Robert Jenrick and Kemi Badenoch are the final two candidates to become Conservative leader after James Cleverly was eliminated in the last round of voting among Tory MPs in a stunning turnaround of fortune. Badenoch has always been firmly on the right of the party, and Jenrick has shifted sharply to the right, particularly on immigration, since resigning from the Home Office, and the result of the ballot has alarmed One Nation Tories. Labour and the Liberal Democrats believe that the Conservatives had a better chance of recovering under Cleverly, and that today’s result – almost certainly caused, at least in part, by some Cleverly supporters trying to vote tactically to keep one of the rightwingers out – may help Keir Starmer’s chances of winning a second term. Badenoch is now the favourite, based on polling and surveys of Tory members, but she does not have a strong lead over Jenrick and a pre-conference poll said she was just four points ahead. (See 3.47pm.) Keir Starmer has declined to rule out raising employers’ national insurance payments amid speculation that introducing them to pension contributions is being considered as part of the budget. Angela Rayner, the deputy PM and housing secretary, has called in a rejected planning application for a multimillion-pound film studio development in what is being closely watched as a test of Labour’s appetite to prioritise economic growth in the creative industries. Caampaigners have accused the government of dragging its heels over promised changes to the leasehold system in England and Wales, with homeowners still waiting for measures passed by the last government to be enacted. Ben Wallace, the former Conservative defence secretary, has taken up a new job advising Saudi Arabia on reform, governance and security. Rough sleeping will head back towards record levels unless Labour fills a looming £1bn shortfall in frontline funding when deals agreed by the last government expire in the coming months, dozens of homelessness charities have said.