Book today: Kwasi Kwarteng ‘may have to ditch tax cuts’ as Tories branded ‘arsonists’

Full swap: Keir Starmer accuses Liz Truss of being ‘lost in denial’ amid market turmoil

The chancellor may ‘just have to present another rollback of the tax announcements’, Tory MP Mel Stride told the Commons.

Asking if the possibility of further U-turns is still “on the table”, Treasury Secretary Chris Philp responded by saying there were “no plans to undo any of the tax measures announced in the growth plan” – but said the chancellor would spell out exactly how he would balance the books on October 31.

It comes after Prime Minister Liz Truss clashed with MPs for the first time since her chancellor’s mini-budget was blamed for sparking turmoil in markets and sending the pound plummeting.

Ms Truss has been forced to defend the credibility of her economic plan, which focuses on borrowing money to fund growth-boosting measures – a view now eclipsed by Kwasi Kwarteng’s U-turn on plans to cut the interest rate. maximum taxation.

In the wake of today’s PMQs, Shadow Chancellor Rachel Reeves likened the ‘unfunded tax cuts’ in the mini-budget to a bonfire spreading out of control, comparing the Tories to ‘arsonists “.

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Truss thinks Andrew Bailey is ‘doing a good job’

Liz Truss thinks Bank of England Governor Andrew Bailey is doing a good job, Number 10 said.

Business Secretary Jacob Rees-Mogg appeared to criticize the Bank when he said recent market turmoil was due to higher interest rates in the US rather than the Chancellor’s mini-budget Kwasi Kwarteng.

Asked if the Prime Minister thought Mr Bailey was doing a good job, his official spokesman replied: ‘Yes. You have seen the Bank of England make a number of interventions recently.

“There are complex global issues at play that fuel this.”

Asked about Mr Rees-Mogg’s comments, the spokesman said the business secretary was “putting these global challenges into context”.

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Bank of England lagged behind, claims Truss adviser

Gerard Lyons – an economist who advised Liz Truss – said it is incorrect to suggest the mini-budget was the sole cause of the market turmoil, but admitted the government had “misinterpreted” the situation.

He told BBC Radio 4 world to one program: “We also have to ask ourselves why the markets were so feverish before the mini-budget? Why was the Bank of England seen by the markets as being so far behind the curve in terms of controlling inflation? »

Lyons added: “So I think there’s a whole combination of factors, but at the same time it has to be said that the mini-budget itself misread the situation.”

Mr Lyons said Chancellor Kwasi Kwarteng now needed a ‘clear and credible plan, which shows the debt-to-GDP ratio declining over time’.

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Tory MP suggests U-turn on corporation tax cut

Tory MP Kevin Hollinrake, another member of the Treasury select committee, said it would be better for Kwasi Kwarteng to scrap some tax plans than cause further market turbulence.

Speaking to BBC Radio 4 world to one programme, he said he believed the Chancellor could survive such an embarrassing reversal, even if it did not “bode well”.

Hollinrake pointed to the planned corporate tax hike as a potential option for a U-turn – saying markets will want to see “something more tangible” to balance the books.

“I think it’s better to have looked at this more carefully… and said ‘I think we got it wrong and these tax cuts need to be introduced over time’.”

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Chancellor may have to ‘backtrack’ on tax cuts, says senior Tory MP

Senior Tory MP Mel Stride told the House of Commons the Chancellor may ‘just have to come up with another rollback of the tax announcements’ – asking Treasury Minister Chris Philp if that possibility is still ‘on the table’.

Mr Philp said there were ‘no plans to reverse any of the tax measures announced in the growth plan’ – but said the chancellor would explain exactly how he would balance the books on October 31.

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Tories are arsonists, claims Shadow Chancellor

Shadow Chancellor Rachel Reeves compared the ‘unfunded tax cuts’ in the mini budget to a bonfire spreading out of control, likening the Tories to arsonists.

“It was built and then burned down by a completely out of control Conservative Party. Not troublemakers, but arsonists. And that fire has now spread,” she said.

Ahead of the end of the Bank of England’s emergency bond buying operations on Friday, Ms Reeves asked what the government would do to protect people’s pensions.

Conservative Treasury Minister Chris Philp said: “The fundamentals of the UK economy remain resilient.”

Met by laughter and jeers from the Labor benches, the minister said the government had a plan for growth and that “we intend to do this in a fiscally responsible way”.

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Government growth target nearly impossible, says economist

A leading economist is skeptical of the government’s goal of achieving 2.5% annual economic growth, saying it will be “almost impossible” within five years.

Deutsche Bank’s chief UK economist, Sanjay Raja, suggested markets would expect a “down payment” to show how the government intends to control finances, suggesting spending cuts or tax hikes of around £20-30 billion will be needed. as a first step.

The Institute for Fiscal Studies has suggested that a £62billion ‘fiscal squeeze’ in 2026-27 will be needed to stabilize debt levels, meaning either tax hikes or spending cuts .

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‘All options are open’ on coronation holiday

“All options are open” on whether to have a public holiday to mark the coronation, Downing Street says.

Buckingham Palace’s announcement of the coronation of King Charles III on Saturday May 6 prompted calls for a special day off, writes Andrew Woodcock:

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We won’t roll back tax cuts, says Treasury minister

Treasury Minister Chris Philp insisted there were no plans to reverse the tax measures announced in the government’s ‘growth plan’.

Chris Philp has been mocked by Labor MPs after insisting the government no longer plans to backtrack when pressured by top Tory Mel Stride to change course.

Mr Stride, who chairs the Treasury Select Committee, told the House of Commons: ‘The Chancellor was absolutely right to bring forward the date of the OBR medium term plan and forecast.

“He has, of course, a huge challenge now to reassure the markets. He has to put in place the right fiscal rules, he has to come up with spending restrictions and politically feasible revenue increases.

“Given the enormous challenges, many – myself included – think it is entirely possible that he will simply have to backtrack on the tax announcements he made on September 23.

“So can I ask (Mr Philp) to confirm that this possibility is still on the table?”

Mr Philp replied: ‘There are no plans to reverse the tax measures announced in the growth plan.

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Inverted mini-budget, says the shadow chancellor

Shadow Chancellor Rachel Reeves has called on the government to “put aside its pride and undo this catastrophic mini budget”.

She asked in the House of Commons what guarantees the government would give on ‘falling currencies’, how many foreclosures there would be if the government did not change course, and how much the government is still borrowing on interest on debt due higher borrowing costs.

She said: “With ministers desperately trying to blame global conditions, why has no other central bank in the world had to intervene three times in less than three weeks to protect financial stability?

“The country is now facing a very serious situation. Before the end of the Bank of England’s emergency operations on Friday, what measures will the government take to ensure that its budget does not have further consequences on financial stability or on people’s pensions ?

“This is a Tory crisis made in Downing Street, but it is ordinary working people who are paying the price, and it can only be solved when the Tories put aside their pride and reverse this catastrophic mini budget, and they must do it now.”

In a tweet, she accused the Prime Minister of evading responsibility.

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The Prime Minister’s Questions end with a statement from Liz Truss that “the last thing we need is a general election.”

It comes as the House of Commons is set to debate a 575,000-signature petition calling for an early national ballot.

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