The Ministry of Education has issued a caution to teachers who pay unapproved fees to directors of education and supervisors to facilitate their promotions.
Speaking to the media, the ministry’s PRO, Kwesi Kwarteng, stated that an investigation will be launched to examine the conduct of education officers who have been demanding fees from teachers to facilitate their promotions.
Reports have emerged that some teachers have been asked to pay GH¢200 ahead of the upcoming teacher promotion exercise.
According to reports, teachers are expected to hand over the money in a white envelope to their respective head teachers, who will then pass it on to the GES promotion supervisors.
The promotion supervision is set to commence next week, and it is anticipated that over a hundred teachers will be required to make the payment to be eligible for promotion.
Mr. Kwarteng emphasized that no teacher should be subjected to paying such unauthorized fees.
Public Relations Officer at the Ministry of Education, Kwesi Kwarteng, says majority of students received automatic placement under the Computerised School Selection Placement System (CSSPS).
According to him, the system was able to place about 69.24% of students.
He made the remark on Monday, February 20, 2023, while responding to questions about the Computerised School Selection Placement System (CSSPS).
The remaining 30.76% of students who qualified are expected to undertake self-placement to secure a school.
Speaking on other matters, he noted that it is impossible for students to be placed in schools that they didn’t choose.
“When you miss your first choice, the system will consider you for the second choice,” adding that his outfit examines the available slots and “match it up with the number of remaining students who have to be placed.”
He further noted that there has to be transparency and audit in the protocol system.
Liz Truss resigned after just 44 days as a result of the Tory MP’s mini-budget statement,which caused one of the most turbulent economic periods in modern history.
Former chancellor Kwasi Kwarteng has accepted that he and Liz Truss “blew it” by instituting extensive economic reforms and “got carried away.”
The Conservative MP called their low-tax, small-state plans “very exciting” and said he fully supported them, but he also acknowledged that the way they were carried out was their downfall.
The markets crashed after Mr. Kwarteng announced his “mini” budget just 17 days after Ms. Truss appointed him chancellor, forcing him to resign before Ms. Truss was also forced to resign.
“It was very exciting, you felt you were part of a project,” he told the FT Weekend Magazine.
As soon as she became PM, Ms Truss said she did not want any opinion polling as she felt politicians were obsessed with “optics”.
Despite advisers warning her and Mr Kwarteng that their plans would be seen as a “budget for the rich”, they were ignored.
Mr Kwarteng added: “People got carried away, myself included. There was no tactical subtlety whatsoever.”
He still believes the goal was correct but admitted: “Where we fell woefully short was to have a tactical plan.”
As the economic turmoil continued, despite the government U-turning on some of the recently announced policies, Mr Kwarteng went to IMF meetings in Washington as he did not want to cause more panic by not attending.
But he was called back early after, he and his allies believe, Cabinet Secretary Simon Case managed to persuade Ms Truss she had to reverse some of the measures to avoid economic ruin.
When Ms Truss told him he could no longer be chancellor on 14 October, he says he told her: “I know, I’ve seen it on Twitter.”
Mr Kwarteng said he warned her he was a “firebreak” and getting rid of him would “make her weaker, not stronger”.
“She said she was doing this to save her premiership,” he told the FT.
Last month, Mr Kwarteng said he and Ms Truss are still “friends”.
Chancellor Jeremy Huntsays, everyone will have to pay more tax under plans due to be announced on Thursday.
“I’ve been explicit that taxes are going up,” he told the BBC’s Laura Kuenssberg.
He also confirmed that he would provide more information about additional assistance for people struggling with energy bills, but warned that there would be constraints.
Labour accused the Conservatives of creating a “total mess” of the economy.
Shadow chancellor Rachel Reeves said Mr Hunt was choosing to tax working people while doing “little to close tax loopholes which mean some of the wealthiest don’t pay their fair share”.
Mr Hunt was speaking to the BBC just days before he is due to deliver his tax and spending plans in Parliament as part of the Autumn Statement.
The BBC has been told the chancellor is set to announce spending cuts of about £35bn and plans to raise £20bn in tax.
It comes as the UK faces major economic challenges, with soaring living costs and a warning from the Bank of England that the country is facing its longest recession since records began.
It also follows the mini-Budget of former Prime Minister Liz Truss and her then chancellor, Kwasi Kwarteng, which led to market turmoil and a jump in government borrowing costs. Many of those policies have since been reversed by Mr Hunt.
Independent forecasts are understood to have identified a gap of around £55bn in the public finances – although some economists have questioned the size of the ‘black hole’.
‘Unappetising announcements’
Laura Kuenssberg, Presenter, Sunday with Laura Kuenssberg
“Everyone is going to pay more tax” – not the kind of political message any minister would ever choose to say out loud.
But that is the clear statement from Chancellor Jeremy Hunt, preparing the ground for a pretty unappetising set of announcements he is going to make this Thursday.
As ever at this stage in the cycle, the occupants of No 11 are coy about giving any specifics. But alongside that bold and important statement that genuinely will affect everyone in one way or another, it is abundantly clear that public services are in for a hard time with no guarantee there’ll be extra cash to help them cope with the costs of inflation.
And if that wasn’t enough, the help that everyone has been receiving with their energy bills will come to an end for many.
These are important days for the new chancellor, and new Prime Minister Rishi Sunak, painting a grim scenario for the next few years.
It will take much political skill to be able to get the public on their side, and back these decisions. Money is short, but significantly behind in the polls, and political goodwill towards the government is too.
It also won’t have escaped people’s notice that the chancellor accepted Brexit had costs for the economy too. Wrapped up in suggestions that there were lots of opportunities still to come, it’s a rare acknowledgement from a Conservative politician.
Speaking to the BBC, Mr Hunt acknowledged his plans would “disappoint people” – but he promised to protect the “most vulnerable”.
“We have the plan to see us through choppy waters… we will make the recession we are in as short and shallow as possible.”
The BBC has been told Mr Hunt is planning to freeze tax thresholds – the levels of income at which people begin to pay more tax – until 2028.
While he did not confirm these plans when appearing on Sunday with Laura Kuenssberg, the chancellor said: “I think I’ve been completely explicit that taxes are going to go up, and that’s a very difficult thing for me to do because I came into politics to do the exact opposite.”
He did not spell out which taxes could go up, but increasing income tax, VAT or National Insurance would break a promise made in the Conservative’s 2019 manifesto.
Some Conservatives MPs have raised concern about increasing taxes, with former party leader Iain Duncan Smith telling Sky News it could lead to a “deeper” recession.
Addressing the concerns of his colleagues, Mr Hunt said the previous leadership had tried that approach, “in other words a plan that doesn’t show how, in the long run, we can afford it”.
“We have tried that, we saw it didn’t work.”
On energy costs, Mr Hunt praised his predecessor Mr Kwarteng for introducing a price cap on the typical household energy bill.
The energy price guarantee had been due to last for two years, but after taking over from Mr Kwarteng, Mr Hunt announced it would expire in April.
Speaking to the BBC, he said he would set out what further support would be given to those struggling on Thursday.
However, he emphasised that future help had to be “done on a sustainable basis” and there would have to be “some constraints”.
Asked if he was ditching the energy plan set out by former prime minister Boris Johnson, the chancellor said he admired Mr Johnson’s “big visions” but added there were elements of “cakeism” – a reference to the phrase: “Have your cake and eat it.”
He said he wanted to “deliver the exciting things he outlined” but that actions had to be credible and affordable.
On whether Brexit had damaged the economy, Mr Hunt said: “I don’t deny there are costs, but there are also opportunities.”
He said the coronavirus pandemic had prevented the UK from taking advantage of opportunities open to it after leaving the European Union.
Labour’s Rachel Reeves said she recognised there would be “constraints” on what the government could do, partly because of “mistakes the government has made”.
However, she added: “Just because you have to make difficult decisions it doesn’t mean you have to make the same decisions.”
She said Labour had “no plans” to raise the income tax or national insurance and would focus on closing “loopholes” in the tax system.
The Liberal Democrat’s Treasury spokespersonSarah Olney said: “Hardworking families look set to be clobbered with yet more unfair tax hikes because the Conservative party crashed the economy.”
Former chancellor Kwasi Kwarteng has said he warned Liz Truss that her ill-fated economic plans were moving too quickly.
Mr Kwarteng told TalkTV in his first interview since being fired by the then-PM that he had warned her to “slow down” after the September mini-budget.
He claimed he told her she was “mad” to fire him and that if she did, she would only last “three or four weeks.”
“Little did I know it was only going to be six days,” he added.
Mr Kwarteng was dramatically fired by Ms Truss in October, two weeks after their tax-cutting mini-budget sparked turmoil on financial markets.
After abandoning almost all of the plan in a bid to stay in power, she announced her resignation a few days later after support from Tory MPs ebbed away.
Speaking to TalkTV Mr Kwarteng said that he had warned Ms Truss about going at a breakneck speed with economic measures after the mini-budget.
“She said, ‘Well, I’ve only got two years’ and I said, ‘You will have two months if you carry on like this’. And that is, I’m afraid, what happened.”
He also said: “I think the prime minister was very much of the view that we needed to move things fast. But I think it was too quick.”
In the interview he acknowledged he had to “bear some responsibility” for the pace of the changes, which were “too quick”.
He also revealed he found out he was going to be sacked when he saw a journalist tweeting about it while he was in the car going to Downing Street, after being summoned back from a trip to the US.
He said he had told her: “Prime ministers don’t get rid of chancellors.”
The former chancellor said he did not think the prime ministercould fire him “just for implementing what she campaigned on.”
Ghana’s Finance Minister, Ken Ofori-Atta has shared his sentiments on the firing of British-born Ghanaian UK chancellor Kwasi Kwarteng.
The Minister stated that it was painful to realize tha t a Ghanaian has strived to achieve such a feat but has had to lose the job just a few days after the appointment.
Kwasi Kwarteng was sacked as UK’s chancellor after 6 weeks in office.
According to a Reuters report attributing the development to the UK Times newspaper, Liz Truss is preparing to reverse a decision announced in the country’s mini-budget which was delivered by Kwasi Kwarteng.
The mini-budget has since sparked financial turmoil in the markets and caused a revolt among Conservative MPs in the UK.
Ofori-Atta added that he has reached out to Kwesi Kwarteng with a message that says God knows best.
“The pain or sadness is that he is a Ghanaian reaching almost the highest level, Chancellor of the Exchequer. Yes, we sat together three days ago.
“I am always very optimistic, if one is really doing things in truth there might be some waves but the Lord will see him through. I was surprised at what happened. I have sent an email to him, I told him the Lord knows best,” Ofori-Atta is quoted by 3news.com.
Kwasi Kwarteng has been dismissed as chancellor of the UK after just 38 days in office. His dramatic exit makes him the second shortest-serving chancellor in British history.
He was relieved of his post following a crunch meeting with Prime Minister Liz Truss after he cut short his trip to the U.S.
In a letter, Kwarteng said that Truss’s vision for Britain “is the right one” and that “following the status quo was simply not an option”.
Related stories
“As I said many times in the past weeks, following the status quo was simply not an option… for too long this country has been dogged by low growth rates and high taxation – that must change if this country is to succeed,” he said.
In a letter, Truss thanked him for his service and said she was “deeply sorry” to lose him from the government. “We share the same vision for our country and the same firm conviction to go for growth,” Ms Truss added.
According to her, Kwarteng became Chancellor in extraordinarily challenging times in the face of severe global headwinds.
Meanwhile, Truss has appointed former Health Minister Jeremy Hunt as the new chancellor of the exchequer. According to her, Hunt is “one of the most experienced and widely respected government ministers and parliamentarians.”
“He shares my convictions and ambitions for our country. He will deliver the medium-term fiscal plan at the end of this month. He will see through the support we are providing to help families and businesses, including our energy price guarantee.”
Here’s Kwarteng’s letter to the PM in full:
Dear Prime Minister,
You have asked me to stand aside as your Chancellor. I have accepted.
When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.
The economic environment has changed rapidly since we set out the Growth Plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.
It is important now as we move forward to emphasise your Government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.
We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first Chancellor.
Your success is this country’s success and I wish you well.
Kwasi Kwarteng
Member of Parliament for Spelthorne.
Kwarteng became the first black to become chancellor of the exchequer. Prior to his appointment, he served as the first Black business secretary.
Before becoming business secretary, Kwarteng held a more junior role in the business department and was also a junior minister at the former Department for Exiting the European Union, according to the politico.
According to gov.uk, the Chancellor of the Exchequer “is the government’s chief financial minister and as such is responsible for raising revenue through taxation or borrowing and for controlling public spending.” It adds that the Chancellor’s responsibilities cover:
fiscal policy (including the presenting of the annual Budget);
monetary policy, setting inflation targets;
ministerial arrangements (in his role as Second Lord of the Treasury);
overall responsibility for the Treasury’s response to COVID-19.
Kwarteng is of Ghanaian origin. His parents, father Alfred and mother Charlotte came to the UK as students in the 1960s. His father went on to become an economist while his mom became a barrister. The only child of his parents, Kwarteng was born in Waltham Forest, east London in 1975.
He began his education at a state primary and by age eight, he was sent to the independent prep school Colet Court. At age 13, he won a scholarship to study at Eton College and later read history at Trinity College, Cambridge, where he earned Bachelor and PhD degrees in British History.
Kwarteng’s first career started as a columnist for the Daily Telegraph and as a financial analyst at banks including JP Morgan. He authored the book “Ghosts of Empire,” about the legacy of the British Empire and also co-authored “Gridlock Nation” with Jonathan Dupont in 2011, on the causes and solutions to traffic congestion in Britain.
In 2012, he co-authored the book Britannia Unchained with some Tory MPs, including Liz Truss. They claimed: “Once they enter the workplace, the British are among the worst idlers in the world.”
According to the BBC, Kwarteng has since distanced himself from this view. The BBC reported him as saying “that the context of the pandemic, huge government spending on measures such as the furlough scheme, climate change challenges and Brexit mean that it is very difficult even to apply comments from five or six years ago today.”
He first got involved in Conservative politics as the chairman of the Bow Group think tank, according to the BBC. By 2005, his sights were set on parliament and he was unsuccessful in his first attempt to represent the people of Brent East. He came in third after winning Liberal Democrat and second place Labour.
His parliamentary journey began in 2010 when he got his next chance and ran for the seat of Spelthorne in Surrey, a seat he won comfortably. He was re-elected as Conservative MP for Spelthorne on May 7, 2015.
Kwarteng has served on some Select Committees since being elected and has served as Parliamentary Private Secretary (PPS) to the Leader of the House of Lords and the Chancellor of the Exchequer as well as Parliamentary Under-Secretary of State in the Department for Exiting the European Union.
Kwarteng has been a strong advocate of local enterprise and reforms in the business environment to make the UK business-friendly. He launched an initiative in 2013 dubbed the “Spelthorne Business Plan Competition” to find the local entrepreneurs of tomorrow. The competition has run successfully every year since it was launched.
Kwasi Kwarteng has been sacked as chancellor three weeks after his mini-budget unleashed chaos in the economy.
He was appointed to the role by Liz Truss only 38 days ago, making him the second-shortest serving chancellor after Iain Macleod, who died a month after being handed the job by Edward Heath.
Mr Kwarteng’s downfall was set in motion by the mini-budget on 23 September, in which he announced £45bn in unfunded tax cuts.
The mini-budget pushed the pound to a record low against the dollar, sent the cost of government borrowing and mortgage rates up and led to an unprecedented intervention by the Bank of England.
In Mr Kwarteng’s letter to Ms Truss, he said: “You have asked me to stand aside as your chancellor. I have accepted.”
He said he accepted the job “in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices”.
The news that Prime Minister Liz Truss will hold a press conference on the economy later today sent UK government bonds climbing.
The bonds are issued by the government to raise money and in return, it pays interest on them. The higher the price of the bonds, the lower the interest rate it pays, known as the yield.
The bond price fell after September’s mini-budget, causing yields to climb to their higher level since the financial crash in 2008, as investors demanded higher returns to lend to the UK.
Yields on 30-year UK bonds hit 5.17% on 28 September in the aftermath of the mini-budget. Today’s news sent them tumbling to as low as 4.22%.
However, that’s still some way above the level they were at the day before the mini-budget on 23 September – then they stood at 3.59%.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s and do not reflect those of The Independent Ghana
Kwasi Kwartenghas confirmed he has today been sacked as chancellor after just 38 days in the role.
Publishing a letter he has written to Prime Minister Liz Truss on Twitter, Mr Kwarteng said it had been “an honour” to serve as her first chancellor.
Describing the “incredibly difficult” situation Ms Truss’s government inherited, Mr Kwarteng’s letter adds: “However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option.
“For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.”
Despite growing calls for further U-turns over the government’s controversial mini-budget, Mr Kwarteng describes his Medium-Term Fiscal Plan – due to be unveiled on 31 October – as “crucial”.
He says he believes the PM’s “vision is the right one”, adding that he looks forward “to supporting you and my successor” from the back benches.
Mr Kwarteng’s letter concludes: “Your success is this country’s success and I wish you well.”
Discussion is happening at all levels in the Conservative partyabout whether the prime minister can survive – even if she replaces her chancellor.
As one senior minister in her government put it to me this morning before reports that Kwarteng would be sacked: “I honestly don’t think either of them, Liz or Kwasi have a clue, I don’t think they know what they’re doing.”
“They’ve got one shot to satisfy the markets,” the minister said – with a full U-turn on the corporation tax freeze and perhaps more: “The worst possible thing, now the markets have priced in a U-turn on corporation tax would be mealy-mouthed partial U-turn.”
“But my instinct is she won’t survive. She’s introduced herself to the country in the worst way imaginable, and people’s views of her are quite settled now.
“Even if she stays, you can’t have a chancellor who has lost the confidence of the markets, that’s never happened before that I can remember”. The minister said the prime minister might need a complete reboot of the Treasury team to restore confidence, but having jettisoned key parts of her economic programme, “she is a husk.”
This minister and others point out that her controversial supply-side reforms are likely to be opposed in parliament – as are spending cuts on the scale that may be needed to pay for her measures.
Other MPs also say she will need a humiliating change of direction to survive. One long-serving MPsaid: “It’s unfair for Kwasi to go in the sense that it was all her idea, but politics isn’t fair. It’s a matter of survival for her now, there are discussions going on but it’s not organized yet.”
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s and do not reflect those of The Independent Ghana
The Bank of England is set to stop its government bond-buying scheme today after attempting to reassure the UK’s financial markets.
The Bank launched the unprecedented intervention after the chancellor’s mini-budget caused chaos within the markets, as well as a potential pension pots crisis.
It promised to buy up to £65bn in government bonds – which are known as gilts – from those who wanted to sell them.
The government issues bonds to raise money for public spending, often used to service pension funds and the life insurance market.
Banks and big financial institutions that buy the gilts from the government at auction can sell them on to smaller financial institutions, traders or investors on the open market.
The price – or rate – at which they are bought and sold will be higher if investors think the government is able to repay the debt when the bond matures.
But when confidence in the UK economy falls, so does the bond price.
This increases the yield, the rate of interest, or the cost of borrowing, as investors seek to protect their money.
How much did the BoE spend on bonds?
The scheme launched by the Bank of England was designed to restore confidence in the government’s finances – increasing bond prices and decreasing the yields it has to pay on them.
Initially, the Bank’s intervention seemed to push down yields on these gilts.
But on Wednesday, yields had surged as high as 5.1%, the same level they reached before the Bank’s initial intervention.
As part of the programme, the Bank bought around £4.35bn of bonds on Wednesday and £4.7bn on Thursday in an increased effort to help soothe the markets.
It brings the total bond buying to £17.8bn.
Ultimately, it has helped to prop up pension funds at a time when they were already under a lot of strain from global financial pressures.
Another U-turn expected
Chancellor Kwasi Kwarteng and Prime Minister Liz Truss are now under pressure to reinstate a planned increase in corporation tax from April.
On Thursday night, the chancellor announced he would be returning to the UK from the US earlier than planned, amid growing expectations of a government U-turn on corporation tax.
The widely anticipated move appeared to reassure the finance industry after Bank of England Governor Andrew Bailey spooked the markets by insisting that the emergency support would not be extended.
Mr Kwarteng has also that there would be “no real cuts to public spending”, appearing to double down on comments made in the House of Commons by the PM on Wednesday.
The government’s plans revolve around securing an increase in economic growth – with a target of an annual rise of around 2.5% in gross domestic product.
The crucial date will be 31 October, when the forecasts presented by the Office for Budget Responsibility alongside the chancellor’s statement will give an assessmentof whether such a plan is realistic.
Some senior Conservative MPs have said that the government may need to reconsider its tax-cutting proposals in order to calm the financial markets and stabilise the economy.
The warnings were issued before the prime minister’s scathing appearance before a gathering of Tory backbenchers.
One loyal minister told the BBC: “We are completely in a dreadful place. There is no way out – maybe Liz Truss will find a way, but I cannot see it.”
Ms Truss has repeatedly defended the proposed tax cuts outlined last month.
The chancellor’s mini-budget on 23 September, which included £45bn of tax cuts funded by borrowing, sparked turmoil on financial markets and prompted the Bank of England to intervene to protect pension funds.
Kwasi Kwarteng is due to set out how he will fund the package and reduce debt on 31 October.
Ms Truss insists cancelling a rise in corporation tax from 19% to 25% due in April and other tax cuts will help boost growth.
The prime minister also believes stepping back from what she describes as the highest tax burden in 70 years would allow the public to keep more of the money they earn at a time of global high prices.
One of the ways the government plans to achieve this is by bringing forward a 1p cut in the lower rate of income tax, so people will be taxed 19% on earnings between £12,571 and £50,270.
But the editor of Conservative Home Paul Goodman has argued the mini-budget is now “more likely than not” to be totally withdrawn.
Mr Goodman told BBC Radio 4’s Today programme he was not sure Conservative ministers and MPs were “capable of putting together a package of public spending cuts on the scale required” to balance the books.
“And if they do, whether [the cuts] are going be acceptable to the markets,” he added. “Or whether the markets are now going to demand the withdrawal, in effect, of the mini-budget.”
Ms Truss has denied she is planning public spending cuts, saying the government would instead focus on reducing debt “by making sure we spend public money well”.
However, Mel Stride, a prominent backer of Ms Truss’s leadership rival Rishi Sunak, suggested the government would need to show a “clear change of tack” to restore credibility with the financial markets.
“Given the current clear government position on protecting public spending, there is an emerging question. Whether any plan that does not now include at least some element of further row back on the tax package can actually satisfy the markets,” he said.
Earlier, he told the Commons he believed it was “quite possible” the chancellor would have to make more changes to the tax cuts announced in his mini-budget.
Asked to confirm whether this possibility was still on the table, Treasury Minister Chris Philp replied: “There are not any plans to reverse any of the tax measures announced in the growth plan.”
Tory MP Kevin Hollinrake, a Sunak supporter, said it would be better for the chancellor to U-turn on aspects of his mini-budget rather than cause more market turmoil.
“I think it’s better to have looked at this more carefully in the context of what’s happened over the last few weeks and say ‘I think we’ve got some of this wrong and these tax cuts need to be introduced over time’,” he told BBC Radio 4’s World at One programme.
He suggested reversing the government’s decision to scrap the planned hike in corporation tax was one potential option.
Meanwhile, former deputy prime minister Damian Green said an obvious way to reduce debt while ruling out public spending cuts would be to defer some tax cuts.
He told BBC Radio 4’s PM programme the reversal of some parts of the mini-budget was being discussed openly by Tory MPs.
Former Conservative minister David Davis suggested overturning some of the tax cuts would “buy some time” and persuade Tory critics to “come in behind them”.
He told ITV’s Peston the mini-budget was a “maxi-shambles” but he did not think there would be moves to replace the prime minister in the next few months as the party would have “zero chance” of winning an election if it was in a “civil war”.
The government has already U-turned on its plan to scrap the top income tax rate, following market turmoil and vocal opposition from some Tories.
However, this only made up £2bn of the tax cuts announced by the chancellor.
On Wednesday evening, Ms Trussfaced sharp criticism from some of her own MPs during a meeting of the 1922 Committee of backbenchers.
Sources in the room told the BBC that Robert Halfon had accused Ms Truss of “trashing blue collar conservatism”.
He told her the party’s record over the past 10 years had included things like boosting apprenticeships and the living wage, whereas she had cut tax for millionaires and wanted to cut affordable housing and benefits.
MPs who were present said he got a cheer, while Ms Truss looked “shocked” and said he could come to speak to her.
They said another Tory MP, James Cartlidge, also criticised the government’s mini-budget, saying the communication had been poor and she had not prepared the markets.
Both MPs supported Mr Sunak during the Tory leadership election.
The BBC’s Nick Watt said he encountered a “wall of derision and unease” about the prime minister outside the room.
The loyal minister also told him: “It’s like Black Wednesday in 1992 when interest rates shot up, we lost economic credibility, and it took us 15 years to get it back.”
However, leaving the meeting the prime minister said it had been “very good”.
One MP who supported Ms Truss in the leadership race said the PM acknowledged during the meeting that she could have laid the ground better for her recent policies.
During the initial election rounds, most MPs did not back Ms Truss to become one of the final two in the contest. She won based on a final voteamong party members.
The UK’s biggest mortgage lenders will urge the chancellor to extend a government home loans initiative that helps first-time buyers get onto the property ladder.
Sky News understands that executives from major banks and Nationwide, Britain’s biggest building society, will ask Kwasi Kwartengto commit to renewing the Mortgage Guarantee Scheme, which is scheduled to expire at the end of the year.
Launched in the spring of 2021, the scheme gives lenders an option to underwrite through the government the losses incurred on mortgages above 80% of the purchase price of a property.
The request to extend the scheme will form part of the banks’ agenda as they and the Treasury seek to address the disruption in the mortgage market following Mr Kwarteng’s ‘mini-Budget’ last month.
Lenders will also highlight the need for stability in financial markets in order to price home loans properly and will flag potential risks under the City watchdog’s new ‘consumer duty’ from agreeing to unaffordable mortgage loans.
Hundreds of mortgage deals have been pulled or frozen by banks in the last fortnight as a result of volatility in how banks price such loans.
The chief executive of the City watchdog told The Sunday Times at the weekend that he wanted lenders to justify the withdrawal of fixed-rate mortgage products.
“If a product is withdrawn for a temporary period, we want to understand when they’re going to come back to the market so that those people who may need to refinance are able to proceed with their plans,” Nikhil Rathi told the newspaper.
Giving his keynote Conservative Party conference speech following the 45p tax rate cut U-turn earlier this morning, Kwasi Kwarteng began by saying: “What a day.
“It has been tough, but we need to get on with the job in hand.”
The chancellor continues: “No more distractions, we have a plan and we have to get on and deliver it.”
But the chancellor acknowledges that his tax-cutting mini-budget caused economic turmoil, saying: “I know the plan we put forward 10 days ago caused a little turbulence. I get it.”
The chancellor stated that the government has changed its mind about wanting to eliminate the 45p income tax rate.
Kwasi Kwarteng told the BBC the proposals, announced just 10 days ago, had become “a massive distraction on what was a strong package”.
“We just talked to people, we listened to people, I get it,” he added.
The decsion, which marks a humiliating climbdown for Prime Minister Liz Truss, comes after several Tory MPs voiced their opposition to the plan.
Ex-cabinet minister Grant Shapps had warned the prime minister would lose a Commons vote on the proposal.
The plan to scrap the 45p rate, paid by people earning over £150,000 a year, had been criticized as unfair at time of rising living costs.
On Sunday, the prime minister had told the BBC she was absolutely committed to it as part of a package to make the tax system “simpler” and boost growth.
But the measure has seen remarkable opposition from the markets, opposition parties and a growing number of Tory MPs.
Increasingly, it seemed Ms Truss did not have the numbers to get it through.
On Sunday, senior Tory Michael Gove hinted he would not vote for the plan when it came to Parliament, saying “I don’t believe it’s right”.
The former cabinet minister said the PM’s decision was “a display of the wrong values”.
Mr Shapps also urged Ms Truss to U-turn, warning her not to have a “tin ear” to voters’ concerns about rising living costs.
“I don’t think the House is in a place where it’s likely to support that,” he told the BBC on Sunday.
The U-turn, suggestions of which were first reported by the Sun, comes on the second day of the Conservative conference in Birmingham, with Mr Kwarteng due to speak later on Monday.
The currency touched a record low last week after Mr Kwarteng’s mini-budget – which contained around £45bn of unfunded tax cuts – created turmoil on the markets.
Former culture secretary Nadine Dorries has said that Liz Truss has “thrown under a bus” her chancellor, Kwasi Kwarteng.
It comes after a morning interview in which the prime minister said that Mr Kwarteng made the decision to lower the top, 45%, rate of taxation.
Ms Dorries tweeted: “One of Boris Johnson‘s faults was that he could sometimes be too loyal and he got that.
“However, there is a balance, and throwing your chancellor under a bus on the first day of the conference really isn’t it.”
Using a finger crossed emoji, Ms Dorries said she hoped “things improve and settle down from now”.
One of @BorisJohnson faults was that he could sometimes be too loyal and he got that. However, there is a balance and throwing your Chancellor under a bus on the first day of conference really isn’t it. 🤞 things improve and settle down from now. https://t.co/72cBRWo2c1
Ms Dorries, who left the government when Liz Truss became prime minister, has also given an interview to The Sunday Times, in which she describes Boris Johnson as “one of the world’s best leaders”.
Since the mini-budget, nine days ago, the Conservatives have plummeted in the polls.
A YouGov/Times survey placed Labour 33 points ahead of the Tories.
Ms Dorries reflected: “The day they ousted Boris we were five points behind in the polls, which was actually fantastic.
“To be only five points behind in the polls when you have been in power for 12 years was an incredible place to be.
“Those of us who had been around in politics for more than five minutes knew in the full heat of the general election campaign that would burn away like the June mist on a morning lawn.
“At the time it seemed utterly incomprehensible the position MPs were about to put the government in by removing our most electorallysuccessful prime minister.”
After the mini-budget, Prime Minister Liz Trussacknowledged there had been “disruption” in the UK economy.
She declared in a letter to The Sun that she had “acted forcefully” and would maintain a “iron grip” on the country’s finances.
The government unveiled £45bn of tax cuts funded by borrowing last week – but did not accompany it with the usual economic assessment of the plans.
That worried investors causing the pound to slump and forcing the Bank of England to step in to reassure markets.
Ms Truss has resisted calls to reverse the cuts or to bring forward the publication of the independent fiscal watchdog’s economic forecasts and analysis of her tax plans.
The prime minister said she was “committed” to publishing the Office for Budget Responsibility (OBR) forecast on 23 November, the same day the chancellor is due to set out further economic plans, after she met the OBR on Friday.
But some Conservative MPs want to see this sooner to reassure the financial markets after turbulent trading.
The Treasury argues it should wait until additional changes are announced.
Ms Truss wrote in the Sun: “I am going to do things differently. It involves difficult decisions and does involve a disruption in the short term.”
She reiterated her commitment to “get the economy growing”, with plans to stimulate growth expected to include measures in eight areas – business regulation, agriculture, housing and planning, immigration, mobile and broadband, financial services, childcare, and energy.
And she insisted she would maintain an “iron grip on the national finances”.
Her chancellor, Kwasi Kwarteng, writing in the Telegraph newspaper, insisted that November’s statement would include a “credible plan” to get the public finances back on track, with a “commitment to spending discipline”.
“The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation,” Mr Kwarteng said.
But senior minister Simon Clarke told the Times newspaper the government needed to explain more about how it would control spending, as well as boost economic growth.
“We have acquired spending habits that outstrip our ability to pay for it. That needs to change,” he said.
He suggested the government was looking to make significant cuts and “trim the fat” when it comes to public spending.
“I think it is important that we look at a state which is extremely large, and look at how we can make sure that it is in full alignment with a lower tax economy.”
Ms Truss confirmed on Thursday that she was looking for cuts across the government as a way to pay for the mini-budget measures.
Waveney MP Peter Aldous said the timing of last Friday’s plan had been “hopelessly wrong”, and the rest of the details should be brought forward to October.
Liberal Democrat leader Sir Ed Davey argued that the government, by waiting until 23 November, was allowing the UK economy to “fly blind” for two months.
“Families and businesses can’t afford to wait any longer for this government to fix their botched, unfair budget,” he said.
IMAGE SOURCE,PA MEDIA Image caption, Leading members of the Office of Budget Responsibility arriving at 10 Downing Street for a rare meeting with the prime minister
What is the Office for Budget Responsibility?
The Office for Budget Responsibility is the independent watchdog for the government’s finances.
It usually produces economic forecasts twice a year, to accompany each autumn budget and spring statement.
It scrutinises government plans, to increase taxes or borrowing for example, and predicts what the likely impact on the overall economy will be.
These forecasts are so important because a strong one gives investors confidence to put money into the UK economy – whereas a weak one is likely to have the opposite effect.
The government can request forecasts from the OBR at any time to get independent advice on big moves.
But it did not take the OBR up on its offer ahead of last week’s mini-budget. This is thought to have undermined confidence in the markets.
This led to the pound dropping to its lowest rate against the dollar in 37 years on Monday, before returning to its previous level.
The government’s tax-cutting plan faced criticism from the International Monetary Fund, and the pound dropped to a 37-year low of $1.03 on Monday.
On Friday, the sterling rose to $1.12 – close to the level the currency was at before the mini-budget was announced.
Despite that, the rating agency Standard & Poor’s cut the outlook for its AA credit rating for British government debt from “stable” to “negative” on Friday, because of the prospect of higher borrowing needed to fund the pledges.
In recent days, the Conservatives have posted some of their worst opinion poll ratings in more than 20 years.
A poll published on Thursday by Survation put the party on 28%, more than 21 points behind Labour, while a separate survey by YouGov put the Tories on 21%, 33 points adrift.
Labour’s shadow business secretary Jonathan Reynolds said ministers should “get back to Parliament, revoke the changes, and start again to try and rebuild confidence”.
And Conservative MP Martin Vickers urged the prime minister not to scrap the 45p tax rate and the bankers’ bonus cap, describing the move as “a political own goal”.
However, another Tory backbencher, Andrea Leadsom, said the mini-budget was “unashamedly pro-growth”, and that the markets were “wrong to be jittery” about the changes.
For more than six decades, some of the UK’s most devastating economic events have happened under an autumn cloud. Is history repeating itself?
The poet and banker T S Eliot got it wrong – April is not the cruelest month, at least when it comes to financial crises. Autumn is crueller.
The months of September, Octobe,r and November are when gestating economic turbulence tends to burst into full-blown economic storms.
The precedent of the calendar should give the prime minister and chancellor something additional to worry about as the government insists the present shocks to sterling, inflation and mortgages are nothing to worry about in spite of the Bank of England having to intervene with £65bn worth of reserves.
The big daddy of them all, the Wall Street Crash in the United States, is dated to September and October 1929. In the UK, the economic crises of the post-Second World War period have had an autumnal flavour.
Timeline of tumbles
November 1967: The Wilson government’s “pound in your pocket” devaluation took the value of a pound sterling down to $2.47.
October 1974: At the second general election of that year, Labour consolidated its victory over Ted Heath’s Conservative government. Heath’s chancellor, Sir Anthony Barber, quit politics after his disastrous “dash for growth”.
October 1976: The “Crisis What Crisis” crisis when the UK needed a $3.9bn bailout loan from the IMF. Free-floating exchange rates pushed the pound to a then-record low of $1.57.
26 October 1989: Nigel Lawson, at the time the longest-serving Chancellor, resigned from Margaret Thatcher’s government over economic policy differences, precipitating the year-long Tory turmoil that resulted in her resignation as prime minister.
October 1990: John Major, the Conservative prime minister, took the pound into the European Exchange Rate (ERM) mechanism, having failed to announce the decision at the Conservative Party conference days before.
Image:The pound crashed out of the ERM after John Major’s decision to take it in
16 September 1992: Black Wednesday. The pound crashed out of the ERM after the failure of the Major government’s panic measures, which briefly lifted interest rates as high as 15%. Although it had only been re-elected that summer and although the new chancellor, Kenneth Clarke, adopted a new economic strategy, the government’s fortunes never recovered. Labour and Tony Blair won the election in May 1997 by a landslide.
September 2007. The building society Northern Rock closed its doors to savers. To continue trading, it had to seek support from the Bank of England as lender of last resort. By February 2008 the mortgage lender had to be nationalised. It was an early harbinger of:
September 2008 banking crisis: Overextension and insecure loans resulted in the bankruptcy of Lehman Brothers and the need for taxpayer bailouts of lending institutions on both sides of the Atlantic.
Gordon Brown “saves the world [banking system]” by marshaling an emergency meeting of the G20. In the UK, the public stakes taken to support major banks resulted in a squeeze on public spending and the “austerity” policies followed by subsequent governments.
October 2016: The pound dropped 28% after the vote to leave the EU, hitting a then-record low of US$1.14.
September 2022: Markets lose confidence in UK economic managementafter an uncosted “fiscal event” announcement by the new chancellor, Kwasi Kwarteng, on 23 September. The pound dips to a new record low of $1.03 before recovering to around $1.08.
Gilt yields, the driver of domestic inflation, surged – even as pension funds obliged to sell them courted bankruptcy until the Bank of England made its intervention. Hundreds of mortgage products were withdrawn, paralysing the housing market. The International Monetary Fund publicly rebuked the government for proposing huge tax cuts without the funds to pay for them.
That is where the UK finds itself today, on top of the cost of living crisis it already faced, in large part because of Russia’s attack on Ukraine and the consequent rises in energy prices.
It is too soon to tell where the economy is going to end up. Each of the autumnal plunges listed above had different causes resulting from the same mix of political and financial ambitions, and human hubris, greed, ambition, and overconfidence.
But why in autumn?
The reasons economic crises come to a head in the autumn are speculative. It is certainly a time of year for stocktaking in Western market economies after a break or slowdown over the summer holiday period.
Autumn, mid-October this year, is when the International Monetary Fund and the World Bank hold their annual joint meeting. With the year’s three-quarters done, it is natural to look back and assess whether things have gone well or badly. If there are problems, governing politicians and markets are likely to take steps to correct them, which sometimes only leads to bigger mistakes.
Autumn crunch points are stronger in this country because of the long summer parliamentary recess and the ritual of the annual party conference season.
If they had to change leader, and Tory MPs decided Boris Johnson had to go, they were determined to have a new leader in place in time for a relaunch at the Conservative Party conference next week in Birmingham.
No need for an ethics watchdog
Ms Truss, in turn, was so anxious to hit the ground running that she launched her new economic strategy without running it through the usual channels of the Office of Budget Responsibility (OBR) and having sacked Sir Tom Scholar, the long-standing permanent secretary at the Treasury.
The OBR is not the only regulatory institution treated with contempt by Ms Truss. She has also closed down the National Security Council and the Independent Office of Tax Simplification and suggested she will not need a No 10 ethics watchdog.
Her role model Margaret Thatcher – who like Sir Tony Blair avoided economic smashes while in office – played by the rules and conventions. She believed in balancing the books and famously observed, “You can’t buck the markets.”
The new prime minister thinks she and her chancellor know better, commenting: “We have had a consensus of the Treasury, of economists, with the Financial Times, with other outlets, peddling a particular type of economic policy for 20 years. It hasn’t delivered growth.”
Gamble
One can quibble with the accuracy of this statement, noting the early decade of this century was mostly characterized by on or above-trend growth and that since 2010, a Conservative government has been in charge, of which Ms Truss has been a supporter and member.
What matters is that Ms Truss has decided to gamble the economy on a new policy of pursuing growth at all costs even when her proposals seem contradictory, such as simultaneous borrowing, tax cuts, and huge government spending, to stabilize energy markets only temporarily.
Her opponent for the leadership, Rishi Sunak, warned of the consequences of her plans but was rejected by the party membership.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s and do not reflect those of The Independent Ghana
The prime minister’s initial instinct had been to stand firm and say little or nothing while faced with market turmoil, spiking borrowing costs, and the drop in the value of the pound in foreign exchange markets.
However, after a meeting with Chancellor Kwasi Kwarteng yesterday, Ms Truss agreed the Treasury would issue a statement promising further details on 23 November on how the government would ensure borrowing would not spiral out of control.
In effect, this gives the government eight weeks to come up with a plan to stabilise the markets – likely to involve spending cuts in Whitehall, public services, investment, and probably welfare.
The government will reject claims circulating in Whitehall that the meeting between Ms Truss and Mr Kwarteng was “argumentative” and descended into a “shouting match”.
This comes as the chancellor plans to hold further emergency meetings with global bankers this week to discourage them from speculating on the pound.
There is deep concern in the City that Treasury ministers are still gunning for Andrew Bailey, the governor of the Bank of England, and his two most senior lieutenants, with some believing that removing this team from office would dent Britain’s global reputation for stability.
Sky News can confirm that Monday’s meeting between the chancellor and prime minister concentrated on whether to issue a statement and what to say, with the two sides initially taking different positions.
One source said that the chancellor was more sympathetic to the Bank’s concernsthan the PM.
The prime minister’s team was aware that the Bank of England was going to issue a statement after the close of markets on Monday.
In the end, the Treasury issued an almost simultaneous statement promising to release economic forecasts by the Office for Budget Responsibility and a plan on debt on 23 November.
Chancellor Kwasi Kwartengis accused of squandering a chance to lay out a “real response to the cost of living problem” by Labour’s Shadow Chancellor Rachel Reeves in the opening of her keynote address at the Labour Party’s Annual Conference in Liverpool.
“What did we get instead?” she asks. “Tax cuts for the top 1%, increased bankers bonuses, and more than £50bn piled onto the national debt every single year.
“Sterling is down, that means higher prices as the cost of imports rise,” she says.
She adds that with the cost of government borrowing up, taxpayers’ money will go into paying off debt.
“The cost of borrowing for working people willnow go up too,” with higher mortgage repayments for families, she says.
“And all for what? Not to invest in industries of the future, not for our NHS, not for schools, but for tax cuts for the wealthiest, a return to trickle-down economics.”
Let’s head back toLondon now, the chancellor has declined to comment on reports that the pound hit an all-time low after his mini-budget.
Approached by a BBC journalist, while walking between government buildings, Kwasi Kwarteng is asked: “Chancellor, what are you doing to do about the turmoil in the markets this morning, sir?”
Refusing to answer, the Tory MP replies: “I’m not going to make any comment now.”
The reporter continues, asking what conversations Kwarteng is having with the Bank of England. He also asks if the chancellor has anything to say about what’s going on.
“Are you going to reverse your announcement that you made last Friday?” the reporter asks, referring to the mini-budget, to which Kwarteng says only: “I’m just going to my office now, thanks.”
The chancellor’s plan was quickly followed by the announcements of two additional unions to join the rail strikes on October 1. As a result, all unions are participating, and there won’t be training services in various parts of the country.
Unions have condemned Kwasi Kwarteng’s plan to introduce a law that will require members to vote on pay offers before strikes can happen.
The chancellor, announcing a mini-budget, said it was “unacceptable” industrial action was causing so much disruption – ahead of fresh rail strikes next week.
He said other European countries had minimum service levels to stop “militant trade unions” closing down transport systems.
Mr Kwarteng said the government would do the same “and go further”.
Moments after his comments, two unions, Unite and the Transport Salaried Staffs Association (TSSA), announced fresh rail strikes in the long-running dispute over jobs, pay, and conditions.
It means all the major rail unions are now taking strike action on 1 October, threatening a complete shutdown of the network for the first time since the row blew up earlier this year.
Further action is planned on 5 and 8 October, with Network Rail saying only about 11% of services will operate on 1 October and in some parts of the country there will be no trains at all.
The strikes will affect the Conservative Party conference in Birmingham, which takes place from 1-5 October, while the London Marathon takes place on 2 October when train services will also be affected.
Mick Lynch, general secretary of the RMT, said the plan was not the right move
Mick Lynch, general secretary of the Rail, Maritime, and Transport (RMT) union, said: “We already have the most severe anti-democratic trade union laws in western Europe and this latest threat will rightly enrage our members.
“RMT and other unions will not sit idly by or meekly accept any further obstacles on their members exercising the basic human right to withdraw their labour.”
Manuel Cortes, general secretary of the TSSA, said: “Unions are democratic organizations and industrial action only occurs as a last resort and after a postal ballot of members which also includes having to meet undemocratic thresholds.
“Frankly, having to ballot our members on pay offers before they can take industrial action will not make a blind bit of difference.
“If the offer is rubbish, it will still be rubbish whether our elected workplace reps have consulted our members on it or a ballot has taken place.
“This new Tory proposal will serve only to elongate disputes andgenerate greater anger among union members. It will do precisely nothing to encourage employers to come to the negotiating table with realistic offers.”
The key announcements in Chancellor Kwasi Kwarteng’s mini-budget: stamp duty, energy bills, and alcohol duty.
Here are the key points from Chancellor Kwasi Kwarteng’s mini-budget statement to MPs:
• The basic rate of income tax will be cut to 19p in the pound from April 2023. Will mean 31 million people will be better off by an average of £170 per year.
• The 45% higher rate of income tax is to be abolished.
• It was already announced that April’s National Insurance hike is to be reversed from 6 November – saving money for businesses and 28 million workers. The 1.25 percentage points increase was introduced under former chancellor Rishi Sunak.
• Planned duty rises on beer, cider, wine, and spirits canceled
• Stamp duty to be cut from “today”. Nothing will be paid for the first £250,000 of the property’s value – double the current amount allowed. The threshold for first-time buyers is to be increased from £300,000 to £425,000. The value of the property on which first-time buyers can claim relief is to also go up from £500,000 to £625,000.
Image:Energy bills
• Household bills to be cut by an expected £1,000 this year with aid from an energy price guarantee and a £400 grant. Millions of the most vulnerable households will receive additional payments, taking their total savings this year to £2,200.
Image: Economy
• Total cost of energy package, including business support, over the next six months estimated at £60bn. It is “entirely appropriate for the government to use our borrowing powers to fund temporary measures to support families and businesses”.
• Treasury estimates tax cut measures will cost nearly £45bn a year in 2026.
• Independent forecasters expect the government’s energy plan “will reduce peak inflation by around five percentage points”.
• Bank of England independence is “sacrosanct”.
• Government to set out its fiscal approach more fully in the future and the Office for Budget Responsibility will publish an economic and fiscal forecast before the end of the year.
• The EU-inspired cap on bankers’ bonuses is to be scrapped as part of efforts to “reaffirm” the UK’s status as a financial services hub. “All the bonus cap did was to push up the basic salary to bankers or drive activity outside Europe”, the chancellor said.
• Planned rise in corporation tax to 25% next year is cancelled. “We will have the lowest rate of corporation tax in the G20. This will plough almost £19 billion a year back into the economy”, Mr Kwarteng said.
• Will legislate to require trade unions to put pay offers to a member vote so strikes can only be called once negotiations have fully broken down.
• To cut taxes for businesses in designated sites for 10 years to support investment, jobs, and growth. In talks with 38 local and mayoral combined authority areas in England about “investment zones”. Aims to roll out more widely across the UK.
• Universal Credit Claimants who earn less than the equivalent of 15 hours a week at the National Living Wage, 120,000 people, will be required to meet regularly with their Work Coach and take active steps to increase their earnings or face having their benefits reduced. The aim is to reduce vacancies in the economy.
• Will simplify IR35 rules – governing how temporary contractors are paid – by scrapping reforms in 2017 and 2021 that added “unnecessary complexity and cost” for many businesses.
• Introducing VAT-free shopping for overseas visitors.
• Changing regulations to increase investment by pension funds into UK assets, benefiting savers and boosting economic growth, and incentivizing investment into Britain’s science and tech companies.
• Annual Investment Allowance – tax relief for businesses on plant and technology investment – to remain at £1m permanently, rather than letting it return to £200,000 in March 2023.
Beth Rigby, the political editor for Sky, has spoken with some of the chancellor’s colleagues.
One said it was now “starting to look like a Conservative government”, while another said they were very supportive.
A third said there was no future in the “steady as she goes” approach pursued under the previous chancellor Rishi Sunak, and that now is the right time to go for growth.
However, it is notable that those who opposed the tax-cutting, high-spending plans outlined by Liz Truss in her bid to be Tory leader seem to be keeping their cards close to their chest.
Sunak supporter and Treasury committee chair Mel Stride said there was a “vast void at the centre of the announcements”.
Veteran Conservative Sir Roger Gale said: “Fortune favours the brave, but not the foolhardy.
“Without the support of an OBR Kwasi Kwarteng’s not-so-mini budget is certainly brave but also looks very high risk indeed. I trust that the promised detailed figures will underpin his calculations.”
The Treasury is understood to have based its analysis on the OBR forecast from March, with updated market prices.
As he announced his mini-budget, Chancellor Kwasi Kwarteng promised to “turn the vicious cycle of stagnation into a virtuous cycle of growth.”
He is proposing the largest tax cuts since 1988, which will be paid for by a significant increase in borrowing.
It is being seen as a major change of direction for the government under new Prime Minister Liz Truss.
It comes as the Bank of England warns the UK may already be in recession.
In a departure from Boris Johnson’s economic policies, Mr Kwarteng has scrapped plans to push up taxes to pay for public services with the aim of kick-starting the UK’s sluggish economy.
In a statement to the Commons, he said: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.
“This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s.
“We are determined to break that cycle. We need a new approach for a new era focused on growth.”
The government normally releases an independent forecast of how major tax changes will impact the economy, but Mr Kwarteng has opted not to do this, as his statement is not technically a Budget.
However, Mr Kwarteng promised the Office for Budget Responsibility would publish a full economic forecast before the end of the year, with a second to follow in the new year.
The Institute for Fiscal Studies thinks tank has published its own analysis, saying: “The government is choosing to ramp up borrowing just as it becomes more expensive to do so, in a gamble on growth that may not pay off.”
Mr Kwarteng confirmed a planned corporation tax increase from 19% to 25% would also be scrapped.
The chancellor also announced an increase to the threshold people in England starts paying stamp duty on home purchases to £250,000.
For first-time buyers, the threshold will rise to £425,000.
There are likely to be changes in income tax.
Mr Kwarteng confirmed the cap on bankers’ bonuses would be lifted and new investment zones would be established, where businesses would benefit from tax cuts and planning rules would be relaxed to encourage house building.
The cost of cutting these taxes is estimated at about £30bn a year.
The statement also included details of the cost of the government’s plan to cap energy bills for households and businesses.
Mr Kwarteng said these estimated costs were “particularly uncertain, given volatile energy prices” but based on recent prices the total cost of the package for the six months from October was expected to be around £60bn.
Chancellor Kwasi Kwarteng,has announced that the National Insurance increase from April will be repealed starting on November 6.
The 1.25% increase was put in place by the former chancellor Rishi Sunak, but Liz Truss promised to reverse it during the Tory leadership race.
Mr Kwarteng made the announcement ahead of a “mini-budget” on Friday.
He said: “Taxing our way to prosperity has never worked.
“To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this.”
The Treasury said most employees will receive a cut to their national insurance contribution directly via their employer’s payroll in their November pay, although some may be delayed to December or January.
They calculate that almost 28 million people will keep an extra £330 of their money on average next year, whilst 920,000 businesses are set to save almost £10,000 on average next year thanks to the change
In a tweet, Mr Kwarteng called it a “tax cut for workers”.
I can confirm that this year’s 1.25% point rise in National Insurance will be reversed on 6th November.
Its replacement – the Health and Social Care Levy planned for April 23 – will be cancelled.
The tax hike was put in place to help fix the NHS backlog and fund social care sector improvements. It was due to raise around £13bn per year.
However, Ms Truss argued it was wrong of her party to break its 2019 manifesto commitment not to raise taxes and said the extra funds can be raised through general taxation.
The chancellor confirmed today that the funding for health and social care services will be maintained at the same level as if the levy was in place.
MPs are expected to vote on repealing the health and social care levy once they return from party conferences in October.
“This is delivering on a commitment the PM made on the (Tory leadership) campaign trail,” a No 10 spokeswoman said.
The move comes ahead of Chancellor Kwarteng’s “fiscal event” on Friday when he will set out more details of the government’s plans to cut taxes, including scrapping a planned rise in corporation tax.
