John Young, said some extra permits – permanent and temporary – would be issued to French fishers but condemned Paris’s “retaliatory measures”. They said:
We are extremely disappointed at the French government’s announcement, made yesterday afternoon, pursuing an approach of retaliatory measures.
Yesterday morning, government of Jersey officers met officials from France, the UK and the European Commission and made further progress on the outstanding applications from French vessels for licences to fish in Jersey’s territorial waters.
The outcome of that meeting was that 162 French vessels will be licensed to fish in Jersey’s territorial waters from this Friday.
Of the 162 licences, 113 are permanent (categorised as “green”) and 49 will be issued as temporary (“orange”). Vessels that receive a temporary licence will be able to fish in Jersey waters until 31 January 2022, to give them time to provide further data which is necessary to secure a permanent licence. Jersey officials have agreed to examine in detail additional evidence that has been provided by French authorities in the last week.
Currently, there are 55 vessels in a third (“red”) category that will not have a licence to fish in Jersey waters after 31 October. The door remains open for further data to be submitted and new applications that meet the criteria under the trade and cooperation agreement can be submitted at any time.
The announcement means there are an extra two permanent permits and 18 more temporary licences, reducing those rejected from 75 to 55.
On Wednesday, the French government said that, unless further permits were issued, it would ban British vessels from landing seafood in its ports, tighten controls on UK imports and potentially reduce energy supply to Jersey. The island relies on sub-sea cables that deliver energy from French nuclear power stations.
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Ministers are monitoring the latest dispute with France over the issuing of licences to French fishing boats, Downing Street has said. The prime minister’s official spokesperson said the UK fully supported the way Jersey and Guernsey were handling the issue, which was “entirely in line” with the provisions of Britain’s trade deal with the EU.
We are monitoring this situation very carefully. We have relayed our concerns to the (European) commission and the French government. We think the threats outlined yesterday evening were disappointing, were disproportionate and were simply not what we expect from a close ally and partner.
I can’t at this moment set out exactly what our response might be. It will be appropriate, it will be calibrated. We want to have further discussions with French government and the EU. We stand ready to respond appropriately.
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The independence of the elections watchdog is vital, ministers have heard, as MPs questioned whether the body will be subject to government interference in future.
Cat Smith, a Labour MP acting as a representative of the Electoral Commission, told the Commons the elections bill would give “significantly broader” scope and power to the government over the regulator than it has over similar bodies.
The SNP accused ministers of a “grubby power grab” over moves in the bill to set the Electoral Commission’s overall strategy; something it cannot do for other regulators. Deidre Brock, the MP for Edinburgh North and Leith, said:
The elections bill doesn’t only require Scottish voters to show ID at UK general elections, but also gives the Westminster government the powers to set the Electoral Commission’s strategy and policy statement.
Given the Scottish parliament also pays towards the commission, isn’t this another case of a grubby Westminster power grab and an attack on our devolved settlement?
On behalf of the Electoral Commission, Smith said:
The elections bill does cover the whole of the UK but some provisions would apply differently to elections in England, Scotland, Wales and Northern Ireland.
The commission’s view is that as currently drafted, the proposals for a strategy and policy statement are not consistent with its role as the independent regulator.
The scope and power is significantly broader than similar mechanisms in place for other regulators such as Ofcom, Ofgen and Ofwat, which do not include giving guidance about specific matters.
The existence of an independent regulator is fundamental for maintaining confidence in our electoral system. It is vital there is no actual or perceived involvement from government in the commission’s operational functions or decision making.
A man has been charged after the deputy Labour leader, Angela Rayner, received a series of threats.
Benjamin Iliffe, 36, of Slade Way, Chatteris, in Cambridgeshire, has been charged with malicious communications and possession of cannabis, Greater Manchester police (GMP) said.
The force also said a 52-year-old man arrested in Halifax, West Yorkshire, on Wednesday has been bailed, while a 70-year-old man has been arrested on suspicion of malicious communication relating to abusive emails received on Saturday 16 October.
One man has been charged and an additional arrest has been made in relation to a police investigation into multiple reports of threatening and abusive phone calls, emails and letters towards a woman in Ashton-under-Lyne.
Yesterday, officers from GMP attended an address in Halifax and arrested a 52-year-old man.
The man was arrested on suspicion of malicious communications and has since been released on bail pending further enquiries. His arrest relates to abusive phone calls received on Friday 15 October.
An additional arrest was made this morning in conjunction with South Yorkshire police. A 70-year-old man was arrested on suspicion of malicious communication and he remains in custody for questioning. His arrest relates to abusive emails received on Saturday 16 October.
In conjunction with the investigation, police in Cambridgeshire have also charged one man. Benjamin Iliffe of Chatteris, Cambridgeshire, has been charged with malicious communications and possession of cannabis.
He has been remanded into custody and will appear before Huntingdon magistrates’ court later today. Enquiries remain ongoing and GMP continues to work in partnership with Cambridgeshire constabulary and South Yorkshire police.
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The business secretary, Kwasi Kwarteng, has told the Commons the budget is a “blueprint for a stronger Britain”, PA Media reports.
It’s a country where if you have innovative ideas you will get the support you need to turn it from a dream into reality.
It’s a country where if your talent is nurtured and your skills are honed you will get the support and the ongoing interest and engagement – strong engagement – from the government.
It’s a country where if someone does an honest day’s work they will receive a decent wage.
We have every right to be confident about our future. I think many of us have listened to the litany of woe and despair for too long, and we feel, as my right honourable friend the chancellor said yesterday, that we are optimistic, we are very excited about the future of our country.
He dismissed criticism from the shadow business secretary, saying he had “heard it all before”, and criticised Ed Miliband’s performance at PMQs as “the same litany of doom and gloom, and it will prove no more effectual in 2021 than it did in 2015”.
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A director of the company that owns a British trawler detained by French maritime police has told AFP the act appears to be “politically motivated”.
Andrew Brown, director of sustainability and public affairs at Macduff Shellfish, based at Mintlaw in Aberdeenshire, confirmed that the vessel was approached while fishing for scallops in the early hours of Thursday morning.
“It does seem to be a misunderstanding. We believe we have been fishing legally in French waters,” he told AFP.
Access to the waters is “a little bit complicated”, but they opened for fishing earlier this month, he said.
“I suspect it is politically motivated,” he added, since “we’ve not had this issue” previously.
The Cornelis is now being held at Le Havre while the skipper is interviewed by French officials, Brown added.
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IFS predicts ‘real pain’ for low-income households
Rishi Sunak’s decision to raise taxes on workers amid high levels of inflation will squeeze living standards next year, causing “real pain” for low-income households, the Institute for Fiscal Studies has warned.
Issuing its verdict after the chancellor’s budget on Wednesday, the UK’s leading tax and spending thinktank said a middle earner was likely to be worse off next year as high rates of inflation and tax rises negate weak growth in wages.
It said that while Sunak was promising a new age of optimism, voters might not get much feelgood factor after the chancellor announced £40bn of tax increases this year – the largest increase since 1993.
Paul Johnson, the director of the IFS, said the outlook for living standards jarred with the chancellor’s upbeat tone.
Over the next several years a combination of tax increases and high inflation will mean very slow growth in living standards.
High inflation, rising taxes and poor growth, still undermined more by Brexit than by the pandemic, will see real living standards barely rising and, for many, falling over the next year.
The thinktank said the chancellor’s plans came after a tough decade for households, with weak levels of economic growth and austerity.
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Miliband also told MPs:
Yesterday we saw raid upon raid on the living standards of working people. Council tax hikes hidden in the budget documents, not announced by the chancellor.
A stealth raid on the self-employed worth £1.7bn over the coming five years, not announced by the chancellor.
And, of course, the national insurance hike on ordinary families confirmed. Maybe I’m a bit old-fashioned in this but let’s remember this is a direct breach of the promise every member of the party opposite made to their constituents at the general election.
Miliband said the “most shameful” part of the budget was the government’s “refusal to reverse” the cut to universal credit, which took place in recent weeks via the removal of the £20 per week uplift.
He raised questions about the lack of support for energy-intensive industries amid soaring energy prices before questioning the Treasury’s commitment to the government’s green agenda. Miliband also criticised the air passenger duty changes, adding:
Once again it shows the Treasury is not signed up to this agenda.
Removing the “Instagram filter” from Rishi Sunak’s budget reveals it offers an “age of stagnation” rather than optimism, according to the shadow business secretary.
Ed Miliband said there has been 11 years of “low growth, stagnant wages, falling living standards” under the Conservatives, with the budget failing to tackle the cost-of-living crisis. Opening day two of the budget debate, Miliband told the Commons:
It’s less than 24 hours since the budget was delivered and it’s already unravelling because of the chasm between the claims of ministers and the reality that working people face.
To listen to the chancellor yesterday, it’s clear he is living on a totally different planet. He told us he’d deliver an age of optimism. But when you take off the Instagram filter all he offers is an age of stagnation. Low wages, low growth, high taxes, more lost Tory years.
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Returning to the issue around the detained trawler, the SNP’s environment spokeswoman, Deidre Brock, has pressed Eustice to offer more details, adding:
We have a skipper of a Scottish scalloping vessel due in court, it’s simply not good enough that the secretary of state doesn’t have answers to those questions.
Eustice, on the vessel thought to be detained, said:
What I’ve been able to establish so far in respect of that vessel is that they were on the list that was provided by the MMO (Marine Management Organisation) initially to the European Union.
The European Union therefore did grant a licence. We are seeing some reports that for some reason they were subsequently withdrawn from the list, it’s unclear why that might have been at the moment.
Eustice said he was awaiting further details from Marine Scotland and is expecting a response in the “next hour or so”.
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'This is a budget hammering working people', says shadow chancellor
Responding to the Resolution Foundation report this morning, the shadow chancellor, Rachel Reeves, has said:
Revelations from yesterday’s budget that taxes will be £3,000 more per household than when Boris Johnson became prime minister are staggering.
This is a budget hammering working people, while giving banks a tax cut.
The Tories have no plan to tackle the cost-of-living crisis, no plan to shift the unfair taxes they’ve hit working people with and no plan for growth.
This was an out-of-touch, high-tax, low-growth budget from a Conservative government that would rather waste billions of pounds of taxpayer cash than give households a VAT cut on their heating bills heading into winter.
Labour would tax fairly, spend wisely, and grow our economy with our climate investment pledge and plan to buy, make and sell more in Britain.
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While he has declined to commit to cutting taxes before the next election, the chancellor has said he is unhappy with the increases he has introduced and that his ambition is to lower the tax burden.
Now, a thinktank has warned that Sunak will have to develop “new and radical ways” to realise that ambition. The Institute for Fiscal Studies (IFS) said he has taken the state to the levels “not seen in normal times since the days of Geoffrey Howe”; Margaret Thatcher’s first chancellor.
In the IFS’ comprehensive budget analysis, its director, Paul Johnson, stressed that Sunak was doing so with “almost entirely a set of policy choices unrelated to the pandemic” by responding to government departments having been “starved of funding for a decade” under austerity.
After “historic tax increases”, the IFS director said the story of Wednesday’s budget was of “spending increases and a worrying outlook for living standards”. Johnson warned of the challenges while trying to fulfil the demands of public services that have suffered a decade of cuts.
In opening remarks at a post-budget event in central London, Johnson is due to say of Sunak:
If he is to achieve the ambition he set out at the end of his speech to get taxes down and reduce the size of the state, then he is going to have to come up with some pretty new and radical ways to manage those pressures.
He would be helped by an economy growing rather more enthusiastically than it has managed for some time now.
Finding the key either to reforming public services to make them cheaper and more efficient, or to getting higher economic growth, are challenges which have defeated most of his predecessors.
Johnson said if the current forecasts were correct then the chancellor could be in line for a pre-election giveaway of “perhaps £7bn and still maintain some fiscal headroom ... But, given his newly stated fiscal targets, it’s not a huge or comfortable cushion”.
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The home secretary, Priti Patel, has described the detention of a British fishing trawler by French authorities as disappointing. Asked if she was concerned about the latest action in the dispute about fishing rights and whether she had spoken with her French counterpart, she said:
It is disappointing, and we as a country fulfilled all our obligations under the TCA. But at the same time, discussions across government will continue, both at commission level but also with counterparts within the French administration.
The environment secretary said he had asked officials to urgently investigate the situation. The shadow environment secretary, Luke Pollard, asked in the Commons if an external waters licence has been issued “to the Scottish scalloper currently detained in Le Havre, as its name does not appear on the MMO website. Is that an oversight?” George Eustice replied:
My officials are investigating the circumstances around this vessel that’s been detained in France.
It is too early to be able to identify precisely what happened. But I have seen reports that it was on a list originally and then appeared not to be on a list. But it is something that I’ve asked our officials to urgently investigate.
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The shadow chancellor, Rachel Reeves, said she welcomed increases in spending announced during yesterday’s budget, but said there were areas that gave her “cause for concern”. Highlighting the need for greater investment in education, she has told BBC Radio 4’s Today programme:
If we are going to grow the economy sustainably we have got to invest in our young people. Unless we ensure that kids catch up from that missed out education (during the pandemic) there will be a long-term cost to our economy.
She called the announcement of a cut to air passenger duty ahead of the Cop26 climate summit astonishing.
We wouldn’t have gone ahead with that cut. I find it astonishing that, the week before Cop26, where we are supposed to be showing global leadership, we have cut air passenger duty on domestic flights.
We should be encouraging people to use our train network for those journeys.
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Sunak has declined to commit to cutting taxes before the next general election. Asked on Sky News whether he would slash taxes before the next Westminster polling day, which is expected to be held by 2024, the chancellor said:
We started cutting taxes yesterday, our priority being those on the lowest incomes.
There is a tax cut for 2 million families (the reduction of the universal credit taper rate) and it is not going to come in as normal next April – it is going to come in, in a few weeks time so we can get help to people right now.
But, as I said very clearly yesterday, my ambition is to lower taxes for people, that is what I would like to do as chancellor.
We had to take some corrective action as a result of the crisis and the response we took to it, but hopefully that now is done and, as we demonstrated yesterday, our priority is to make sure that work pays, that we reward people’s efforts and I’m delighted we could make a start on that yesterday.
Pressed on whether there would be income tax cuts before the next election, the chancellor replied:
No, no – let’s talk about this budget, rather than all the other ones.
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'Budget likely to produce flat living standards recovery'
Rishi Sunak’s budget has the country set for a flat recovery for living standards amid fears the average household could see their tax rise by thousands of pounds during Boris Johnson’s premiership, a thinktank has warned.
The Office for Budget Responsibility (OBR) has said the budget would leave the overall tax burden at its highest since the final period of Clement Attlee’s postwar Labour administration 70 years ago.
The Resolution Foundation said this burden combined with higher growth, inflation and public spending than previously expected prompted it to warn “that Britain could be set for a flat recovery for household living standards”.
The foundation’s analysis found the chancellor’s plans will mean that, by 2026-27, tax as a share of the economy will be at its highest level since 1950, amounting to a £3,000 increase per household since Boris Johnson became prime minister.
The weakest decade of pay growth since the 1930s means real wages in the UK are set to fall again in 2022, with the foundation writing:
Real wages are on course to grow by just 2.4% from May 2008 to May 2024 – a far cry from the 36% real wage growth experienced between May 1992 and May 2008.
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Burnley and Bury, two distinct towns separated by a 20-mile drive, were interchangeable to Sunak this morning as he tried to talk up the government’s so-called levelling-up agenda. The chancellor was conducting broadcast interviews in the latter but he seemed to think he was in the former.
The BBC Breakfast presenter Ben Thompson told Sunak he was from Burnley, which is in Lancashire. Sunak said:
It is not just about being in the north [of England], by the way. We’re here in Burnley but, if you are growing up in a village in the south-west or even on the south coast, people want to feel opportunity is there for them, wherever they happen to be.
I put it down to two things: One is having pride in the place you call home and a lot of what we announced yesterday, the levelling-up fund – bids like Burnley market, world famous Burnley market, benefiting from £20m of investment.
That’s going to create jobs. It is about improving the every day infrastructure of our communities.
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But he defended his decision not to cut VAT on home energy bills to counter rising energy prices. Asked on BBC Breakfast why he did not make such a move, the chancellor said:
Because, as many independent experts and thinktanks have pointed out, it is not a particularly well-targeted measure because people living in very large homes with large energy bills would disproportionately benefit from that.
Actually, where we want to target support is on those who are a bit more vulnerable.
That is why just over a month ago, or around about then, we announced half-a-billion pounds in something called the household support fund, and that will provide £150 for about 3 million of our most vulnerable households, to help them with some of those higher bills through the winter period.
I think that is a more targeted approach to get help to those who really need it, not a very large VAT cut, the bulk of the benefit of which would end up going to people with large homes with big bills who probably don’t need the help.
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Here’s a little more detail on Sunak’s comments this morning. During an appearance on BBC Radio 4’s Today programme, he was asked about the impact of inflation on price increases. He said:
I addressed inflation yesterday in the budget speech and I know people will have concerns about that and I wanted to provide a bit of an explanation and some reassurance on what was going on.
It is largely down to two global forces: one is the impact of rapidly reopening economies putting pressure on global supply chains and the other factor is, of course, energy prices.
I wish I did but I don’t have a magic wand that can make those global challenges disappear; they are going to be with us for a little while.
But where the government can make a difference, we are – whether it is the tax cut, whether it is freezing fuel duty, whether it is helping people with energy bills through the winter, where we have put support in place – we are doing what we can.
Sunak offers little comfort to struggling households
The chancellor has insisted he does not have a “magic wand” to make cost of living pressures disappear, while also insisting he was right not to use some of the tools at his disposal to help struggling households.
Rishi Sunak has sought to play up the role of global problems in driving inflation – not least of energy prices – while insisting he was right not not cut VAT on home energy bills because it would disproportionately benefit those in large homes. He’s in Burnley or Bury – depending on whether you believe Rishi Sunak or Rishi Sunak – doing the morning media round following his budget yesterday.
In Westminster, the Speaker of the Commons Lindsay Hoyle has granted an urgent question in the Commons on the fishing dispute in which a British trawler has been detained by the French. That will be asked by the SNP’s environment, food and rural affairs spokeswoman Deidre Brock and is expected from 10.30am. There will also be business questions and a continuation of the budget debate.
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