Category Archives: Economic policy

Labour criticises chancellor’s trip to US for ‘chinwag’

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Nadhim Zahawi to go on fact-finding trip to discuss measures on energy costs in what are likely to be his last days in post

Nadhim Zahawi will spend what are likely to be his final few days as chancellor in the US on a fact-finding trip to discuss measures to tackle soaring energy costs.

Zahawi, who took over as chancellor eight weeks ago and is likely to be replaced if, as widely expected, Liz Truss is unveiled as the next Conservative leader, will also discuss the Ukraine war and cooperation on financial services.

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Rising energy costs ‘will force thousands of corner shops to close’

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Association of Convenience Stores urges chancellor to provide more financial support for small shops

Thousands of corner shops will be forced to close due to surging energy costs unless the government steps in with emergency support, a trade body has said.

The Association of Convenience Stores (ACS) has written to the chancellor, Nadhim Zahawi, saying that without financial support its members will be driven out of business. “We will see villages, housing estates, neighbourhoods and high streets lose their small shops,” the letter says.

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Economic watchdog confirms it could scrutinise Truss’s cost of living plans

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MPs say it is vital tax and spending measures proposed by potential new prime minister are examined by OBR

Liz Truss has been challenged to open up her prospective emergency tax cuts and spending plans to scrutiny if she becomes prime minister and makes immediate moves to tackle the cost of living crisis.

The Office for Budget Responsibility (OBR), which produces independent forecasts based on major fiscal announcements by the government, revealed preparatory work had been under way for about a month to publish fresh economic forecasts in September.

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Economists demand urgent action on energy bills to avert ‘catastrophe’

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Millions of vulnerable people will be harmed without radical policies to ease cost of living crisis, say experts

Physical and financial harm will be caused to millions of vulnerable families unless the government takes action to avert a winter catastrophe by cutting energy bills, leading economists have warned.

In the run-up to the announcement of the new energy price cap tomorrow the Resolution Foundation thinktank said radical policies such as price freezes, solidarity taxes or lower social tariffs were needed to prevent the cost of living crisis worsening.

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Next PM could face £23bn autumn spend to cover £900 rise in energy bills

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Energy prices have soared above prediction and subsidies will require significant further spending

Ministers could face an additional £23bn price tag for covering extra household energy costs of £900 this autumn, rising to £90bn next year, a new paper by the Institute for Government has found.

The paper, looking at the options for Liz Truss or Rishi Sunak in No 10, also warned the government should plan for prolonged rises in energy bills by going a lot further in making public appeals to use less gas – for example by informing consumers about the cost savings from turning down thermostats – and in committing to building more energy efficient homes to help protect consumers.

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Minimum wage should be increased to £15 an hour as soon as possible, says TUC

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Move opens new policy gap between unions and Labour party, which is reluctant to commit to specific figure under Keir Starmer

The minimum wage should be increased to £15 an hour as soon as possible to help millions of low-paid workers struggling amid the cost of living crisis, the TUC has said.

In a move that opens a fresh policy gap between unions and Keir Starmer’s Labour party, the TUC has thrown its weight behind calls for a more ambitious legal floor on pay rates. The union body said the government needed to draw up plans to get wages rising as workers suffer the biggest hit to living standards on record.

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Tory leadership hustings – Birmingham: Liz Truss confirms she will allow new grammar schools – as it happened

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This live blog is now closed. You can read our latest story on the leadership contest here:

The cross-party Commons Treasury committee has expressed concerns about reports that Liz Truss, the frontrunner in the Tory leadership contest, may hold an emergency budget in September without asking the Office for Budget Responsibility to update its fiscal and economic forecast.

The OBR usually publishes a new forecast alongside a budget, and it provides an independent assessment of what impact the budget measures will have. The system was put in place by George Osborne to discourage the Treasury from making dubious claims about what its tax and spending announcements might be able to achieve.

OBR forecasts provide transparency and reassurance to the markets on the health of the nation’s finances. As a committee, we expect the Treasury to be supporting and enabling the OBR to publish an independent forecast at the time of any significant fiscal event, especially where, unlike other recent fiscal interventions, this might include significant permanent tax cuts.

Whether such an event is actually called a budget or not is immaterial. The reassurance of independent forecasting is vital in these economically turbulent times. To bring in significant tax cuts without a forecast would be ill advised. It is effectively ‘flying blind’.

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Labour sets out plan to link minimum wage to cost of living

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Exclusive: Earnings of lowest paid could rise by £832; lower rates for 18- to 22-year-olds to be scrapped

Labour has drawn up plans to put hundreds of pounds into the pockets of the lowest paid by instructing the Low Pay Commission to factor in living costs when it sets the minimum wage.

They also want to scrap the lower pay categories for workers aged between 18 and 22, so they would all be paid at the higher rate.

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Labour to push energy price cap policy in campaign blitz

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Party aims to get out message on plan to tackle cost of living before new Conservative PM enters No 10

Labour is planning a campaigning blitz in order to take ownership of its new energy price cap policy in case the next Tory leader bows to pressure and cancels the 80% rise expected in October.

Keir Starmer has vowed that his party “wouldn’t let people pay a penny more” on their gas and electricity bills this winter, proposing freezing the price cap at current levels and preventing the average household bill from reaching £3,600.

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Tory leadership: Sunak frustrated government attempts to realise benefits of Brexit, Truss allies claim – UK politics live

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Latest updates: foreign secretary’s supporters accuse former chancellor of resisting changes to EU regulation as sixth hustings looms

Gordon Brown, the former Labour prime minister, has used an article in today’s Guardian to propose that the government should halt the increases in the energy price cap planned for later this year and next year and, if necessary, take energy companies into public ownership to ensure that they keep prices down.

Alongside the Lib Dem plan, with which it has some similarities (they also want a price cap freeze, and more money raised through a windfall tax), it is the most radical and ambitious proposal on the table to tackle the energy bills crisis.

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Sunak accuses Truss of major U-turn after she says she will do ‘all I can to help struggling households’ with fuel bills – UK politics live

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Tory leadership contender says rival had previously dismissed direct support as ‘handouts’

Suella Braverman, the attorney general, is giving a speech to the Policy Exchange thinktank on equalities and rights. There is a live feed here.

In a preview of the speech published in the Daily Telegraph, Braverman says she wants to clarify the law on trans rights as it applies in schools. She says:

When it comes to gender-questioning children, we should always have compassion. At the same time, our compassion should never blind us to the harm it is possible to do to children by misplaced affirmation. Many schools and teachers believe – incorrectly – that they are under an absolute legal obligation to treat children who are gender questioning according to the preference of the child. Many are scared of the consequences of not doing so.

I want to make it clear that it is possible, within the law, for schools to refuse to use the preferred opposite-sex pronouns of a child.

The UK and partners have condemned in the strongest terms China’s escalation in the region around Taiwan, as seen through our recent G7 statement.

I instructed officials to summon the Chinese ambassador to explain his country’s actions.

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Truss and Sunak accused of ‘living in parallel universe’ on bills crisis – UK politics live

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Latest updates: Lib Dem leader says Tory leadership hopefuls have no plan to help millions of families struggling with price rises

The Joseph Rowntree Foundation, a leading poverty charity, says, in the light of the latest forecast about how energy bills will rise (see 10.54am), the government needs to at least double the help already provided to help people through the cost of living crisis. This is from Peter Matejic, its chief analyst.

The latest projections of annual energy bills exceeding £4,200 from January is the latest in a series of terrifying warnings over the past week, from the Bank of England and others. Families on low incomes cannot afford these eye watering sums and as a nation we can’t afford to ignore an impending disaster.

Both candidates to be prime minister must now recognise the extraordinarily fast-changing situation and act to protect the hardest hit from the coming emergency.

Unite said the 4% increase for staff in middle pay bands announced by the government last month is a “massive pay cut” because of soaring inflation.

The union will now consult with its 100,000 health members across the NHS in both England and Wales on whether they accept the “imposed deal” or want to challenge it through industrial action, which could mean strikes this winter.

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Ed Davey calls for halt to energy price cap increase to avoid ‘catastrophe’

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Exclusive: Lib Dem leader says new PM should let government pay £36bn cost in new ‘energy furlough scheme’

Liz Truss or Rishi Sunak should cancel the £1,400 energy price cap increase in October in a new “energy furlough scheme” and government should absorb the £36bn cost of the hike, the leader of the Liberal Democrats has said.

Ed Davey said neither candidate appeared to have any policies that grasped the magnitude of what could happen this autumn. “We are facing a catastrophe this winter, a drop in living standards unlike anything we have seen in my lifetime,” he said.

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‘Zombie government’: more than half of departments delay key decisions

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As an economic crisis looms in the UK, legislation shelved and deadlines missed on energy, online safety and gambling laws

Mining along the west coast of Cumbria goes back to at least the 1600s, and this summer the local community awaited a crucial government decision on whether a new deep coalmine operation would be given the go-ahead.

While proponents of the £165m deep coalmine near Whitehaven say it would create jobs and help power the UK’s steel industry, environmental campaigners say it would undermine the government’s commitment to meeting climate targets.

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Private school polish and big dreams: how Rishi Sunak became a contender for PM

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Tory leadership candidate is praised as an earnest workaholic, but critics say politically he has a glass jaw and is naive

“Let me tell you a story,” Rishi Sunak says in his soft-voiced campaign launch video, highlighting his status as the grandson of hard-grafting Indian immigrants.

If he wins the race for No 10, the 42-year-old would be the first person of colour to be the UK prime minister, and the first practising Hindu, in a historic break with the past. Yet, in other ways, his story is as establishment as it comes: private school, PPE at Oxford, the City, the Tory party.

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Truss ‘irresponsible’ for threatening to review Bank of England remit

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Labour’s Rachel Reeves says Conservatives are ‘playing blame game’ for UK’s economic problems

Liz Truss has been accused of being “deeply irresponsible” for threatening to tinker with the Bank of England’s mandate on the brink of a recession.

The shadow chancellor, Rachel Reeves, attacked the Tory leadership frontrunner after Truss and her allies repeatedly questioned the performance of the Bank’s governor, Andrew Bailey, and said she would review the institution’s remit.

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Australia’s official interest rates expected to rise by half-percentage point, economists say

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Experts predict RBA will lift cash rate from to 1.85%, marking a 175-basis point increase since May

Australia’s official interest rates are all but certain to be lifted on Tuesday with the expected half-percentage point increase marking the Reserve Bank’s sharpest tightening phase since 1994.

A survey by Bloomberg News found 28 of 30 respondents predict the RBA board will lift the cash rate from 1.35% to 1.85% at its monthly meeting. That move would mark a 175-basis point increase in the rate since it began hiking in May.

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Guardian Essential poll: 40% of voters say Labor doing poor job tackling surging cost of living

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Half of voters surveyed say they can afford household bills but struggle to find anything extra or report feeling under financial pressure

Just one-quarter of voters think Labor is doing a good job of handling surging cost of living pressures, the latest Guardian Essential poll suggests, while a majority of respondents believe the Albanese government can influence the direction of inflation and interest rates.

The results from the latest survey of 1,082 respondents comes ahead of Wednesday’s inflation data which is expected to show consumer prices are running at their highest level since the 1990s.

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Tory leadership: Liz Truss and Rishi Sunak clash in heated BBC debate – as it happened

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Latest updates: final two candidates exchange blows over plans for cost of living, levelling up and China

Starmer says Labour’s approach to levelling up will be based on a practical plan, unlike the government’s.

And he says he was impressed by the approach of Olaf Scholz, the German chancellor, whom he met in Berlin recently. Starmer suggests Britain could learn from the way new battery factories are located in poor regions in Germany.

There will be no magic money tree economics with us.

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Rishi Sunak says he is underdog in PM race as ‘forces that be’ want Truss

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Former chancellor suggests Tory party powers hope leadership contest will be ‘a coronation’ for his rival

Rishi Sunak has positioned himself as the underdog in the Conservative leadership race, claiming the “forces that be” want Liz Truss to be the next prime minister.

Addressing a crowd in Grantham on Saturday, the Lincolnshire home town of Margaret Thatcher, Sunak declared “have no doubt, I am the underdog” and suggested that Conservative party powers want the race to be “a coronation” for Truss.

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