[ad_1]
Kwarteng says it would be ‘premature’ to decide if benefits will, as normal, rise in line with inflation
In May, when the then chancellor, Rishi Sunak, announced a £15bn package of measures to help people with rising energy costs, he said that he expected benefits for next year to be uprated in line with the inflation figure for September, as usual. That would mean “a very significant increase in benefits next year, in excess of the rate of inflation, which will be very positive for those in receipt of them”, he told MPs.
But that no longer applies. Last night, on ITV’s Peston, Chris Philp, the chief secretary to the Treasury, refused to commit to uprating benefits in line with inflation. And on his visit to Darlington Kwasi Kwarteng heightened speculation that benefits won’t be uprated in line with inflation. Asked if he would honour the commitment of the previous government, he said:
We are talking about helping people in the round. It is premature for me to come to a decision on that. But we are absolutely focused on making sure that the most vulnerable in our society are protected through what could be a challenging time.
The next question was about whether Kwarteng was committed to maintaining the triple lock, which ensures that the state pension rises in line with earnings, or inflation, or 2.5%, whichever is higher, and this time his answer was very different. He said:
The prime minister has been absolutely committed to the triple lock and we are absolutely committed to maintaining it.
Key events
-
Labour have 33 point lead over Tories in new YouGov poll
-
Kwarteng criticised for refusing request to give evidence to Commons Treasury committee about mini-budget
-
NASUWT issues strike threat to Department of Education over pay
-
Bank of England economist defends BoE waiting until November for next interest rate decision
-
Kwarteng says it would be ‘premature’ to decide if benefits will, as normal, rise in line with inflation
-
Union leaders say they fear ‘new era of austerity’
-
Mini-budget will have ‘almost negligible’ impact on growth, creating extra tax revenue of just £6bn, says thinktank
-
Kwarteng rejects calls for mini-budget to be shelved, saying ‘we’re sticking to growth plan’
-
Unite and Unison accept improved pay deal for council workers in Scotland
-
41% of mortgage products taken off market since mini-budget, latest figures show
-
Union leaders demand ‘cast-iron assurance’ from Truss that she rule out real-terms cuts to public services
-
SNP says ‘reckless, clueless’ Truss failed to provide reassurance with ‘car crash interviews’
-
Labour urges Tory MPs to join calls for recall of parliament, saying Truss’s interviews ‘made disastrous situation worse’
-
Lib Dem leader Ed Davey renews call for parliament to be recalled
-
Ken Clarke urges government to make statement soon to reassure markets
-
Scotland’s deputy first minister says Truss’s stance on mini-budget unsustainable
-
Treasury minister seems to rule out bringing forward publication of medium-term fiscal plan
-
Truss criticised for wrongly saying no household will pay more than £2,500 under energy price guarantee
-
Truss’s interview round – verdict from Twitter commentariat
-
Liz Truss’s local radio interview round – snap verdict
-
Truss suggests Putin primarily to blame for UK’s economic crisis
-
Truss refuses to acknowledge that mini-budget has made higher interest rates more likely
-
Truss does not back Rees-Mogg calling opponents of fracking ‘luddites’
-
Truss says ‘difficult international situation’ contributes to UK’s problems
-
Truss indicates she won’t change course, saying she set out ‘right plan’ in mini-budget
-
Truss says she has to do ‘what I believe is right’ when asked about criticism of mini-budget
-
Truss defends mini-budget, says she is prepared to take ‘controversial and difficult decisions’
-
Treasury minister confirms government department being asked to make ‘efficiency savings’
-
Forrmer Bank of England governor Mark Carney criticises mini-budget
-
Liz Truss to be interviewed about sterling crisis in first appearance in days
Filters BETA
Larry Elliott
Kwasi Kwarteng’s mini-budget has gone down badly in the financial markets. Mortgage rates have risen and the Bank of England has been forced to step in to halt a run on pension funds since the chancellor announced his policies on Friday.
The picture is complex and fast-moving, and the jargon used to explain it leaves much of the public feeling more confused. Here we examine 10 of those frequently bandied-around financial terms and concepts and explain what they actually mean.
Following Liz Truss’s comments to BBC Scotland about Scotland’s economic plans, the first minister, Nicola Sturgeon, has responded on Twitter.
Liz Truss has said she will not allow the impasse over the Northern Ireland protocol to “drift”.
The prime minister reiterated that the UK remained open to a negotiated solution with the EU but again stressed that she would act unilaterally to address issues with the trading arrangements, by way of domestic legislation at Westminster, if a deal with Brussels proved elusive.
She said there was a need to sort the problem one way or the other, as she made clear the ongoing absence of devolved government at Stormont was not sustainable.
In an interview with BBC Northern Ireland, Truss said: “We’ve always been clear that we want to resolve the issues with the Northern Ireland protocol, ideally with a negotiated settlement but we have put through the Northern Ireland protocol bill because we hadn’t been able to achieve a negotiated settlement.
“We will remain open to a negotiated settlement. But there are some fundamental principles that we have to achieve.”
She added: “We are open to a negotiated solution, but we are progressing with the Northern Ireland protocol bill as we stand, because what we can’t allow is this situation to drift.”
Liz Truss has said she wants to work with Scotland’s first minister, despite saying on the campaign trail that she should be ignored.
The prime minister said she would be keen to cooperate with Nicola Sturgeon on growing the Scottish economy and energy generation like nuclear power.
But just minutes later Sturgeon’s deputy, John Swinney, said the SNP had a longstanding aversion to nuclear power that would not be changing.
Truss told BBC Scotland: “What I want to do is work with Nicola Sturgeon to deal with our energy crisis and that’s about making sure we’re producing more homegrown energy – I’m keen to use more of the resources in the North Sea and also see more nuclear power stations built across the country, including in Scotland.
“I’m very keen to talk to Nicola Sturgeon about that because I think that will help us make sure we have long-term energy security that, alongside wind power in Scotland, we also have nuclear power in Scotland.”
When asked if she was playing into the hands of supporters of Scottish independence, the prime minister didn’t answer the question, saying instead: “I am very keen to work with Nicola Sturgeon to make sure we grow the Scottish economy.
“Scotland is a country that has fantastic entrepreneurs, fantastic exports, I believe that by improving infrastructure, by reducing taxes, we can really turbocharge the Scottish economy.”
Truss’s entreaties towards Sturgeon come after she said during a Tory hustings event as she ran for leader of the party Sturgeon was an “attention seeker” who should be ignored.
The former cabinet minister Julian Smith called on the government to “take responsibility” for the market chaos of recent days.
The Conservative MP Sir Roger Gale has called for the chancellor to “put flesh on the bones” of his economic policies as he urged that the planned November budget be held next week.
On the Treasury select committee writing to the chancellor urging him to bring his 23 November statement forward to “as early a date as possible”, Gale told Sky News: “Actually, I would prefer to see it sooner than the end of October.
“If the OBR (Office for Budget Responsibility) is going to produce its report by the 7 October, then, frankly, the sooner, the better.
“The problem we’ve got is that the markets have been destabilised because of the mini-budget, which was a broad-brush outline of what the government wanted to do with very little detail.
“The chancellor has got to put the flesh on the bones, has got to spell out his business plan, has got to indicate now very clearly how all of this largesse is going to be paid for and over what period of time.”
Labour have 33 point lead over Tories in new YouGov poll
A YouGov poll for the Times puts Labour on a 33-point lead over the Conservatives, understood to be the biggest gap recorded since the late 1990s.
Labour’s lead is fuelled by voters switching directly from the Tories, with 17% of those who backed Boris Johnson in 2019 saying they would vote Labour.
Only 37% of 2019 Conservative voters said they were planning to stick with the party.
Kwarteng criticised for refusing request to give evidence to Commons Treasury committee about mini-budget
Andrew Sparrow
Mel Stride, the Conservative chair of the Commons, has written an open letter to the chancellor, Kwasi Kwarteng. The main point of the letter is to ask Kwarteng to bring forward the publication of the medium-term fiscal plan, and the OBR’s new forecast, which are both due on 23 November. (A Treasury minister has already implied this will not happen – see 11.36am.) But some of the other points in the letter are more critical.
The fiscal impact of your growth plan significantly exceeds that of a typical budget and yet there was no OBR forecast to accompany it. It is hard to conclude other than that an absence of a forecast has in some part driven the lack of confidence in the markets. Some have formed the unfortunate impression that the government may be seeking to avoid scrutiny, possibly on account of expecting the OBR forecast to be unsupportive of the achievement of the economic outcomes the government expects from the growth plan, including 2.5% trend growth in the medium term.
There is nothing surprising about this analysis; it is what anybody trying to explain the fall in the value of sterling and the rise in government borrowing costs has been saying (with some eccentric exceptions). But few Tory MPs have been saying this out loud.
-
Stride reveals that Kwarteng is refusing to appear before the Treasury select committee to give evidence about his mini-budget. The mini-budget was described as the biggest tax announcement for 50 years, and normally a chancellor would come to the committee soon afterwards to take questions on an announcement like this. But Stride says Kwarteng has refused an invitation to appear, and wants to delay giving evidence until after he has delivered the medium-term fiscal plan in late November. Stride called this “disappointing” and said previous chancellors had not acted like this.
That’s all from me for today.
My colleague Nadeem Badshah is taking over now.
The Joseph Rowntree Foundation, the anti-poverty charity, has said it would be “morally indefensible” for the government to not uprate benefits in line with inflation (see 4.29pm) while giving tax cuts to the rich. Iain Porter, senior policy adviser at the JRF, said:
It is shocking to hear the government suggesting that they may not do what Rishi Sunak promised and uprate benefits by inflation next April as usual. This will mean yet another devastating blow to the finances of people on the lowest incomes and will cause fear for millions who have spent the past months struggling to feed their families, cook hot food and heat their homes.
Many people across the UK will agree it is morally indefensible that the prime minister would choose to give tax cuts to the richest funded on the backs of the poorest in our society. Those who will lose out if the government continues down this track include people with low earnings, families with children, carers and people who are sick or disabled.
NASUWT issues strike threat to Department of Education over pay
Richard Adams
The NASUWT has today given a formal dispute notice to the Department for Education and other employers over its demand for a 12% pay rise for teachers, with the threat of a strike ballot if that is not met.
Patrick Roach, general secretary of the NASUWT, said:
A 5% pay award for 2022-23 is an insult with inflation running in the double digits and following a decade of real-terms pay cuts to teachers’ salaries.
The failure to invest in teachers will only further undermine the recruitment and retention of teachers and the continued provision of high-quality education for children and young people.
Ministers have failed to respond to our calls for negotiations and, once again, we are calling on them to get around the table to find a solution in order to avert potential industrial action.
Responsibility for any future industrial action now rests firmly and squarely with government and employers.
The NASUWT is traditionally the more moderate of England’s two main teaching unions but this year’s annual conference revealed pent-up anger over a string of low pay rises. The National Education Union has also said it will ballot its members over industrial action unless an “inflation-plus” pay offer is made.
[ad_2]
Source link