Liz Truss expected to announce plans for immediate tax cuts in what will amount to emergency budget
Liz Truss is expected to attempt to hold a mini-budget and travel to the leaders’ summit of the UN general assembly in New York next week in the days after the Queen’s funeral.
Paul Johnson, the director of the Institute for Fiscal Studies thinktank, has said the government will have to come up with a better version of the energy price guarantee next year because the one announced by Truss last week is “incredibly expensive” and “totally untargeted”. In an interview with Times Radio he said:
It’s extraordinary that they didn’t publish a cost with the announcement. This could actually turn out to be the biggest single fiscal announcement in my lifetime, because this could cost £150bn.
Now, how much it costs in the end is, of course, enormously uncertain, because it depends on what happens to gas prices going forward. And it depends on how long this policy is in place.
One of the things that I really hope is that they’ve got teams of people working next year on thinking of something better for next winter because whilst this might be necessary this year, it’s incredibly expensive.
It’s totally untargeted. It gives large amounts of money to people who don’t need it, and it means that we’re not facing the price signal that there is less gas out there. And yet we’re being massively subsidised to use gas. So if it’s possible to come up with something better, which is better targeted, then we really ought to be doing it.
Simon Case is expected to keep his job as cabinet secretary under Liz Truss after previously having been expected to be ousted.
The EU has offered to reduce checks on goods crossing the Irish Sea into Northern Ireland to a “couple of lorries a day” in an effort to bring the UK back to the negotiating table in the Brexit dispute.
The King is in St Giles’ Cathedral in Edinburgh where a service is taking place to commemorate the Queen. Later he will be in the Scottish parliament to receive a motion of condolence from MSPs. This morning he spoke to MPs and peers at Westminster, after receiving addresses of condolence from them. There is full coverage on our separate live blog.
This is from the New Statesman’s Jeremy Cliffe on the politics of the new King. He is commenting on a tweet plugging an interesting pro-Charles article at Middle East Eye by Peter Oborne and Imran Mulla.
A new divide is emerging on the British right between the communitarian perennialism of Charles III & his acolytes and the Hayekian libertarianism of PM Truss & her Tufton Street hinterland. Will be fascinating to see how the two interact. https://t.co/zlwTuxpBRx
Charging an electric car at home will be about one-third cheaper under the government’s “energy price guarantee” compared with the planned price cap, PA Media reports. PA says:
The RAC said it will cost an average of £22.22 to fully charge an electric car with a 64-kilowatt hour battery – such as a Kia e-Niro – from 1 October under the new policy announced by Truss last week.
That is nearly £4 more than under the current price cap, but around £11.50 less than it would have done under the cap announced by regulator Ofgem on 26 August, which was due to come into force at the start of next month.
The “energy price guarantee” was announced byTruss last week amid growing concern about the impact of the planned rise in bills.
RAC electric vehicle spokesman Simon Williams said the measure will “significantly cushion the impact of rising energy prices affecting drivers of electric cars”.
Mark Drakeford, the Welsh first minister, says he was not told in advice that King Charles was going to use his address to the nation on Friday to announce that his son, Prince William, would succeed him as Prince of Wales. But Drakeford says he had a “very warm” conversation with the prince on Monday.
As the BBC reports, Drakeford says:
[Prince William] wanted to look forward, talk about the time he needs to take on the responsibilities, and fashion the job in the way that will be right for him and Wales in the 21st century.
It was a very warm conversation, Prince William was very keen to reflect on the time he and his family have spent in Ynys Mon. A period that clearly means a great deal to him and he looks back on with enormous fondness.
If Charles were to prove less popular as King than his mother was as Queen, would that increase support for independence in Scotland? Probably not, says Prof John Curtice, the leading psephologist. He explains why in a post on his What Scotland Thinks website. Here is an extract.
In short, support for the monarchy in Scotland is strongly associated with a wish to remain part of the Union – and it is this link that is probably a major explanation of the monarchy’s lower overall level of popularity north of the border.
However, that still leaves the question of the causal connection between the two. The polling evidence does not prove that attitudes to the Union are influenced by attitudes to the monarchy – rather than vice-versa. It certainly makes sense that someone who does not feel British, is convinced that Scotland would be economically better off as an independent country and would have more control over its own affairs should have doubts about retaining the monarchical connection.
But would someone who feels at least somewhat British, has severe doubts about the economics of independence, and is content with being outside the EU be likely to change their mind about retaining the Union because they have come to the conclusion that King Charles and/or his successors are not as good a monarch as the late Queen Elizabeth? It does not seem very likely.
Back to relations with the EU, and Charles Grant, director of the Centre for European Reform thinktank, says he thinks British officials are trying to persuade Liz Truss to accept an invitation to the first meeting of the European Political Community in Prague in October. The French president, Emmanuel Macron, proposed the group as a means of improving links between the EU and countries in Europe which are not members.
Although Liz Truss was sceptical about the European Political Community when I asked her about it at a conference in the summer, I have learned that senior UK officials are now trying to persuade her to go to Prague. @CER_EU https://t.co/CkzYePqh5Z
Earlier this year, when she was still foreign secretary, Truss told MPs that the UK was not keen on joining the new group.
In Belfast the Northern Ireland assembly, which has largely been suspended since the elections this year because the DUP blocked the election of a speaker because of its opposition to the Northern Ireland protocol, has been meeting today to hear tributes to the Queen.
Michelle O’Neill, the Sinn Féin leader in Northern Ireland and first minister designate, leads a party that is opposed to the rule of the crown in Ireland and that during the Troubles was seen as the political wing of the IRA, the terrorist group that murdered the Queen’s cousin, Lord Mountbatten. But today O’Neill paid tribute to the Queen, and particularly her contribution to reconciliation in Ireland. She said:
Today I wish to record the value and respect I place on the significant contribution Queen Elizabeth made to the advancement of peace and reconciliation between the different traditions on our island, and between Ireland and Britain during the years of the peace process … I recognise that she was a courageous and gracious leader.
O’Neill also recalled being present when the Queen shook hands with Martin McGuinness, the former IRA commander and then deputy first minister, in 2012. It was seen as a historic moment in the peace process. O’Neill said:
The important symbolism of these encounters by both sides was understood and designed to positively show leadership, and in a practical way give example towards reconciliation.
They were pointing to the peaceful future overwhelmingly endorsed by the people through their expressed support for the Good Friday agreement, while acknowledging the regrettable divisions and tragedies of the past.
All people in public life in Ireland should follow the Queen’s example, O’Neill argued.
[The Queen] made real efforts, and in good faith to build relationships with those of us who are Irish, and who share a different political allegiance to herself and her government, and who wish to exercise our right to self-determination based on consent to achieve reunification and a shared island for all.
There is an onus on us all in politics and public life, but also the whole community, to follow her example and strengthen the bonds of friendship that will bring people and communities together.
Micheál Martin, the taoiseach (Irish PM), has welcomed the comments from Maroš Šefčovič, the EU’s Brexit negotiator, about the Brusssels plan for changes to the Northern Ireland protocol could make the GB/NI border almost “invisible” for lorries. (See 10.08am and 10.59am.) Commenting on the Šefčovič interview with the FT, he said:
What Maroš Šefčovič is demonstrating is his flexibility, his desire to be solution driven and what you’re witnessing this morning is further solutions, proposed ideas around resolving the protocol issue.
I spoke with the British PM late last week. It was a preliminary discussion. We will meet again on these issues.
I do believe genuinely there’s a view across that we should do everything we can to resolve this issue …
[The] European Union and the UK really should sort this out so that we can focus on the bigger issues geopolitically that are facing the European Union and UK who are good partners on these more fundamental issues.
And here is a full summary of the main points from the No 10 lobby briefing.
The prime minister’s spokesperson signalled that MPs are likely to be recalled to parliament after the Queen’s funeral next week for the emergency “budget” promised by Liz Truss. This is where Kwasi Kwarteng, the new chancellor, will announce the reversal of the national insurance rise, and the temporary removal for green levies from energy bills, promised by Truss in the Tory leadership contest. She has also said that Kwarteng will finally reveal the cost of the energy price guarantee announced last week at this “fiscal event” (as No 10 is calling it). See 12.17pm.
The spokesperson played down reports suggesting that Joe Biden, the US president, could be banned from using a helicopter, and forced to travel by bus to Westminster Abbey, when he attends the Queen’s funeral next week. Politico published a report saying government guidance is for visiting dignitaries not to travel to the abbey using their own cars, and for helicopter transfers to be banned. But, when asked about the report, the spokesperson stressed that “arrangements for different leaders will vary” and that this was just guidance.
A minute’s silence will be held on Sunday at 8pm in honour of the Queen, the spokesperson said. He said:
At 8pm on Sunday 18 September, the night before the state funeral, there will be a one-minute silence where the public are invited to come together and observe a national moment of reflection to mourn and reflect on the life and legacy of Queen Elizabeth II.
The silence can be marked privately at home on your own or with friends and neighbours, out on your doorstep or street with neighbours, or at any locally arranged community events and vigils.
We encourage local community groups, clubs and other organisations to mark this moment of reflection. And if you are overseas, people are encouraged to mark the silence at their local time.
The spokesperson said commuters in London may want to “change their working patterns accordingly” because of the huge numbers of people expected to file past the Queen’s coffin during the lying in state in Westminster Hall.
The spokesperson confirmed that Truss’s government reshuffle had not finished. A small number of appointments have not been made, mostly ministers in the House of Lords, the spokesperson said. He said these had been put on hold during the period of national mourning.
The spokesperson refused to comment on reports suggesting that the bank holiday next week to mark the Queen’s funeral could help to push the economy into technical recession.
The spokesperson said Truss would not be commenting on developments in Ukraine because there was a limit to what she could say during the period of national mourning. But he referred reporters to the assessment from the Ministry of Defence.
Latest Defence Intelligence update on the situation in Ukraine – 12 September 2022
Find out more about the UK government's response: https://t.co/IISQBW8TQK
🇺🇦 #StandWithUkraine 🇺🇦 pic.twitter.com/QFOzJpanUr
The spokesperson declined to condemn the arrest of people who were protesting against the accession of King Charles III to the throne. Asked about the reports, he said he would not comment on operational decisions taken by the police. He went on:
Obviously this is a period of national mourning for the vast, vast majority of the country. But the fundamental right to protest remains. That’s a keystone of our democracy.
The Downing Street lobby briefing has just finished, and the prime minister’s spokesperson has strongly hinted that we will in effect get an emergency budget next week, where Liz Truss will announce her plans for immediate tax cuts.
Truss promised such an emergency budget during the leadership contest, and in her speech to MPs last week she said Kwasi Kwarteng, the chancellor, would be making a “fiscal statement” later this month. She refers to it as a “fiscal event” rather than a budget (perhaps because holding a formal budget would require the Office for Budget Responsibility to update its economic forecasts), but in practice it is going to be just like a normal budget – only much bigger.
The death of the Queen, which led to parliament being in recess this week, put those plans on hold. But at the lobby briefing, when asked if there would be a fiscal event next week, the spokesperson replied:
We are still planning to deliver a fiscal event this month. We would not do that in recess. Beyond that, we have not set out a date.
In practice, that means the emergency “budget” is pencilled in for next week. MPs could return to parliament after the Queen’s funeral a week today. Labour is having its party conference the following week, and the Conservatives are having theirs the week after (starting on Sunday 2 October), and so in practice next week is the only slot available because the Commons will be in recess for the two main conferences. When this was put to the spokeperson, he did not confirm this – but did not deny it either.
The Liberal Democrats were meant to be having their conference next week. But they have cancelled it, and the Commons was originally meant to be sitting early next week anyway.
UPDATE: I have corrected the post above because originally it said the Commons was meant to be in recess next week, during Lib Dem conference, but that is wrong. I’m sorry for the error.