Speculation that reversal on leadership campaign pledge risks split with her chancellor, Kwasi Kwarteng
Liz Truss has bowed to intense pressure from Conservative MPs and the markets by agreeing to redraw her mini-budget, paving the way for a major U-turn on her signature corporation tax cut.
In another serious blow to her authority as prime minister, government sources told the Guardian that a climbdown on the plan to scrap the rise in corporation tax was now “on the table”.
Continue reading...Eritrean woman, 28, in acute distress having spent most of her life in search of safety
A heavily pregnant rape survivor from Eritrea has been threatened with forced removal to Rwanda by the Home Office.
Human rights campaigners say it is the “most egregious” case they have come across so far in the government’s scheme to outsource the processing of UK asylum claims to the east African country.
Continue reading...Corporation tax plans likely to be latest to be dropped – bad news for Kwarteng’s credibility, but good for his balance sheet
Liz Truss is on the verge of reversing one of the last major pillars of her chancellor’s disastrous September mini-budget.
While Kwasi Kwarteng mingles with finance ministers at the International Monetary Fund gathering in Washington DC, discussions are taking place in London that would see the promise to freeze corporation tax rates binned. There is also speculation about dropping smaller measures including a more generous tax treatment of share dividends. These U-turns would come hard on the heels of the humiliating climbdown on Kwarteng’s promise to scrap the 45p top rate of tax.
Continue reading...Reversing key plank of her leadership pitch would be much bigger humiliation for Liz Truss than 45p rate U-turn
The clamour among Conservative MPs for a third U-turn by Liz Truss started the same as the others: one MP begins as an outrider, backed by some party veterans or ex-cabinet ministers, and the question catches alight across broadcasters who ask every MP they see. Soon enough, it is received wisdom.
Most MPs who are squeamish about deposing their third prime minister had hoped that they would see change in the markets and contrition from No 10 and 11 after the U-turn on the 45p rate. Over the course of the past week, it has been clear to them that will not happen.
Continue reading...Woman, said to have been trafficked, is only adult allowed back since end of Islamic State ground war
A British woman and her child have been repatriated from a Syrian camp, the first time an adult has been allowed to come back to the UK from detention since the end of the ground war against Islamic State.
The Foreign Office said that British policy to those held in Syria remained unchanged, and that it considered requests for help on “a case by case basis”, but campaigners said it was a significant first step.
Continue reading...Experts take a forensic look at the PM’s promise to axe to up to 2,400 laws on British statute books
Liz Truss has promised to “consign to history” all EU red tape within the next year, axing to up to 2,400 laws on British statute books.
It was not just party conference rhetoric. Her government is planning to pass legislation to give itself the power to simply switch off 40 years of EU harmonisation legislation at the stroke of midnight 31 December 2023. No list of laws targeted has been published.
Continue reading...PM wants to prevent panels on 58% of farmland but business secretary says renewables need to be boosted
Liz Truss is facing a rebellion from Jacob Rees-Mogg’s business department over plans to ban solar power from most of England’s farmland.
The prime minister and her environment secretary, Ranil Jayawardena, want to ban solar from about 41% of the land area of England, or about 58% of agricultural land, the Guardian revealed earlier this week.
Continue reading...State school pupils twice as likely to feel they have fallen behind than peers in private schools, landmark study finds
Four out of five teenagers say their academic progress has suffered as a result of the pandemic, with state school pupils twice as likely to feel they have fallen behind than their peers in private schools, according to initial findings from a landmark study.
Half of the 16- and 17-year-olds questioned said the Covid disruption had left them less motivated to study, while 45% felt they have not been able to catch up with lost learning.
There was a lot of chaos in my life at the time and then we went into lockdown quite unprepared. There was a lot of confusion about schooling. I didn’t really have access to technology. I didn’t have online lessons, things like that. There was work that went on every week, but I couldn’t access it because I didn’t have the internet. I remember talking to one of my friends and they were like, ‘Oh have you seen the work that’s been put for English’, and I was like, ‘We have work?’
It was only in the September when we came back I finally got more support. I got a laptop and I got better access. A lot of people in my school had issues like me. A lot of people didn’t have technology or they didn’t have structured lessons, so we’ve had a lot to try to catch up on. A lot of the lessons have been quite content-heavy because it felt like we were trying to do two years in one, so that was quite stressful. And I felt like I had to work harder to do my GCSEs. I felt I had to do more to recover to my peers’ level.
Continue reading...Below-inflation rise would save exchequer tenth of £40bn to be given out through tax cuts, says thinktank
If the government raises benefits in line with earnings rather than inflation next year, it would drastically cut the incomes of poorer working-age families, while saving less than a tenth of the cost of recent tax cuts, a leading economic thinktank has calculated.
Such a change, which would mean a significant real-terms cut given that wages are rising at 5.5% with inflation close to 10%, could see the effective income of some families reduced by up to £1,000 a year, the Resolution Foundation said.
Continue reading...Settlement was down from £41.7bn, reflecting payments already made to cover UK obligations
The UK’s Brexit “divorce bill” stood at €41.8bn (£36.7bn) in 2021, according to the EU’s official auditors.
The European court of auditors’ annual report revealed that the UK was expected to make €10.9bn in payments to the EU during 2022.
Continue reading...Statement from No 10 comes straight after PM told MPs she was ‘absolutely’ committed to avoiding public spending cuts
Sajid Javid, the former Tory chancellor, has been speaking at an event organised by the Legatum Institute thinktank this morning. As Chris Smyth from the Times reports, Javid said the turmoil in the markets was caused by the fact that the tax cuts in the mini-budget went “way beyond” what Liz Truss promised during the leadership campaign, and by the fact that her energy bills bailout was also much bigger than expected.
The government has drawn up a plan to cap the unit cost of gas and electricity for two years. Labour proposed its own plan to freeze energy bills, but it only proposed a commitment for six months.
Continue reading...All four nations would have interest in referendum so Westminster has authority, UK government lawyer tells supreme court
Judges sitting in the UK’s highest court have been told Westminster is the ultimate authority on Scotland’s future because Scottish independence is of “critical importance” to the future of the UK.
Sir James Eadie KC, a senior lawyer acting for the UK government, said the union between Scotland and England was “the constitutional foundation of the modern British state”, and mattered to everyone in the UK.
Continue reading...PM suggests borrowing will rise as she surprises MPs by saying she has no plans to cut public spending
Liz Truss has said the Conservatives will push ahead with tax cuts without cutting public spending, instead allowing borrowing to rise over the next few years.
Senior economists had warned on Wednesday that such a strategy, if set out by Kwasi Kwarteng in the chancellor’s fiscal plan at the end of this month, would be likely to spook investors, creating renewed market turmoil.
Continue reading...Research from the Joseph Rowntree Foundation shows impact of increasing benefits in line with earnings, not inflation
At least one in five working-age families in most UK constituencies – including in Liz Truss’s seat – would lose out by hundreds of pounds on average if real-terms benefit cuts go ahead, a study has found.
The scale of the impact of a below-inflation rise on already struggling households and by extension, local shops and businesses, is revealed in a study by the Joseph Rowntree Foundation (JRF). It would amount to the biggest-ever real terms cut to benefits in a single year.
Continue reading...Commons committee warns there are still shortages of staff to deal with UK’s new status as a third country
UK regulators are struggling to cope with the post-Brexit trading environment because of “poor preparation and planning”, a House of Commons committee investigation has found.
Almost two years after the UK quit the EU, there are still shortages of vets, toxicologists, lawyers and economists to deal with the UK’s new status as a “third country”, found the public accounts committee report, Regulating After EU Exit.
Continue reading...Prime minister accused of ‘another screeching U-turn’ having previously rejected calls to impose levy
Renewable power companies will have their revenues capped in England and Wales, after the government bowed to pressure to clamp down on runaway profits.
The announcement late on Tuesday night provoked immediate accusations that Downing Street had performed “another screeching U-turn” – having previously rejected calls to impose a windfall tax on power giants.
Continue reading...Pensions hedging crisis shows how the City never seems equipped to handle the next big financial hazard
Pension funds have found themselves embroiled in a byzantine world of exotic financial trading that many of them appear to have badly misunderstood.
On Tuesday, a third rescue mission in little more than a fortnight was announced by the Bank of England, which is reprising its role in the 2008 financial crisis as the City’s lifeboat.
Continue reading...Sterling falls more than a cent to below $1.10 after Andrew Bailey tells pension firms they have ‘got to get this done’
The pound has fallen sharply against the dollar after Andrew Bailey warned the Bank of England would not extend its emergency intervention in financial markets beyond this week, after the turmoil sparked by the government’s mini-budget.
Sterling skidded by more than a cent against the dollar to below $1.10 after the Bank’s governor insisted the £65bn scheme to purchase UK government bonds would not be continued beyond the deadline on Friday.
Continue reading...Latest updates: Labour leader hoping to put party on war footing ahead of next election
In the supreme court Dorothy Bain KC, the lord advocate, the Scottish government’s most senior law officer, is now setting out her case.
Here is the 50-page submission to the court setting our her case that was released in July.
Despite the political context of this reference, the questions the court has to decide are limited to technical questions of law. The court will decide them by applying legal principles.
The court will require time after the hearing to prepare its judgement. The hearing is the tip of the iceberg. We also have more than 8000 pages of written material to consider.
Therefore, as usual, is likely to be some months before we get our judgement.
Continue reading...Restructuring includes departure of Sam White, as party leader seeks to capitalise on slump in Tory support
Keir Starmer has announced a major shake-up of his political team, including the departure of his chief of staff, Sam White, saying Labour was being put on an immediate election footing.
Boosted by turmoil in the Conservative party and a string of hefty leads in opinion polls, Starmer said the party needed to move into the next phase of election readiness.
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