Category Archives: Economic policy

Tory leadership race: Rishi Sunak calls himself ‘common sense’ Thatcherite – as it happened

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Former chancellor says UK ‘needs to control borders’ and again references Margaret Thatcher

In an interview with GB News, Liz Truss was asked if she would keep the expensive wallpaper in the Downing Street flat, installed as part of Boris Johnson’s controversial refurbishment, if she became PM. In what is being seen by some as a dig at Johnson, she replied:

I’m not going to have the time to be thinking about the wallpaper in No 10, because we’ve only got two years until the general election – we need to hit the ground running.

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Rishi Sunak steps up attack on Truss tax cuts as poll puts his rival well ahead

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Former chancellor says opponent’s economic policies risk stoking inflation and pushing up interest rates

Rishi Sunak has launched his strongest attack yet on his rival Liz Truss’s economic policies, claiming her £30bn plans for unfunded tax cuts risk stoking inflation and pushing up interest rates.

His attack came as a new poll of Tory party members gave Truss a commanding lead in the race to become prime minister.

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Liz Truss’s tax and spending plans sow consternation among economists

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Analysis: experts are lining up to warn that her policies will increase inflation and leave the UK with higher debt

Liz Truss claims her economic agenda of tax cuts and public spending will revitalise the UK economy, but it is not just her rival prime ministerial candidate Rishi Sunak arguing that the measures will be self-defeating.

Economists have lined up to warn that her £30bn package – including the reversal of this year’s national insurance rise, the suspension of green levies on power bills, and the cancellation of a sharp rise in corporation tax in 2023 – will increase inflation and leave the government with higher debt bills.

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Nobel prize-winning economist Joseph Stiglitz calls for windfall profits tax in Australia

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Tax is a ‘no-brainer’ after companies’ huge profits during Covid but corporate influence makes it ‘politically difficult’, Stiglitz says

The Nobel prize-winning economist Joseph Stiglitz has called for a windfall profits tax, arguing the idea is a “no-brainer” that has been taken off the table due to the influence of big companies.

Stiglitz made the comments to reporters during a tour of Australia after personally lobbying the treasurer, Jim Chalmers, to introduce the tax and warning that excessive interest rate rises could push Europe, the US, and then Australia into recession.

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‘Travelling circus’: Starmer says Tory hopefuls have lost economic credibility

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Exclusive: Labour leader, speaking after meeting German chancellor, condemns candidates’ ‘fanciful’ spending plans

Keir Starmer has dismissed the acrimonious Conservative leadership race as a “travelling circus”, in which the candidates have demolished their party’s economic credibility by promising billions of pounds of unfunded tax cuts.

Speaking on a visit to Berlin where he held talks with the German chancellor, Olaf Scholz, the Labour leader highlighted the “fanciful” spending pledges made by the five contenders battling it out to succeed Boris Johnson.

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Eight MPs make it on to first Tory leadership ballot as Sajid Javid pulls out of the race – live

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Kemi Badenoch, Suella Braverman, Jeremy Hunt, Penny Mordaunt, Rishi Sunak, Liz Truss, Tom Tugendhat and Nadhim Zahawi garner enough support

Jacob Rees-Mogg, the Brexit opportunities minister, and Nadine Dorries, the culture secretary, have just told Sky News that they are backing Liz Truss for the Tory leadership.

Rees-Mogg says Truss had been his strongest supporter in cabinet in terms of seeking Brexit opportunities. He went on:

When we discussed taxation, Liz was always opposed to Rishi’s higher taxes. That again is proper Conservatism. And I think she’s got the character to lead the party and the nation.

Liz Truss is the best candidate. She’s a proper Eurosceptic. She will deliver for the voters. She’ll deliver for the voters. She believes in low taxation.

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Sunak will vow to tackle inflation and then lower taxes if he becomes PM

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Ex-chancellor to kick off his Tory leadership campaign as speculation grows over who could back him

Rishi Sunak will kick off his leadership campaign on Tuesday with a promise to grip inflation and lower taxes, as speculation mounted over which candidates could swing in behind the former chancellor.

Sunak will promise “a return to traditional Conservative economic values – and that means honesty and responsibility, not fairytales.”

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Boris Johnson has left the UK economy in a parlous state

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Analysis: If Johnsonomics stands for anything, it is a lack of plan or vision to address Britain’s economic woes

Boris Johnson entered Downing Street in July 2019 with a promise. The doubters, doomsters and gloomsters were going to get it wrong again: his leadership would make Brexit a success, re-igniting an economy stalled by the divisions over Europe.

Three years later, almost to the day, he prepares to leave with the country reeling from a political implosion of his own making, and an economy teetering on the brink of recession.

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Nadhim Zahawi: is new chancellor going to change direction on economy?

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Analysis: Rishi Sunak’s successor treading tightrope between spending to keep PM in power and dealing with economic crisis

Should he remain in the job for longer than some political commentators expect, Nadhim Zahawi faces a balancing act as chancellor. He must walk the line between doing what it takes to prevent the political implosion of Boris Johnson’s government, and dealing with the worst succession of economic shocks to hit Britain since at least the 1970s.

As the fourth Conservative chancellor in as many years, parachuted in after Rishi Sunak resigned with a stinging critique of Johnson’s devil-may-care attitude towards tax and spending, Zahawi is expected to face heavy pressure from the prime minister to cut taxes to revive the economy.

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Soaring inflation pushes UK borrowing to £14bn in May

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Interest on debt payment leaps 70% on a year ago to £7.6bn, a monthly record

Government borrowing was higher than expected in May at £14bn as soaring inflation sent interest payments on the UK’s debt to a monthly record.

The Office for National Statistics (ONS) said debt interest payments leapt 70% on a year ago to £7.6bn, the third highest debt interest payment made by central government in any single month and the highest payment in May on record.

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Boris Johnson using Jedi mind trick on country over economy, says Starmer

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Labour leader says PM is spouting nonsense, telling people ‘they’ve never had it so good’, in bad-tempered PMQs

Keir Starmer has accused Boris Johnson of trying to fool the public with “nonsense” about a booming economy, as an often bad-tempered prime minister’s questions saw the pair square up over stagnant growth and tax rises.

In an extended Star Wars-referencing section, Starmer said Johnson was trying to “perform Jedi mind tricks on the country” by insisting the economy was buoyant, also mocking the PM by saying his backbenchers compared him to Jeremy Corbyn.

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CBI warns UK government over Northern Ireland protocol

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Impasse over Brexit deal forcing companies to reconsider investing in Britain, says business lobby group

The UK’s foremost business lobby group has warned the government that its threat to override the Northern Ireland protocol is forcing companies to think again about investing in Britain and dragging down the economy.

The Confederation of British Industry (CBI) said immediate talks with the EU, rather than political grandstanding, were needed to resolve the impasse over the protocol, which governs post-Brexit trade between the EU, Northern Ireland and Great Britain.

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Boris Johnson promises action on cost of living crisis but says higher wages risk further inflation – as it happened

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This live blog has now closed, you can read more on Boris Johnson’s comments about a potential ‘wage-price spiral’ here

The Queen has received a present from the cabinet to mark her Platinum Jubilee, No 10 says. It is a specially-commissioned musical box, with pictures of all the 14 prime ministers who have served here around the side. When it opens it plays Handel’s Hallelujah.

In every office there is always someone who organises the presents and this picture, on the No 10 Flickr account, suggests that in cabinet that job falls to Michael Ellis, the paymaster general.

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Zero-growth warning for UK economy as petrol prices surge

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OECD singles out cost of living crisis as a cause of Britain’s slide down growth league table

Boris Johnson’s attempt to reset his troubled premiership has received a double blow after petrol prices had their biggest daily rise in 17 years and a leading international thinktank said the UK economy would slow to a standstill next year.

Fears that Britain is heading for a prolonged period of 1970s-style stagflation intensified amid fresh evidence of the damaging impact of the war in Ukraine on the cost of living and growth.

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City donations worth £15m raise concerns over influence on UK politics

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Total donated to parties by financial firms and individuals tied to the sector over two years, report says

Concerns have been raised over the City’s influence on Westminster, after a report found financial firms and individuals tied to the sector donated £15m to political parties and gave £2m to MPs during the pandemic.

The campaign group Positive Money tallied the gifts, expenses and donations handed to MPs, peers and their parties, as well as the value of income from politicians’ second jobs, saying it contributed to finance’s “oversized influence” on policymaking.

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Labour urges spending watchdog to assess impact of chancellor’s £21bn package

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Shadow Treasury secretary asks Office for Budget Responsibility to examine Rishi Sunak’s emergency cost of living measures

Labour has called for an independent assessment of whether Rishi Sunak’s £21bn cost of living emergency package could cause inflation to rise even higher and a verdict on the fiscal impact of substantial borrowing.

Pat McFadden, shadow chief secretary to the Treasury, wrote to the Office for Budget Responsibility (OBR) to ask it to analyse the impact of the measures.

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Boris Johnson confident Tory MPs back him to survive as party leader and prime minister – as it happened

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This live blog is now closed. Boris Johnson changes ministerial code to axe need to resign for rule breaches

The Conservative MP Paul Holmes, who represents Eastleigh, has announced that he is resigning as a parliamentary private secretary in response to the revelations in the Sue Gray report.

Holmes, who was elected in 2019, was PPS to Priti Patel, the home secretary. A PPS – an unpaid ministerial “bag carrier” – is not a member of the government, but is considered part of the “payroll vote” and obliged to support the government in all divisions. Being a PPS is normally a stepping stone towards becoming a minister.

Revelations from the Sue Gray report that staff and cleaners were not treated properly is both disappointing and unacceptable. It is right that the prime minister apologised to staff. It clearly showed a culture in No 10 that was distasteful, and I am glad that there have been several reforms that Sue Gray has welcomed.

It is clear to me that a deep mistrust in both the government and the Conservative party has been created by these events, something that pains me personally as someone who always tries to represent Eastleigh and its people with integrity. Whether that is taking up your issues in parliament or helping people with their problems closer to home, since 2019 we have completed over 12,000 pieces of constituency casework. It is distressing to me that this work on your behalf has been tarnished by the toxic culture that seemed to have permeated No 10.

I’m not going to pretend that this is going to fix everything for everybody immediately. There are still going to be pressures. But it’s a very, very substantial commitment by the government to getting us through what will be, I’m afraid, still a bumpy time with the increase in energy prices around the world.

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Boris Johnson to stress work as the fix for cost of living crisis

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Ministers remain unable to decide on ways to help as energy firm boss warns soon 40% could be in fuel poverty

Boris Johnson hopes to blunt calls for urgent action on the cost of living crisis by stressing that work is the best route out of poverty, as an energy firm boss warned that 40% of households could soon be in fuel poverty.

No 10 sources confirmed on Sunday that the prime minister will continue to throw the spotlight on the healthy state of the job market, in the face of the rising clamour to help families struggling with their bills.

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Helping cash-strapped Britons won’t add to inflation, says CBI

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Chief of business association calls for stimulus that aids ‘hardest hit’ with rising food and fuel bills

Tackling rising food and fuel bills will not add to inflation and people who are “the hardest hit” need help now, the head of the UK’s biggest business association has warned.

Official figures published on Wednesday revealed UK inflation soared to 9% in April – its highest level for more than 40 years – as the rising cost of gas and electricity pushed household energy bills to record levels.

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Boris Johnson ‘choosing to let people struggle’ with cost of living says Keir Starmer – as it happened

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This live blog is now closed. You can find our latest cost of living stories below:

Anne-Marie Trevelyan, the international trade secretary, has warned that inflation will experience a further “bump” before prices are likely to stabilise.

In a Q&A after delivering a speech on green trade at Bloomberg’s HQ in London, she said countries around the world were facing a “a global battle against inflation”. She went on:

This is something we have to tackle across the board.

And the worry we always have is that inflation tends to have two bumps to it.

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