Chancellor Kwasi Kwarteng says mini-budget will favour people ‘across the income scale’
The pound plunged by nearly five per cent to an all-time low as investors ran for the exits after the new government’s fiscal plan threatened to stretch Britain’s finances to the limit.
The currency tumbled to an unprecedented $1.0327, extending a 3.61 per cent dive from Friday when finance minister Kwasi Kwarteng unleashed historic tax cuts.
Economists have raised concerns over the financial credibility of prime minister Liz Truss’s government as the unveiling of such a plan came just a day after the Bank of England hiked interest rates to contain inflation.
Meanwhile, Sir Keir Starmer said he will resist pressure from within his own party to reverse Ms Truss’s 1p cut for basic-rate taxpayers because of fears it could deal a fatal blow to Labour’s chances of victory at the coming election.
The Labour leader dramatically pledged to reinstate the 45p income tax rate for Britain’s wealthiest people, abolished by Mr Kwarteng in his mini-Budget in what Sir Keir described as a “wrong-headed” Tory policy to “allow the rich to get richer”.
Truss and Kwarteng ‘behaving like two gamblers in a casino chasing a losing run’
Shadow chancellor Rachel Reeves has accused Kwasi Kwarteng and Liz Truss of recklessly gambling with the UK’s finances.
One of the chancellor’s allies told The Times the drop in the pound’s worth is “City boys playing fast and loose with the economy”.
The Labour MP told Times Radio: “Instead of blaming everybody else, the chancellor and the prime minister, instead of behaving like two gamblers in a casino chasing a losing run, they should be mindful of the reaction not just on the financial markets but also of the public.
“The idea trickle-down economics – making those at the top richer still – will somehow filter through to everybody else has been tried before, it didn’t work then, it won’t work now.
“So, financial markets are unimpressed, the British public are unimpressed and the chancellor and the prime minister need to take note because they’re not gambling with their own money, they’re gambling with all our money, and it’s reckless and it’s irresponsible as well as being grossly unfair.”
Emily Atkinson26 September 2022 08:08
Government ‘absolutely focused’ on growth package despite pound plunge
The government remains focused on delivering its growth package despite the fall in the pound, a minister has said.
Asked by Sky News about the slide, Work and Pensions secretary Chloe Smith said: “I am not going to be able to comment on particular market movements and there are various factors that always go into those.
“But the government is absolutely focused on delivering the growth package as we set out, with various ways that we will be helping both businesses and households to move ahead to growth, and, as I say, to greater opportunity.
“For me in particular in the Work and Pensions department, I want to then be able to help more people into more good and well-paid jobs.”
Asked about the poor polling the Tories were facing, Ms Smith added: “I have every confidence that the kind of support that the Conservatives were delighted to have in 2019 will continue to follow Liz Truss and be able to have a Conservative government in the years to come.”
Emily Atkinson26 September 2022 07:58
‘Selling-off’ of pound to hit public services ‘already on their knees’, says shadow chancellor
Shadow chancellor Rachel Reeves said she is “incredibly worried” about the sell-off in the pound as she blamed chancellor Kwasi Kwarteng’s tax and spending plans.
The Labour MP told Times Radio: “I started my career as an economist at the Bank of England and, like everybody else, I’m incredibly worried about what we’ve seen both on Friday with market reactions to the chancellor’s so-called mini-budget and to the reaction overnight.”
She warned that the fall in the pound’s value will raise the cost of government debt, meaning “more and more of government spending will go on servicing the debt rather than going on public services, which are on their knees right now”.
Ms Reeves said: “The pound is now at an all-time low against the dollar and that is not the same for other currencies, including the euro. So, there’s something going on in the UK and it’s not just dollar strength. There’s a selling-off of the pound and that was on the basis of the chancellor’s so-called mini-budget on Friday.”
Emily Atkinson26 September 2022 07:47
Sterling falls due to ‘loss of confidence in government’, says John McDonnell
Former shadow chancellor John McDonnell said sterling has fallen to be almost at parity with the dollar because of a loss of confidence in the government.
The Labour MP for Hayes and Harlington, who was shadow chancellor under Jeremy Corbyn, told BBC Radio 4’s Today programme: “It’s because internationally people have – not just us – lost confidence in this government and the mini budget, I think, came as a shock to everybody … not just because it was so unfair, because it was unstable and didn’t give a way through for the economy.”
Emily Atkinson26 September 2022 07:37
Online searches for ‘food bank near me’ soar by 250%, Labour finds
Online interest in food bank services has risen by 250 per cent amid the cost of living squeeze, a Labour party analysis of search trends shows.
Ahead of his conference party speech, shadow work and pensions secretary Jonathan Ashworth conducted an analysis of Google trends data which shows searches for “food bank near me” have increased by 250 per cent compared with the first week of March 2020.
The research also shows searches for “energy bill help” have reached their highest level in at least the last five years.
Meanwhile, searches for “apply for universal credit” have increased by more than 50 per cent compared with pre-pandemic.
And searches for “universal credit advance payment” have more than doubled compared with pre-pandemic.
Emily Atkinson26 September 2022 07:27
Schools ‘on knife edge’ with finances prompting campaign to fund books and pencils
Headteachers have warned that schools are “on a knife edge” due to strained budgets, forcing them to launch a campaign to fund the basics such as books and pencils.
Schools are having to cut back on staff, trips and courses as soaring energy bills and unfunded pay rises eat up budgets.
Stretched finances were having a “real, genuine negative impact” on the quality of education, one primary school leader in the West Midlands said.
Schools ‘on knife edge’ with calls for donations to fund books and pencils
Stretched budgets are ‘genuine negative impact’ on quality of education, headteacher says
Emily Atkinson26 September 2022 07:16
ICYMI: Sadiq Khan announces free travel for thousands of lowest paid transport workers
Thousands of the lowest paid transport workers are to travel for free across London to help with the cost of living crisis after an intervention by the Labour mayor Sadiq Khan.
The move is designed to aid those who keep Londoners on the move. Around 5,000 transport workers not previously eligible for free travel will benefit, including cleaning, catering and security staff, with the costs shouldered by City Hall.
The cost of living has soared in recent months, with the latest figures showing inflation running at almost 10 per cent.
The government has stepped in to help households cope with skyrocketing energy costs, but say the average home’s bills will still amount to £2,500 a year, a massive hike for many.
Sadiq Khan announces free travel for thousands of lowest paid transport workers
Thousands of the lowest paid transport workers are to travel for free across London to help with cost of living crisis after an intervention by the Labour mayor Sadiq Khan.
Namita Singh26 September 2022 07:05
‘A matter for the Bank of England’: Liz Truss refuses to discuss if UK in recession
Liz Truss has refused to discuss fears that the UK is already in recession, insisting the downturn in the economy is “a matter for the Bank of England”.
The Bank issued the warning last week – as it hiked interest rates to 2.25 per cent, their highest level for 14 years – but the prime minister argued it was not her responsibility.
The comment came as the chancellor, Kwasi Kwarteng, claimed he could not comment on “market movements” following the plunge in the pound after Friday’s tax-slashing Budget.
Speaking to CNN in the United States, Ms Truss also dismissed suggestions of a referendum on Irish reunification now that Catholics outnumbered Protestants in Northern Ireland.
‘A matter for the Bank of England’: Liz Truss won’t discuss if UK is in recession
Chancellor Kwasi Kwarteng also claims he can’t comment on ‘market movements’ following pound’s plunge
Namita Singh26 September 2022 06:54
Ex-England star Neville due at conference as Labour sets out investment plan
A Labour government would create a state-owned investment fund to back projects which could generate wealth for the nation.
Shadow chancellor Rachel Reeves will use her speech at the party’s conference in Liverpool to set out the plan, which would begin with an initial £8.3 billion investment to fund green industries.
Ms Reeves has the main speech at the gathering on Monday, but party leader Sir Keir Starmer will also appear at the conference alongside former England footballer Gary Neville.
Read the details in this report:
Ex-England star Neville due at conference as Labour sets out investment plan
Shadow chancellor Rachel Reeves has the main speech but Gary Neville will be the star attraction at the Liverpool conference.
Namita Singh26 September 2022 06:44
Labour in line for a big majority while Johnson could lose his seat, poll suggests
Sir Keir Starmer could secure a comfortable 56-seat majority for Labour and unseat Boris Johnson at the next general election, according to a new poll released on the first day of the party’s annual conference in Liverpool.
The Savanta ComRes survey of more than 6,000 voters put Labour a clear 12 points ahead of the Conservatives, on 45 per cent, with Liz Truss’s party on 33 per cent.
It suggests that there has been no “Truss bounce” for the Tories following the election of their new leader at the start of September, with the Conservative Party down two points and Labour up three compared with the previous month.
And constituency-by-constituency analysis of the results showed that the Tories could shed a massive 146 MPs, including many in key red-wall seats won by Mr Johnson in 2019.
Our political editor Andrew Woodcock has more:
Labour in line for big majority and Boris Johnson could lose his seat, poll suggests
Liz Truss could lose 146 Tory MPs as Labour retakes swathes of the red wall, according to survey
Namita Singh26 September 2022 06:34