Kwasi Kwarteng’s “mini-Budget” tomorrow will actually be the “biggest tax cutting fiscal event” in more than three decades, according to the Institute for Fiscal Studies.
The Government has stressed that the Chancellor’s announcements in the House of Commons tomorrow will not constitute a Budget.
But Paul Johnson, the director of the influential think tank, said that the fiscal event will still be “bigger than any Budget for more than 30 years” regardless of what the Government calls it.
Mr Johnson told an IFS briefing this morning: “This will actually, we think, be the biggest tax cutting fiscal event since Nigel Lawson’s Budget of 1988.
“So it may not be a Budget but in terms of tax cuts it is going to be bigger than any Budget for more than 30 years.”
Mr Kwarteng is expected to reverse the hike in National Insurance contributions and scrap a planned increase in corporation tax. There have also been reports of a potential cut to stamp duty.
Follow the latest updates below.
Interest rates move a ‘hammer blow’
Sarah Olney, the Liberal Democrat’s Treasury spokeswoman, described the 0.5 per cent hike to interest rates as a “monster rate rise”.
She said: “This a hammer blow to struggling homeowners who are being punished by the Government’s failure to control inflation.
“This monster rate rise could have been avoided if Conservative ministers bothered to take action sooner on energy bills and the rising cost of living. Instead, the Bank of England is left with no choice but to hike mortgage costs for millions.”
Bank of England hikes interest rates by 0.5 per cent
The Bank of England has raised interest rates to 2.25 per cent from 1.75 per cent – the highest level since November 2008.
The Bank has also said it now expects a 0.1 per cent fall in GDP over the current quarter, indicating that the country is already in a recession.
Tory MP: Communities being ‘bought off’ on fracking
Conservative MP Mark Fletcher said it appeared communities could be “bought off” to allow fracking under the Government’s plans.
The MP for Bolsover in Derbyshire said: “I’ve listened carefully to the Secretary of State and I have to say the local consent plans don’t seem to wash.
“It seems to come back to communities being bought off rather than having a vote. So, can the Secretary of State confirm once and for all if local residents across Bolsover, who are concerned about fracking, will get a vote to object to these schemes locally?”
Jacob Rees-Mogg replied: “I think I made it very clear that the companies will have a deep responsibility to develop packages that make the extraction of shale gas attractive to local communities. It is really important that they succeed in that.”
Minister under pressure over fracking consent
Paul Maynard, a Tory former minister, told Jacob Rees-Mogg he was “yet to hear any explanation of how local consent will be determined” when it comes to whether new fracking projects should go ahead.
He asked: “Will my constituents be asked whether they want fracking or not?”
Mr Rees-Mogg, the Business Secretary, replied: “We will be looking to have the support of local communities. That is important. And there will be a responsibility for the companies when they bring forward proposals to work out how they can get that local consent.
“It seems to me pretty clear that will involve giving money to people to encourage them because they will want to have the benefit locally whilst they are doing something that helps the country nationally.”
‘Safety of the public is not a currency in which some of us choose to speculate’
Sir Greg Knight, the Tory MP for East Yorkshire, has criticised the decision to lift the ban on fracking in England.
He told Jacob Rees-Mogg in the House of Commons: “Despite what he has said is it not the case that forecasting the occurrence of seismic events as a result of fracking remains a challenge to the experts?
“Is it not therefore creating a risk of an unknown quantity to pursue shale gas exploration at the present time?
“Is he aware the safety of the public is not a currency in which some of us choose to speculate?”
Mr Rees-Mogg, the Business Secretary, disagreed and said “it is all a matter of proportionality”.
‘We obviously want to work with local communities’
The fracking announcement has not been well-received by some Tory MPs.
Mark Menzies, the Tory MP for Fylde, told Jacob Rees-Mogg, the Business Secretary, that Liz Truss had been “crystal clear” that new fracking sites would need local consent to proceed.
He asked specifically how communities will be able to demonstrate that consent.
Mr Rees-Mogg replied: “We obviously want to work with local communities and it is really important that the companies who seek to extract shale gas come up with packages that make what they are proposing to do welcome to local communities.”
Fracking decision a ‘dangerous experiment’
Jacob Rees-Mogg, the Business Secretary, is now answering an urgent question in the House of Commons on the decision to lift the ban on fracking.
He told MPs that it is important to “use all available sources of fuel within this country” and fracking is therefore something “we need to revisit”.
Ed Miliband, the shadow climate change secretary, said the fracking move will not make any difference at all to domestic energy bills.
He told the minister: “Why doesn’t he admit the truth that anyone who knows anything about this subject says his claim that fracking will cut bills is nonsense?”
Mr Miliband labelled lifting the moratorium on fracking a “dangerous experiment”.
Median earner ‘£500 worse off this year’
Xiaowei Xu, a researcher at the Institute for Fiscal Studies think tank, said soaring inflation will mean people across the income spectrum will see a hit to their living standards this year.
“In real terms we expect the median earner to be £500 worse off than they were last year, which is around a three per cent cut in their net income,” she said.
“High earners – but not very higher earners – will be more than £1,000 worse off which is a larger increase in percentage terms. Low earners and those who are out of work will be more shielded from the rising cost of living, both in cash terms and as a share of income.”
She added: “Even after the Government is spending vast amounts of money to protect households from the rising cost of living, most households would still see their living standards fall this year compared to last year.”
‘Biggest tax cutting fiscal event since 1988’
Paul Johnson, the director of the Institute for Fiscal Studies think tank, has said tomorrow’s “mini-Budget” is actually nothing of the sort.
He told an IFS event this morning: “This will actually be, we think, be the biggest tax cutting fiscal event since Nigel Lawson’s Budget of 1988.
“So it may not be a Budget but in terms of tax cuts it is going to be bigger than any Budget for more than 30 years.”
Labour labels fracking move ‘a charter for earthquakes’
‘Treating people in rural areas like guinea pigs’
The Liberal Democrats have accused the Government of showing a “callous disregard” for the countryside after it confirmed it is lifting the ban on fracking (see the post below at 09.05).
Wera Hobhouse, the Lib Dem’s environment spokeswoman, said: “The government’s own experts have refused to say fracking is safe.
“That they choose to plough on regardless shows a callous disregard for our communities and countryside. From Surrey to Somerset, the government are treating people in rural areas like guinea pigs.”
Jacob Rees-Mogg confirms business energy support
Jacob Rees-Mogg has confirmed to MPs the Government’s plans to help businesses with rocketing energy bills (you can read the details of the plan in full here).
Mr Rees-Mogg told the Commons: “It is vital that businesses have the support they need to pay their energy bills this winter.
“His Majesty’s Government is determined to grow the economy. We cannot do that if business becomes insolvent thanks to what is tantamount to blackmail by a malevolent state actor.
“The Government announced yesterday that it will be providing a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity prices have been significantly inflated by global energy prices.”
He added: “This includes all UK businesses and covers the voluntary sector such as charities, and the public sector such as schools and hospitals.”
Jacob Rees-Mogg told off by Speaker
Sir Lindsay Hoyle has admonished Jacob Rees-Mogg, the Business Secretary, after the Government’s plans to help businesses with rising energy bills appeared in newspapers before they were announced in the House of Commons.
Labour was granted an urgent question in the Commons this morning on the help for businesses, with Mr Rees-Mogg responding.
But before the UQ started, Sir Lindsay told the House: “I have to say how disappointed I am that the subject of the UQ was extensively set out in the media yesterday before being presented to the House.”
The Commons Speaker said it is “important policies are first to be heard in this House” and he hopes it is the “last time” it will happen.
He added: “I am not angry, I am so disappointed. And I hope that we will treat the House with the respect it is due.”
Therese Coffey denies being ‘part-time’ Health Secretary
Therese Coffey is both Health Secretary and Deputy Prime Minister. She has an office in her department as well as in No 10.
Both are seemingly big jobs and there have been questions in Whitehall about how one person could do both at the same time.
ITV Good Morning Britain presenter and former Labour cabinet minister Ed Balls this morning said he had turned down a similar dual role under Gordon Brown because he wanted to focus on his then job as children’s secretary.
Asked if it was possible to do both of her jobs properly, Ms Coffey told him: “I’m conscious that in two weeks we’ve already pulled together our plan for patients and we will continue to develop that.”
She added: “I don’t think it will be a case of being part-time… we don’t have fixed working hours. We continue to do what we do right across Government in order to make sure we function effectively as a Government and I’m looking forward to being part of that.”
Liz Truss set to arrive back in UK
Liz Truss will arrive back in London this morning following her trip to the United Nation’s General Assembly in New York where she vowed that “desperate” Vladimir Putin will be defeated in Ukraine.
The Prime Minister said that the world was witnessing a “decisive moment in the history of freedom” and that 2022 was “the story of freedom fighting back”.
Her speech followed a warning from Joe Biden to the Russian President that “nuclear war cannot be won and must never be fought”.
Putin, in a televised address to the Russian people, had earlier made a clear threat to use nuclear weapons.
Ms Truss is expected to lead a debate on the Ukraine war in the House of Commons this afternoon.
What is happening with fracking?
The British Geological Survey was commissioned by the government to review the available evidence around fracking and the risk of it triggering seismic activity.
That review was submitted to ministers back in July and it has now finally been published today. However, it is not really a home run for either pro or anti-fracking groups because it essentially concludes that there is still significant uncertainty around the risks of fracking.
For example, it states “earthquake forecasting remains a scientific challenge for the geoscience community” and “the estimation of maximum magnitudes” of earthquakes before and during fracking “remains challenging”.
The Department for Business, Energy and Industrial Strategy responded to the report by saying it is “clear that we need more sites drilled in order to gather better data and improve the evidence base and we are aware that some developers are keen to assist with this process”.
The decision to lift the ban on fracking, in place since 2019, will now allow those tests to proceed. BEIS said this will help to build “understanding of UK shale gas resources and how we can safely carry out shale gas extraction in the UK where there is local support”.
Ban on fracking lifted
Jacob Rees-Mogg, the Business Secretary, said last night that the Government will push ahead to allow fracking, despite concern about earthquakes and backlash from countryside groups. (You can read the full story here).
The Department for Business, Energy and Industrial Strategy has now this morning confirmed the moratorium is being lifted on shale gas production in England.
BEIS said that amid the Ukraine war, it is “appropriate to pursue all means for increasing UK oil and gas production, including through new oil and gas licences and shale gas extraction”.
Mr Rees-Mogg said in a press release: “To get there we will need to explore all avenues available to us through solar, wind, oil and gas production – so it’s right that we’ve lifted the pause to realise any potential sources of domestic gas.
Government ‘unashamedly’ pro-growth
Kwasi Kwarteng, the Chancellor, will deliver his mini-Budget in the House of Commons tomorrow.
It is being described as “mini” but based on what we already know will be announced – reversing the National Insurance hike and scrapping a corporation tax increase – it is likely to feel a lot like a normal Budget as Liz Truss sets out her priorities and tries to deliver on her pledge to boost economic growth.
Therese Coffey, the Deputy Prime Minister, was asked this morning how the new Government will be different on the economy to the previous government.
She told BBC Breakfast: “The Prime Minister and the Chancellor are unashamedly, as is this Government, pro-growth and we will be unlocking any regulations, supporting opportunities to grow our economy. in a much more accelerated way and of course the Chancellor will be speaking tomorrow.”
Half of GP practices currently meet two week target
More than 50 per cent of GP practices already meet the Government’s new target of offering patients an appointment within two weeks, Therese Coffey has said.
(Of course, that does mean that a significant percentage are not offering all patients an appointment within a fortnight which is fairly damning.)
Ms Coffey told Times Radio: “There is a variation right across the country. Just at the moment on the latest data I have… we can see that over half of practices managed to meet this fortnight target. That is why we want to make sure that we are levelling up the expectations and supporting practices to make changes.”
Naming and shaming could see patients ditching GPs
Therese Coffey’s new “Plan for Patients” will also name and shame the GP practices with the longest waits for appointments, in a bid to drive up performance.
The Health Secretary suggested the data which will be published by the Government could prompt patients to ditch their current GP and move to a different one.
Asked whether GPs who underperformed would face sanctions, Ms Coffey told LBC Radio: “Dare I say it… one of the points about also opening up and publishing data by practice is it may give some patients the opportunity to choose to use a different GP and to make that change as well.”
‘Certainly we want more GPs’
GPs have criticised Therese Coffey’s appointments announcement, arguing that just because the Government is setting a new two-week target, that will not address the key issues of a lack of resources and high demand.
Ms Coffey told Times Radio that the Government does want to see more GPs recruited and that is part of a “longer-term plan that has already been set out”.
She said: “Certainly we want more GPs, more clinicians, that’s all part of our longer-term plan that has already been set out.
“What I’m doing at the moment is really getting focus on ABCD – the ambulances, the backlogs, the care, the doctors and dentists – but I’m very conscious that nearly everybody who accesses the NHS does that through primary care, through their GP, and that’s why I’m putting so much emphasis in what I’m going to do to try and help patients get what they expect from GPs and to help GPs deliver that as well.”
GP appointment pledge ‘includes phone calls’
Therese Coffey is today unveiling the following new pledge: GPs in England will need to offer non-urgent appointments to patients within two weeks and urgent slots the same day.
However, when the Health Secretary talks about the Government wanting GPs to “see” their patients within two weeks that does not necessarily mean in-person appointments.
The Deputy Prime Minister conceded this morning that the two-week pledge will also include telephone and video consultations.
Asked what she meant by being seen by a GP, Ms Coffey told LBC Radio: “Well, I think that is open to the relationship between the GP and the patient. I know that throughout the pandemic there has been a variety of ways that people have interacted with seeing their GP.”
Asked if it could specifically include a phone call, she said: “I am not going to be overly prescriptive. I know that some people enjoy just having a phone call but may need to go in and see the doctor. I know that other patients are very keen in that regard.”
Good morning and welcome to today’s politics live blog.
There is a busy day ahead in Westminster, with Liz Truss arriving back from her trip to the United Nations General Assembly in New York. The Prime Minister is expected to open a debate in the House of Commons this afternoon on the situation in Ukraine.
Meanwhile, Therese Coffey, the Health Secretary, is unveiling the Government’s plan to improve the NHS as Westminster also prepares for the mini-Budget tomorrow.
I will be on hand to guide you through the key developments.
Source link: Click Here