Category Archives: Tax and spending

Liz Truss under pressure to reveal details of energy crisis plan

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Emergency budget of winter tax cuts expected next week once period of national mourning for Queen is over

An emergency budget to bring in winter tax cuts for millions of people and set out more detail on energy handouts is expected late next week once the country emerges from national mourning.

Though politics has been paralysed by the death of the Queen, Liz Truss is under pressure from Tory MPs to set out her plans potentially on Thursday or Friday next week, before the Commons breaks up for party conferences.

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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 surges as Tory fears grow over Truss’s tax cut agenda

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Likely PM’s policies will mean ‘big trouble’, say critics, as Starmer’s energy price initiative boosts him in polls

Senior Tories have warned that their party will suffer dire electoral consequences under a Liz Truss premiership that fails to address the cost of living crisis, as Labour enjoys a poll bounce suggesting Keir Starmer could be on course for No 10.

Amid signs of mounting panic among high-ranking Conservatives about Truss’s economic policies, several former cabinet ministers told the Observer on Saturday the party would suffer devastating losses in blue and red wall seats unless Truss changes tack, if and when she enters No 10.

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UK energy bills – six ways to reduce the impact of soaring prices

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Be it a loft insulation drive or a lower price cap, there are many ways to help – but action must be swift and extensive

The UK government has been urged to take further action to alleviate the impact of soaring energy prices, and there are a number of measures it could take.

Any rescue package would need to be swift and extensive to prevent households being plunged into poverty this winter as home energy prices surge. Ministers will also need to dig deep to prevent more businesses hit by rising energy costs from defaulting on loans and declaring themselves bankrupt.

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Liz Truss doubles down on tax cuts over support for energy bills

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Foreign secretary had previously said she did not want to give ‘handouts’ to people struggling with the cost of living

Liz Truss has doubled down on her refusal to offer significant help to people with soaring energy bills this winter, despite a forecast that these could exceed £4,200 annually from January, and rise further during 2023.

Truss, the runaway favourite to succeed Boris Johnson as prime minister next month, has already said she does not want to give “handouts” to people struggling with bills, preferring to prioritise tax cuts.

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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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Penny Mordaunt denies Liz Truss is ruling out more help for poor this winter

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Truss said she would lower taxes not give ‘handouts’, but ally says future support is not off the table

A senior ally of Liz Truss has played down suggestions she ruled out more emergency support payments to help people struggling through the worsening cost of living crisis this winter.

Penny Mordaunt, who is backing the frontrunner in the Tory leadership race, said Truss’s comments had been misinterpreted and she wanted to prioritise tax cuts.

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Sunak scorns Truss’s claims that tax cuts can avert recession

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Tory leadership rivals disagree on how to turn economy around and avoid predicted downturn in Sky news debate

Liz Truss has claimed her tax cut plans could avert the looming recession, after the Bank of England forecast 13% inflation and a downturn lasting more than a year.

In a televised leadership interview, the foreign secretary was challenged about gloomy projections made by the Bank on Thursday, as it increased interest rates by 0.5 percentage points.

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Thatcher ministers turn on Liz Truss over tax cut plans

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Chris Patten, Norman Lamont and Malcolm Rifkind warn former PM would never have approved borrowing to fund £30bn cuts

Tory grandees who served in Margaret Thatcher’s final cabinet have warned that the former prime minister would never have approved of Liz Truss’s plan to slash £30bn off taxes funded by borrowing, as Rishi Sunak denounced his opponent’s plans as “immoral”.

With a bitter row over tax emerging as the defining issue in the race to succeed Boris Johnson, three members of Thatcher’s cabinet told the Observer that she would have taken a dim view of slashing taxes at a time of high inflation.This follows repeated claims that Truss has attempted to model herself on Thatcher in her attempt to win the leadership, which she has denied.

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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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Holidaymakers face delays as fuel price protesters block M5

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Slow-driving convoy caused long delays to those heading to Devon and Cornwall on the first day of the school holidays

Protesters campaigning against high fuel prices have disrupted holiday getaways to the south-west of England by driving in convoy slowly up and down a motorway before blockading a petrol station.

The convoy drove at 30mph on three lanes of the M5 north and south in Somerset and the Bristol area on Friday morning as tens of thousands of people headed to Devon and Cornwall to begin summer breaks.

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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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Tory contest shows government levelling up agenda is dead, Lisa Nandy to say

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Shadow minister to say PM hopefuls are vying ‘for the mantle of Margaret Thatcher, promising tax cuts for the wealthy’

The shadow communities secretary, Lisa Nandy, will claim the Conservative leadership contest has shown the government’s commitment to levelling up is dead, as she announces plans to give local communities the right to buy up assets such as empty shops.

Nandy will use a speech in Darlington to say Labour would press ahead with handing power to communities outside London and the south-east in an attempt to rebalance the UK’s economy.

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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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Liz Truss bids to save Tory leadership campaign with new tax cut pledges

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Foreign secretary announces tax cut proposals worth billions of pounds during online leadership debate

Liz Truss has sought to breathe new life into her faltering Conservative leadership campaign with a flurry of uncosted tax cut promises worth billions of pounds, as the five remaining candidates took part in their first mass debate.

Truss, who has the third highest number of Tory MPs’ votes – behind Rishi Sunak and Penny Mordaunt, promised to scrap a planned rise in corporation tax and suspend green energy levies, costing more than £20bn a year overall.

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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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