Prime Minister Liz Truss and chancellor Jeremy Hunt will hold talks at Chequers later as the government tries to salvage its economic credibility. Sunday’s meeting is the first chance for the prime minister and her new right-hand man to hold detailed discussions about the fiscal plan after weeks of market turbulence sparked by September’s mini-budget.
The imminent talks come as Andrew Bailey, the governor of the Bank of England, warned that interest rates may need to be raised higher than previously expected in order to keep UK inflation under control. Turning to his initial conversations with the new chancellor, Mr Bailey described an “immediate meeting of minds on the importance of stability and sustainability”.
In his latest statement, released on Saturday night, Mr Hunt said: “My focus is on growth underpinned by stability. I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances,” Mr Hunt added.
Will there be a “meeting of minds” between Hunt and Truss …
Providing he does the talking and she just nods her head (in shame, although I thought that Saturdays were the days to go to confessional and work ones way round the rosary beads in penitence), and that she agrees to keep her mouth, thoughts and ideas completely to herself on all matters relating to the running of the country on TV, other media, parliament and importantly in cabinet, then that’d help her become the most credible she’ll ever be.
Announcements by lunchtime and then a statement to the House of Commons will see many billions more in reversals of policy, to plug a hole in borrowing forecasts worth tens of billions.
“The chancellor will make a statement later today, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability,” a Treasury spokesman said.
Further humiliation for Liz Truss, no doubt …
Update: A written statement is expected at around 11am, and he will also address the Commons at 3.30pm
Liz Truss is back in Downing Street for another big test of her premiership
Sir John Gieve, a former deputy governor for fiscal stability at the Bank of England, says the new Chancellor Jeremy Hunt will have looked at forecasts and seen that the hole in public finances has got worse, and is bigger than people realise. Gieve says that leaks from the Treasury showed the fiscal gap was nearing £70bn. He says today could be “a reset moment” where Hunt could step back and start from first principles and scrap everything except for the energy price cap guarantee and national insurance changes.
I think it would be a mistake for Labour to seek an early Election, things are going to get considerably worse and better to let the Tories take the blame for everything.
Chancellor Jeremy Hunt is giving an emergency statement on the mini-budget in an effort to reassure financial markets
The chancellor is reversing almost all tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation, he has just said in a video statement. The reason he is announcing these measures is to provide confidence and stability but he will provide more details in the Commons later, Hunt said.
“We will continue with the abolition of health and social care levy and the stamp duty changes,” he said. “We will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.”
The health and social care levy was to be funded by a rise in National Insurance payments of 1.25%. The government already scrapped that tax rise and it looks like one major part of the mini-budget being retained.
The chancellor has scrapped plans to cut the basic rate of income tax from 20p in the pound to 19p from April next year. He says it is not right to borrow to fund this tax cut. The rate will remain indefinitely at 20p until economic circumstances allow it to be cut, he says. The measure was announced by former chancellor Kwasi Kwarteng in September’s mini-budget - he said it would benefit more than 31 million people.
Chancellor Jeremy Hunt says no government can control the markets but it can give certainty about public finances. He says the plans he is announcing will avoid uncertainty ahead of the full fiscal plan announcement at the end of the month. It will deliver confidence and stability, he adds.
Jeremy Hunt says a Treasury-led review will take place into how people are helped with energy bills from April next year. The objective is to design a new approach to save taxpayers money while targeting support to those most in need, he says. Business support will also go to those most affected and will incentivise energy efficiency.
Total humiliation for Truss …
What has the chancellor announced?
Plenty to digest from the Chancellor’s surprise economic announcement. Here’s a quick recap of the key points Jeremy Hunt made in his televised address:
What stays:
Cuts to stamp duty and National Insurance remain in place
What goes:
Planned 1p cut in basic rate of income tax put on hold indefinitely
Energy price guarantee will no longer last two years - it will last until April next year
Treasury-led review of energy support after April 2023 launched
Dividend tax cut will be abolished
VAT-free shopping, alcohol duty freeze and 2021 reforms to the off-payroll working rules - also known as IR35 rule changes
What next:
Hunt vowed there will be more difficult decisions on tax and spend, and that there would have to be cuts
The chancellor will give a statement to the House of Commons later today and will answer questions from MPs
Starmer seeks to get Truss to face questions from MPs with urgent question on sacking of Kwasi Kwarteng
The Speaker, Sir Lindsay Hoyle, has granted a Commons urgent question to Labour about the sacking of Kwasi Kwarteng. Keir Starmer has tabled the question, and he wants Liz Truss to attend in person to answer.
The UQ will come at 3.30pm. Starmer will be speaking, regardless of who is responding for the government.
Jeremy Hunt will deliver his statement afterwards, at around 4.30pm.
JM gave us the same old, same old. As rachel Reeves pointed out, the end result of the mini-budget is that the rich have got richer and the the poor have got poorer. Give the (current) chancellor’s dire predictions, there is no prospect of the poor becoming richer for the foreseeable future.
Jeremy Hunt says the government will have to take decisions of “eye-watering difficulty” but any spending cuts or tax increases will be decided in accordance with “core compassionate conservative values” (1).
(1) I’ve never heard of them but then I’d never heard of “fiscal responsibility” until Kwazi Kwarteng was explaining why he was borrowing £70bn to pay for tax-cuts which the taxpayer would have to pay for …
I have been watching BBC in Parliament - What a coward Truss is - she sent Penny Mordaunt in to take the initial flak for the failed Trussonomic policies and Truss waited until Jeremy Hunt arrived before “taking her place” in Parliament, where she left Hunt to take all the flak from the opposition, while she sat there smirking and occasionally rolling her eyes.
I’m still watching Hunt heroically and determinedly fielding all the challenges and comments, yet it seems that Truss has disappeared again - She didn’t say a word while she was sitting there and I didn’t see her leave the Chamber but, after her cowardly retreat at her last Announcement and Press Conference, I am not surprised to see she has left Hunt on his own in the HoC to answer questions and carry the can for her own catastrophic blunders, just as she left Mordaunt to carry the can before Hunt arrived to take over.
I always knew she would be a bad PM but I never realised just how bad she would be. What a Coward.
The sooner she is got rid of, the better.
Given LT’s “lacklustre” appearance today, she may well have only days left in post. Hunt gave an assured performance and Mordaunt’s audition went well - they could easily assume “interim” duties if Truss were to resign.
Penny Mordaunt and Jeremy Hunt did well but glaringly obvious was the absence of the Prime Minister the clue is in the title “Prime” meaning first. Surely, the meeting she attended could have been rescheduled to even later in the day; it was after all with a member of her own with “camp” Sir Graham Brady, chairman of the 1922 Committee of backbench Tory MPs. I believe she is now being “titled” “the lady who did not turn up” Those who voted her in need to be named and shamed I wonder what they think now. If the Queen had not died when she did and then the funeral national mourning it makes you wonder how deep a hole she could have dug.
We are controlled by the International Money Markets in the same way that each of us has a Credit Rating which how much we borrow, our spending limit, and the amount of interest we pay.
That is how the system works,
The IMF is a lender of last resort, and they do put strict conditions on the money they lend.
It is not an International Conspiracy, it is merely others deciding not to lend us any more money.
It is when they tell us who should be running the country and how to arrange its finances Swim.
When Liz Truss took over the PM’ship she must have thought that as a leader of the country she would have the power to do things her way. All the people who voted her in also thought that, how wrong they were. Boris went against the in crowd and was dismissed due to the constant harassment by the media, instigated by persons unknown who are the real leaders of the global one world government.
