A summary of today's developments
Liz Truss is expected to announce her plan to guard households and businesses against soaring costs while ramping up domestic energy supply. The new premier is expected to tell MPs on Thursday that domestic bills will be frozen at about £2,500 as part of a package to ease the cost of living crisis. The suggestion is it will be funded through borrowing, with Truss rejecting the idea of applying a windfall tax on the bumper profits made by oil and gas companies to cover the cost – reported to be up to £150bn. Labour has accused the PM of writing a “blank cheque” to the energy giants by ruling out the levy, with the British people left to “foot the bill”.
White House press secretary Karine Jean-Pierre said any efforts to undermine the Northern Ireland agreement would not create a conducive environment for trade talks between the United States and the UK.As an MP, the new British prime minister, Liz Truss, introduced legislation to undo the Northern Ireland protocol, which was part of Britain’s withdrawal agreement from the European Union.
The Queen has postponed her privy council meeting and has been advised by doctors to rest, Buckingham Palace has announced.
A palace spokesperson said: “After a full day yesterday, Her Majesty has this afternoon accepted doctors’ advice to rest.
“This means that the privy council meeting that had been due to take place this evening will be rearranged.”
During the proceedings, the new prime minister, Liz Truss, would have taken her oath as First Lord of the Treasury, and new cabinet ministers would have been sworn into their roles and also made privy counsellors, if not already appointed as one in the past.
Vladimir Putin, the Russian president, has said the process used in the UK to select Liz Truss as prime minister was not democratic. He said: “In the UK, the procedure for electing the head of state is far from democratic. It takes place within the framework of the party that won the previous parliamentary election. The UK people do not participate in the change of government in this case.”
Steve Baker, a former Brexit minister, is rejoining the government as a Northern Ireland minister. Will Quince becomes a health minister. James Duddridge becomes an international trade minister. Kelly Tolhurst becomes an education minister. Lady Williams of Trafford is the new Lords chief whip.
Nusrat Ghani has been made a minister in the Department for Business, Energy and Industrial Strategy, Downing Street said.
Kevin Foster has been given a role in the Department for Transport. Alec Shelbrooke MP was announced as a minister of state in the Ministry of Defence.
Robert Jenrick, housing secretary until he was sacked in 2021, becomes a health minister. Victoria Prentis becomes a welfare minister. Rachel Maclean becomes a justice minister. Julia Lopez becomes a culture minister again. And Michael Tomlinson becomes solicitor general.
Mark Drakeford, the Welsh first minister, was serving food to pupils today to publicise the Welsh government’s decision to start offering universal free school meals to the youngest primary school pupils this wee
Sir Stephen Lovegrove has been dropped as national security adviser by Liz Truss, in one of her first civil service appointments since taking over at No 10 on Tuesday. The veteran official will be replaced by career diplomat Sir Tim Barrow, best known as the former ambassador to the European Union who handed over the UK’s article 50 notice that triggered Brexit.
No 10 confirmed that Jacob Rees-Mogg will not be replaced as Brexit opportunities minister. Rees-Mogg will still address this agenda as business secretary, and ministers in other department will consider Brexit opportunities too, Downing Street said.
Key event
Ahead of Thursday’s announcement, Liz Truss acknowledged families and businesses across the country are concerned about how they will “make ends meet” over the coming months.
She blamed rising global prices on Russian president Vladimir Putin’s war in Ukraine and “weaponisation” of gas supply in Europe.
“This has only made clearer that we must boost our long-term energy security and supply,” she said.
“We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again.
“We will set out our plans to deliver on that promise and build a prosperous Britain for everyone.”
Downing Street said the new PM would set out a “bold plan of action to support people across the UK” while also “ramping up domestic energy supply”.
Liz Truss is expected to announce her plan to guard households and businesses against soaring costs while ramping up domestic energy supply.
The new premier is expected to tell MPs on Thursday that domestic bills will be frozen at about £2,500 as part of a package to ease the cost of living crisis.
The suggestion is it will be funded through borrowing, with Truss rejecting the idea of applying a windfall tax on the bumper profits made by oil and gas companies to cover the cost – reported to be up to £150bn.
Labour has accused the PM of writing a “blank cheque” to the energy giants by ruling out the levy, with the British people left to “foot the bill”.
Updated
During a Tory leadership hustings, Liz Truss had said “the jury is still out” on whether or not the French president, Emmanuel Macron, is a “friend or foe”.
It led Macron to respond that France and Britain would face “serious problems” if they could not say whether they were friends or enemies.
Alicia Kearns, a Conservative MP who sits on the foreign affairs select committee, told Sky News that Truss’s comment was “not a very sensible move”.
She said she could understand if Truss had given the same response on China but France is a “major ally”.
Updated
The new levelling up secretary will also serve as minister for the north, the Tory party chairman has said.
There was some doubt over whether Liz Truss would follow through on her reported pledge to create the position, with Labour and Cooperative MP Simon Lightwood calling for clarity.
In a letter to Truss, he said he hoped she had not “reneged” on her promises.
The Northern Research Group of Tory MPs previously said Truss, along with other leadership contenders, had signed up to its “northern agenda” pledges – which included creating the ministerial role.
Jake Berry, the new party chairman, later said Simon Clarke has assumed the post.
He told ITV’s Peston programme: “The prime minister’s been absolutely clear that she will have a fiscal event later this month, but, you know, we’ve got a levelling up secretary in Simon Clarke, who is also the minister for the north.”
Updated
On the government’s economic plans, Jonathan Reynolds, the shadow business secretary, has lamented it is “unfair” for households to bear much of the cost.
Reynolds told Sky News programme The Take it was “untrue” that the government could cut taxes and increase spending and that it will “pay for itself”.
He said the UK’s recent lack of growth has been due to a “lack of clear policy” and a “lack of consistency” from the government.
Reynolds said the Tories have a “belief that there’s a magic wand of cutting corporation tax and you can pay for that by supply side reforms” – which he said is “Conservative code for cutting employment rights and environmental protections”.
Updated
White House issues trade warning over NI protocol
White House press secretary Karine Jean-Pierre said any efforts to undermine the Northern Ireland agreement would not create a conducive environment for trade talks between the United States and the UK.
As an MP, the new British prime minister, Liz Truss, introduced legislation to undo the Northern Ireland protocol, which was part of Britain’s withdrawal agreement from the European Union.
It prioritised protecting the 1998 Good Friday Agreement, or Belfast Agreement, for peace in the British-run region.
The White House said on Tuesday that the US president, Joe Biden, and Truss “discussed their shared commitment to protecting the gains of the Belfast/Good Friday Agreement and the importance of reaching a negotiated agreement with the European Union on the Northern Ireland protocol.”
Updated
Conservative MP Theresa Villiers has acknowledged to Sky News there are “risks” that the prime minister’s approach to helping people tackle energy bills will lead to an increase in borrowing, but added: “This is an emergency.”
She said the UK had not seen an energy price shock like this since the 1970s. “In times of emergency, public finances are impacted, and there is simply no way to avoid that,” she said.
Villiers said she was sure the new prime minister would do her best to “minimise damage” to public finances.
Updated
Global heating could bring benefits, according to one of Liz Truss’s new advisers.
As onlookers seek to read the environmental signals being sent by Truss’s new appointments, there has been particular interest in the ideas of Matthew Sinclair, who published Let Them Eat Carbon in 2011.
With the subtitle “The price of failing climate policies and how governments and big business profit from them”, the book sets out to tackle what Sinclair calls “the burgeoning climate change industry”.
In the book, he argues that climate change policies “push up electricity bills, make it more expensive to drive to work or fly away on holiday, put manufacturing workers out of a job – they sometimes even make your food more expensive”. He worries that the money directed towards climate change is going into the pockets of special interest groups around the world, into “dodgy projects” and “entire new organisations in the public sector”.
Updated
Liz Truss discussed the energy crisis and Northern Ireland protocol in a call with the German chancellor, Olaf Scholz, No 10 has said.
A Downing Street spokesperson said: “The leaders discussed the energy challenges faced by the UK and its European partners as a result of [Vladimir] Putin’s illegal war. Both agreed on the importance of energy resilience and independence.
“The prime minister underlined the importance of ensuring democracy and freedom were upheld in Europe, and of protecting countries made vulnerable by Russia’s economic blackmail.
“The UK and Germany were important economic partners and the prime minister said she was keen to expand defence cooperation between the two countries.
“Discussing the Northern Ireland protocol, the prime minister was clear that her priority is protecting peace and stability in Northern Ireland and upholding the Belfast (Good Friday) Agreement.
“She stressed the importance of finding a solution to the fundamental problems with the text of the protocol as it stands.”
Updated
Mark Fullbrook, Liz Truss’s new chief of staff, has asserted his grip over Downing Street by bringing senior figures from his lobbying firm into No 10.
The political consultant, a former longtime colleague of the election strategist Lynton Crosby, was appointed to the most senior role in Truss’s team this week, having previously worked on the failed leadership campaign of Nadhim Zahawi.
Senior advisory roles in No 10 have now also gone to Mac Chapwell and Alice Robinson, both founding members of his lobbying firm, Fullbrook Strategies.
Gordon Brown has called on Liz Truss to “show up” for the poorest workers who are facing unpayable energy bills, and warned that the UK was facing “a winter wave of unprecedented need”.
As the new prime minister prepared to unveil her emergency support package for people who will struggle to afford spiralling heating costs, Brown said “doing the right thing is a matter of political will”.
The former Labour premier wrote in an article for the Guardian that while charities and food banks had stepped in to help the most vulnerable, the “last lines of defence” had been breached. “Only the government has the resources to end the unspeakable suffering caused by unpayable bills and unmet needs,” he said.
Ministers are to be given powers to overturn decisions by financial regulators, the government said, in a move backed by the former chancellor Rishi Sunak.
Treasury minister Richard Fuller said the policy would enable the government to intervene where there are “matters of significant public interest”.
MPs heard that the new chancellor, Kwasi Kwarteng, would take a final decision on how the powers will work later in the year, with an amendment to be tabled to the financial services and markets bill.
Shadow Treasury minister Tulip Siddiq said Labour “broadly supports” the bill but expressed concerns about “serious gaps” in the legislation.
She said the bill “does nothing to protect essential face-to-face banking services”, adding the most vulnerable people in society depended on these.
The bill received an unopposed second reading, and it will now face further scrutiny in the Commons.
Updated
Sir Iain Duncan Smith has announced he will stand to be chair of the House of Commons foreign affairs select committee.
The former Tory leader, who turned down a role in the Truss administration, said: “I am not afraid to speak out when the government is failing and I will assist the committee to hold the Foreign, Commonwealth, and Development Office to account.
“In these troubled times, I will ensure that the voice of the foreign affairs committee is heard.”
Updated
The government is considering withdrawing Avanti’s contract to run train services on the West Coast Mainline, as ministers insisted “all options” would remain on the table once the agreement ended.
Rail operator Avanti has run fewer than half of its normal services since 14 August and blamed the reduction on “unofficial strike action” by drivers.
Transport minister Trudy Harrison insisted restoring the service between London and Manchester to full strength was an “absolute priority” for the government.
In the Commons, she faced calls from Labour to strip Avanti of the contract when it expires in October.
The firm says it normally runs around 400 trains per week with drivers voluntarily working on their rest days – for extra pay – but that “dropped suddenly to fewer than 50”.
Updated
Alec Shelbrooke MP has been announced as a minister of state in the Ministry of Defence, Downing Street said.
Nusrat Ghani has been made a minister in the Department for Business, Energy and Industrial Strategy, Downing Street said.
Kevin Foster has been given a role in the Department for Transport.
Updated
James Cleverly has reaffirmed the UK’s “steadfast support” for Ukraine in his first call as foreign secretary.
The Foreign Office said he spoke to his Ukrainian counterpart on Wednesday.
In a statement shared on social media, Cleverly said: “I just spoke to Dmytro Kuleba in my first call as foreign secretary.
“I reaffirmed the UK’s steadfast support for Ukraine as they resist Putin’s barbaric invasion.
“What happens in Ukraine matters to us all and I will do everything possible to assist their fight for freedom.”
Updated
The Queen postpones privy council meeting after doctors' advice
The Queen has postponed her privy council meeting and has been advised by doctors to rest, Buckingham Palace has announced.
A palace spokesperson said: “After a full day yesterday, Her Majesty has this afternoon accepted doctors’ advice to rest.
“This means that the privy council meeting that had been due to take place this evening will be rearranged.”
During the proceedings, the new prime minister, Liz Truss, would have taken her oath as First Lord of the Treasury, and new cabinet ministers would have been sworn into their roles and also made privy counsellors, if not already appointed as one in the past.
The Queen, who was due to hold the meeting virtually, remains at Balmoral Castle in Aberdeenshire and the latest advice does not involve a hospital stay.
Updated
The Scottish government has had to cut £500m from existing budgets in order to raise public sector pay.
This includes reductions of £43m for education and £60m for the net zero, energy and transport budget.
The SNP’s acting finance secretary, John Swinney, said: “Difficult choices must be made. There is no unallocated cash. There is no reserve that has not been utilised. Every penny more on one policy is a penny less on another policy.”
Updated
The SDLP South Belfast MP Claire Hanna has raised questions about the policy direction of Liz Truss’s administration after the appointment of two senior European Research Group figures to the Northern Ireland Office.
Hanna said: “The appointment of another hardline Eurosceptic to a senior position in the Northern Ireland Office is a red flag when issues related to the protocol remain politically sensitive.
“Liz Truss has an opportunity to make the case for a negotiated resolution with the European Union in the interests of people across these islands. These appointments seem in stark contrast to that objective.
Privatising this issue to the DUP and ERG has not only failed in the past, it has brought down previous governments. Elevating Steve Baker to NIO in particular is an obnoxious decision that will send a destructive message to the European Commission and to parties in Northern Ireland.
“Liz Truss could have taken the opportunity to build bridges and make allies in the early days of her premiership. Instead she seems to be continuing down the diplomatically ignorant route of her predecessor.”
Updated
Here is some reaction from journalists in Northern Irland to the appointment of Steve Baker as a Northern Ireland minister. (See 5.40pm.)
From UTV’s political editor, Tracey Magee
Brexit ultra @SteveBakerHW has been appointed as Minister of State for Northern Ireland. He joins committed eurosceptic, & newly installed NI SoS, @chhcalling. The anti-Protocol parties will be pleased while the pro-Protocol parties will be deeply suspicious.
— Tracey Magee (@Tracey_utv) September 7, 2022
From the BBC’s Darran Marshall
The new Northern Ireland Minister @SteveBakerHW previously called for the Gov to trigger Article 16 in advance of May’s Stormont election. pic.twitter.com/uzrJ8GDWRX
— Darran Marshall (@DarranMarshall) September 7, 2022
That is all from me for tonight.
My colleague Nadeem Badshah is taking over now.
Updated
Process by which Truss became PM 'far from democratic', says Putin
Vladimir Putin, the Russian president, has said the process used in the UK to select Liz Truss as prime minister was not democratic.
Speaking in Vladivostok, he said:
In the UK, the procedure for electing the head of state is far from democratic.
It takes place within the framework of the party that won the previous parliamentary election.
The UK people do not participate in the change of government in this case.
Putin is right. The population of the UK is around 67 million, but only 172,437 Conservative party members were eligible to vote in the ballot that led to Truss becoming prime minister.
But, of course, Putin himself is about the last person qualified to lecture anyone on democratic propriety. He is a ruthless, homicidal autocrat who only wins “elections” himself because his opponents tend to end up in prison, or worse. He makes comments of this kind not because he is a champion of democracy, but because is keen to promote arguments that might undermine the moral authority of the west (which he considers to be based on bogus foundations).
Updated
Former Brexit minister Steve Baker becomes Northern Ireland minister
The reshuffle is still going strong. Downing Street has announced another round of minister of state appointments, and the Lords chief whip.
Steve Baker, a former Brexit minister, is rejoining the government as a Northern Ireland minister.
Will Quince becomes a health minister. He was an education minister, and he backed Rishi Sunak in the Tory leadership contest.
James Duddridge becomes an international trade minister. He was a whip.
Kelly Tolhurst becomes an education minister. She was a whip.
And Lady Williams of Trafford is the new Lords chief whip. She was a Home Office minister.
Updated
Micheál Martin, the taoiseach (Irish PM), has welcomed Liz Truss’s statement that she would prefer to resolve the dispute over the Northern Ireland protocol by negotiation. (See 12.34pm.) Speaking in Dublin, he said:
I look forward to be in a position to speak to the British prime minister within the next day or two.
I take heart from the prime minister’s comments that her preferred approach to the protocol is to have it resolved by negotiation. That is certainly our view also and that of the European Union.
Youngest primary school pupils in Wales start getting universal free school meals
Mark Drakeford, the Welsh first minister, was serving food to pupils today to publicise the Welsh government’s decision to start offering universal free school meals to the youngest primary school pupils this week. The initiative is part of a programme that is intended to ensure all primary school pupils get free school meals by 2024. This is part of the cooperation agreement between the Labour government and Plaid Cymru.
Drakeford said in a statement:
No child should go hungry. Families throughout Wales are under huge pressure because of the cost-of-living crisis and we are doing everything we can to support them. Extending free school meals to all primary schools is one of a number of measures we are taking to support families through this difficult time.
Updated
Mark Francois, the Tory former minister and prominent Brexiter, told journalists that he was impressed by what Liz Truss told the 1922 Committee about her intention to improve links with the parliamentary party. (See 4.53pm.) He said:
Impressive performance. Confident. Assured. Answered the questions directly. It was good.
As an overall impression, it was an impressive start and she was very good at understanding some of the real concerns of backbenchers, in terms of the way she was speaking, in terms of some of the changes at No 10, the way they’re going to inter-relate with colleagues.
Updated
Tim Barrow replaces Stephen Lovegrove as national security adviser
Sir Stephen Lovegrove has been dropped as national security adviser unexpectedly by Liz Truss, in one of her first civil service appointments since taking over at No 10 on Tuesday. The veteran official will be replaced by career diplomat Sir Tim Barrow, best known as the former ambassador to the European Union who handed over the UK’s article 50 notice that triggered Brexit.
The national security adviser is appointed personally by the prime minister, but there had been no immediate expectation that Lovegrove would shift jobs. Lovegrove had been in post since March 2021, and will become the prime minister’s defence industrial adviser – a new position – “until the end of this year”.
Lovegrove was a senior adviser to Truss’s predecessor Boris Johnson over Britain’s response to Russia’s invasion of Ukraine, taking a measured and relatively low key approach to the crisis. The new prime minister will have known him well from her time as foreign secretary, suggesting that in appointing Barrow Truss wants, at the very least, fresh input as the six-month long war drags on.
Truss said:
Sir Tim Barrow brings with him a huge wealth of experience safeguarding the interests and security of the British people around the world. This includes working on the UK’s response to Putin’s illegal war in Ukraine.
I would also like to thank Sir Stephen Lovegrove for his distinguished service as national security adviser. I am pleased he will continue to promote our thriving nuclear defence industry, working with key international partners to keep our people safe every day.
Updated
Liz Truss addressed Tory MPs at a meeting of the 1922 Committee this afternoon. According to Sam Lister from the Daily Express, she said she wanted to improve the links between No 10 and the parliamentary party.
Liz Truss has told Tory MPs at the 1922 her government is all about team work. She is moving the Whips Office back to No 12 Downing Street to keep closer links with the party
— Sam Lister (@sam_lister_) September 7, 2022
(New leaders normally say they want to improve relations with the parliamentary party. Sometimes it happens, and sometimes it doesn’t.)
Pound drops to lowest level against dollar since 1985
The pound has slipped to a new 37-year-low against the dollar after a rally for the US greenback, PA Media reports. PA says:
Sterling dipped as low as $1.1403 dollars on Wednesday afternoon, surpassing the trough of $1.1412 seen at the outset of the Covid-19 pandemic in March 2020.
It comes after the dollar continued its recent strong spell, which saw it hit a 24-year-high against the Japanese Yen earlier in the session.
The dollar has also closed in on a 20-year-high against the euro.
Andrew Bailey, governor of the Bank of England, highlighted the strength of the US currency during a Treasury committee meeting earlier on Wednesday, as he explained to MPs the recent weakness in the pound.
Truss urged to find green solutions to UK energy crisis
A coalition of environmental and faith groups has written to Liz Truss urging her to take strong action to tackle climate change, the energy crisis and the steep decline in the nation’s wildlife and habitats, my colleague Sandra Laville reports.
Protesters from Animal Rebellion, a group campaigning against dairy farming because of its impact on the climate crisis, threw paint over a wall at parliament earlier today. The police said 10 people were arrested for criminal damage.
Animal Rebellion activists hurl white paint at Houses of Parliament ahead of Liz Truss's debut PMQs https://t.co/tfcSxUFdBQ
— ITV News Politics (@ITVNewsPolitics) September 7, 2022
Updated
The SNP has been blocked from making oral arguments in the supreme court case over whether Holyrood has the power to hold an independence referendum, although it can make a written submission.
The party had requested the chance to put its arguments in person when the case is heard in London next month but the court ruled on Wednesday that it could only make a written submission of up to 20 pages and avoiding repetition of the Scottish government’s arguments.
In June Nicola Sturgeon announced that she had requested the lord advocate, Dorothy Bain QC, write to the supreme court asking it to establish whether the Scottish government had the necessary legal powers to stage a consultative referendum without Westminster approval.
The SNP’s application to intervene in the case has reinforced speculation that the Scottish government is concerned that Bain’s own submission wasn’t strong enough.
The court is due to hear arguments from both sides on 11 and 12 October, with a judgment possibly coming in the new year.
Updated
And we have had yet more minister of state appointments.
Jesse Norman returns to government as a Foreign Office minister. Norman was a Treasury minister until he was asked to resign in September last year because Boris Johnson wanted more diversity in government.
Leo Docherty also becomes a Foreign Office minister. He was a defence minister.
Tom Pursglove remains as a Home Office minister.
Jeremy Quin becomes a Home Office minister. He was a defence minister.
Jackie Doyle-Price becomes a business minister. She had been a backbencher, but she supported Liz Truss in the Tory leadership contest.
Conor Burns becomes an international trade minister. He had been a Northern Ireland minister.
And Mark Spencer becomes an environment minister. He had been leader of the Commons, and so he has been demoted.
Updated
Here is a Guardian graphic showing the winners and losers in the cabinet reshuffle.
Robert Jenrick returns to government as health minister
Downing Street has announced another tranche of ministerial appointments. They are all ministers of state (non-cabinet ministers, but more senior than parliamentary under-secretaries of state, who are at the most junior rank) except the solicitor general.
Robert Jenrick, housing secretary until he was sacked in 2021, becomes a health minister. Jenrick backed Rishi Sunak for the Tory leadership, and so this appointment boosts Truss’s claims that she is including all factions in the party in her government.
Victoria Prentis becomes a welfare minister. She was a farming minister, and she had also backed Sunak in the Tory leadership contest.
Rachel Maclean becomes a justice minister. She was minister for safeguarding until she resigned in July, as part of the walkout by ministers who had lost faith in Boris Johnson.
Julia Lopez becomes a culture minister again. She had been at the Department for Digital, Culture, Media and Sport until July, when she also resigned in protest against Johnson.
And Michael Tomlinson becomes solicitor general. He had been a whip.
Updated
Truss's cabinet most privately-educated since John Major's, says Sutton Trust
Liz Truss has appointed a higher proportion of cabinet ministers who attended private schools than even Old Etonian Boris Johnson, according to figures collected by the Sutton Trust. Hers is the most privately-educated cabinet since John Major’s.
The trust - which campaigns on widening access to education - found that 68% of the new cabinet were educated at fee-paying schools. That is a higher proportion of privately educated cabinet ministers than Johnson’s first cabinet (64%), and more than twice that of Theresa May’s 2016 cabinet (30%), and more than both Cameron’s 2015 cabinet (50%) and the 2010 coalition cabinet (62%).
Only 19% of Truss’s first cabinet attended a comprehensive - including Truss herself - which is lower than the 27% in Johnson’s first cabinet.
The Sutton Trust noted:
The prime minister herself was comprehensively educated, but some of those heading up key departments – including the foreign secretary, the home secretary and the education secretary – are among those educated at independent schools.
The proportion of independently educated ministers attending cabinet is less than earlier cabinets under Conservative prime ministers, John Major (71% in 1992) and Margaret Thatcher (91% in 1979). Tony Blair and Gordon Brown both had 32% of those attending cabinet privately educated, while 25% of Clement Attlee’s first cabinet had been privately educated.
Of the 31 ministers attending Liz Truss’s new cabinet, 35% went to Oxford or Cambridge universities. This compares with 27% of all Conservative MPs, 18% of Labour MPs and 21% of all MPs. 29% of Truss’s cabinet were educated at other Russell Group universities (excluding Oxbridge). 26% of the new cabinet went through a ‘pipeline’ from fee-paying schools to Oxbridge.
Truss continues the academic dynasty at Number 10 that stretches back to the start of second world war: except for Gordon Brown, every prime minister since 1940 who attended university was educated at Oxford.
Updated
Truss accused of evading scrutiny as MPs told energy bills announcement being made in debate, not ministerial statement
Liz Truss is to present her plans for cutting energy bills as a general debate on the subject, rather than the normal ministerial statement, with Labour saying this could allow her to evade proper scrutiny.
Making a brief statement on business for Thursday, Penny Mordaunt, the new leader of the Commons, outlined the plan.
Thangam Debbonaire, her Labour shadow, questioned the choice, noting that the format of a ministerial or prime ministerial statement means that the person presenting it, in this case Truss, would have to answer repeated questions from MPs. A debate means she will most likely only speak once, at the start.
Debbonaire also noted that unlike with a statement, there is no need for the government to provide any details of the policy to the opposition or MPs in advance.
Mark Harper, the Tory former chief whip, then spoke to request that MPs get proper sight of the plan.
Mordaunt said she would “make representations” about this to the business and energy department, which is leading on this.
Earlier, at PMQs, Truss said she would unveil her plans for dealing with the energy bills crisis tomorrow.
Updated
No dedicated Brexit opportunities minister being appointed to replace Rees-Mogg, No 10 says
Here are the main points from the post-PMQs Downing Street lobby briefing.
The PM’s spokesperson said the government will keep the current windfall tax on energy companies introduced by Rishi Sunak earlier this year – but that no further windfall tax will be introduced. He said:
The Prime Minister is clear that we will not be introducing any further taxes in this space, given that we want to see broader investment in domestic oil and gas production as a transition fuel during this current global crisis we face.
The spokesperson would not say whether the bill of rights, which has been shelved (see 12.45pm), would be reintroduced in the current parliament. He said:
A new secretary of state will consider all policies in their area, that will include ongoing bills proceeding through parliament. This is no different.
No 10 hinted that the ban on fracking will be lifted this week. During the leadership contest Truss said: “I support exploring fracking in parts of the United Kingdom where that can be done”. Asked if the fracking ban would be lifted this week, the press secretary would not comment on the announcement tomorrow, but he said Truss made her views clear during the campaing. This is from LBC’s Ben Kentish.
Interesting. Liz Truss’s Press Secretary says the new PM will stick to the Conservatives’ 2019 manifesto promises, saying: “The manifesto stands.” Repeats this line when asked about fracking, which Liz Truss has suggested she would lift the ban on. Here’s what the manifesto said: pic.twitter.com/lw69sx51HX
— Ben Kentish (@BenKentish) September 7, 2022
The spokesperson said Truss was still deciding whether or not to appoint an ethics adviser to replace Lord Geidt, the independent adviser on ministers’ interests (to give him his formal title) who resigned when Boris Johnson was PM. The spokesperson said:
The prime minister wants to consider the best way to achieve the functions of that role, that level of oversight, and to ensure the government is held to the highest standards as the public expect.
No 10 said the government had abandoned the move to put Tory MP Sir Christopher Chope onto the privileges committee, which is investigating whether Johnson misled MPs over Partygate, because this was a decision for the new chief whip. Chope was meant to fill a space created by the resignation of Tory MP Laura Farris from the committee before the summer recess. The move was controversial because of suspicions that Chope might try to obstruct the inquiry.
No 10 confirmed that Jacob Rees-Mogg will not be replaced as Brexit opportunities minister. Rees-Mogg will still address this agenda as business secretary, and ministers in other department will consider Brexit opportunities too, Downing Street said.
PMQs - verdict from Twitter commentariat
And this is what other journalists and commentors are saying about PMQs. Mostly people were just glad to hear the two main party leaders have a proper argument about policy.
From my colleague Rafael Behr on PMQs.
That's a more substantial exchange of opinions on actual policy than we've had in pmqs for a while. Low bar, I know, but it's definitely an improvement.
— Rafael Behr (@rafaelbehr) September 7, 2022
So strategic lines clear. Truss is betting that politics of tax will cycle back to April 1992 and Starmer is Neil Kinnock. Starmer is betting that it'll be more late-era Major and Tory brand is contaminated by arrogance of power and callous indifference to poverty.
— Rafael Behr (@rafaelbehr) September 7, 2022
From Global’s Lewis Goodall
Weirdly, though neither are the most electric of performers, that was the most sharply focussed ideological clash we've seen at PMQs for some time. Which is exactly what many Tory MPs wanted.
— Lewis Goodall (@lewis_goodall) September 7, 2022
Ideological contours on display as we haven’t seen for some years. But should also remember that tonororw Liz Truss is going to announce borrowing and an intervention on a beyond Corbyneseque scale. Everything is still in flux.
— Lewis Goodall (@lewis_goodall) September 7, 2022
From my colleague Nesrine Malik
Reckon with that Truss has given the right wing media and the pundits enough for a coronation. Watch the front pages tomorrow.
— Nesrine Malik (@NesrineMalik) September 7, 2022
From the New Statesman’s George Eaton
"I am against a windfall tax."
— George Eaton (@georgeeaton) September 7, 2022
Truss positions herself to the right of Margaret Thatcher (whose government imposed windfall taxes on banks and oil firms). #PMQs
Contrary to what Truss suggests, there was only one year in which the cost of the corporation tax cut was matched by the rise in investment. #PMQs pic.twitter.com/4qOQVaOswQ
— George Eaton (@georgeeaton) September 7, 2022
From Global’s Jon Sopel
Can’t help feeling Labour will be taking a deep gulp after #PMQs. @trussliz looking sure-footed, with some zinger one liners. And no shortage of intellectual self confidence.
— Jon Sopel (@jonsopel) September 7, 2022
From my colleague John Crace
Truss making huge mistake of answering questions at PMQs
— John Crace (@JohnJCrace) September 7, 2022
From Sky’s Sophy Ridge
People might have been expecting less fireworks between Truss & Starmer at #pmqs but the clear blue water between their two ideologies is there for anyone to see...
— Sophy Ridge (@SophyRidgeSky) September 7, 2022
From the Sun’s Harry Cole
Some pretty clear blue water here. Truss sticking to her low tax growth guns. Starmer seems almost surprised.
— Harry Cole (@MrHarryCole) September 7, 2022
From the Mirror’s Kevin Maguire
Big #PMQs takeaway is a thick red dividing line is Truss will borrow, add debt, to fund an energy package while Starmer would fund one at least in part with a windfall tax on excess profits.
— Kevin Maguire (@Kevin_Maguire) September 7, 2022
From the FT’s Robert Shrimsley
First PMQs for a while in which both leaders argued the case for their competing economic ideas. Rather liked it.
— robert shrimsley (@robertshrimsley) September 7, 2022
PMQs - snap verdict
Every former prime minister says that taking PMQs is the most scary ordeal of the week and, even after 10 years in post, people like Margaret Thatcher and Tony Blair regarded it as one of the ultimate challenges of the job – an encounter when a few wrong words could spell disaster. For any new prime minister, the first question is, are they up to it? And Liz Truss clearly is. She looked like a prime minister, she performed reasonably well, and she even managed a decent joke (on Labour leaders and north London – see 12.20pm.) It was not a triumph, but it was not a catastrophe either, and on day one that is a bonus.
Truss also marks a very welcome change from Boris Johnson, in that (for the most part) she was willing to answer questions, and engage in an argument about policy and ideas. This, of course, is what is meant to happen. But for the last three years we have been governed by a prime minister much more interested in politics as performance and entertainment, and so it is refreshing to tilt back to ideas.
But that is where the whole encounter was less positive for Truss. She won the Conservative leadership contest on a low-tax, small-state agenda that put her well to the right of any Tory leader for a generation. Truss has always been a libertarian (it’s why she joined the Liberal Democrats at university), but during the summer it was never entirely clear to what extent she was just pandering to her party’s cruder, Thatcherite instincts. But now we know; it’s worse than that (to quote an old Westminster joke) – she really does believe it.
Starmer exposed this clearly with questions that illuminated what may become the key dividing line in British politics. Truss has already shifted on to Labour territory by conceding the need for a price cap of some sort on energy bills. But while Labour is proposing to fund this through a windfall tax, Truss is resisting this and today she dug in firmly on this point, declaring categorically that a windfall tax would be wrong. Starmer said this was prioritising the interests of an industry making £170bn in profits and that as a result she was going for “more borrowing than is needed”, with taxpayers paying the price for years to come.
Maybe you can win a general election on this sort of purist, ideological Laffer curve worship? But it seems extremely unlikely. Tories like Rishi Sunak believe the claim that tax cuts alone will always promote growth is nonsense, and even figures in the energy industry are finding it hard to justify their excessive profits. Starmer did not put on a particularly flashy performance, but he sounded much closer to where the public opinion is on these issues and ultimately that is what matters.
Truss also had no convincing answer to the question posed to her by several MPs: how could people trust her to sort out the nation’s problems when she had been in government for the past 10 years? (Boris Johnson did not have this problem, because he was out of parliament for most of the David Cameron era, and he resigned from Theresa May’s government.) Starmer summed this all up in his final question. He told Truss:
The prime minister claims to be breaking orthodoxy but the reality is she’s reheating George Osborne’s failed corporation tax plans - protecting oil and gas profits and forcing working people to pay the bill.
She’s the fourth Tory prime minister in six years - the face at the top may change but the story remains the same.
There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory prime minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory prime minister who when asked: who pays? says: ‘It’s you, the working people of Britain’?”
In response Truss said there was “nothing new about a Labour leader who is calling for more tax rises” and that Starmer was just offering “the same old tax and spend”. It demonstrated that she can think on her feet, but that won’t help much if voters conclude that what Starmer is saying makes more sense.
Updated
Bill of rights bill to be shelved
The government is shelving the bill of rights bill, my colleague Jesssica Elgot reports. Whitehall sources say it needs a comprehensive rewrite.
This was the legislation drafted by Dominic Raab that was intended to give British courts more leeway to diverge from European court of human rights rulings.
Whitehall source says government is pulling second reading of the bill of rights - describes it as a "total mess" and that it needs a radical overhaul to stop it being vulnerable to multiple amendments
— Jessica Elgot (@jessicaelgot) September 7, 2022
Truss says she is committed to following through on the early years agenda championed by Dame Andrea Leadsom.
Updated
Helen Hayes (Lab) asks if the government will publish an action plan to deliver for vulnerable children before the end of the year – yes or no?
Yes, says Truss.
Truss says online safety bill needs 'tweaks' so it does more to protect free speech
Sir Jeremy Wright (Con) asks for an assurance that the online safety bill will come back to the Commons.
Truss says it will come back, but there are some issues she wants to address. Some “tweaks” may be required to it, she says, to ensure it does more to protect free speech.
Updated
Rachel Hopkins (Lab) asks why people should trust Truss to deliver on the NHS when she has been in government while the problems have been created.
Truss accuses Hopkins of “talking down” the NHS. The NHS is recovering from the problems caused by Covid, she says.
Shailesh Vara (Con), who was sacked as Northern Ireland secretary last night, asks Truss to commit to proceeding with the Northern Ireland protocol bill if the EU does not compromise.
Truss says she wants a negotiated solution. But she will not allow this to drift. Her priority is protecting the supremacy of the Good Friday agreement.
Tony Lloyd (Lab) says child poverty has been growing. Can Truss promise that no child will have to go to bed in a cold, damp house?
Truss says that is why the government wants to ensure people can afford their energy bills, and why it wants to tackle the long-term supply issues.
Updated
Dame Caroline Dinenage (Con) asks if the government will pursue a strategy for child cancer.
Truss says the government will proceed with a strategy on this.
Helen Morgan (Lib Dem) says waiting hours for an ambulance has become normal. But we have had three health secretaries in three months. Will the PM get the CQC to investigate what is causing the problem?
Truss says people should not have to wait this long. The new health secretary is working on this, she says.
Nicholas Fletcher (Con) asks Truss if she will keep Doncaster-Sheffield airport open.
Truss says regional airports are vital. The transport secretary will look at this, she says.
Alex Davies-Jones (Lab) says Truss does not have the support of the public. Will she do the decent thing and call an election?
Truss says we are facing serious problems because of Putin’s war. The British people want a government that will sort it out. That is what she will do.
Updated
Keiran Mullan (Con) says Truss should show her commitment to levelling up by hosting Great British Railways in Crewe, his constituency.
Truss says she will focus on levelling up. But she cannot make a commitment on Great British Railways.
Martyn Day (SNP) asks what Truss will do to protect energy-intensive industries.
Truss agrees that the government needs to help these industries. The energy secretary is looking at this, she says.
Victoria Atkins (Con) asks about the 1.5 million households reliant on heating oil. They are not included in the price cap. Will they be included in the energy package.
Truss says many of her constituents rely on heating oil too. She wants to ensure the energy plan helps everyone.
Hannah Bardell (SNP) asks why her constituents should have faith she can suffer the “ongoing humanitarian crisis” caused by the energy crisis. And will Truss be as “corrupt” as her predecessor?
Sir Lindsay Hoyle, the Speaker, asks Bardell to withdraw the word corrupt.
Bardell says: “Sometimes the truth hurts, but I’m happy to withdraw.”
Updated
Sir Peter Bottomley (Con), the father of the house, asks why the planning inspectorate can overturn council decisions to protect the green belt.
Truss says there is not enough power in local hands. She says she wants the housing secretary to stop the planning inspectorate having too much power to overrule councils.
Rushanara Ali (Lab) mentions a string of public service failures. Truss has served in the governments that caused this mess. Why should people trust her to solve them?
Truss says she will sort out problems. There is an issue with energy, caused by the war in Ukraine, and she will address that. She will also address the economy and the NHS.
Theresa May, the former Tory PM, asks Truss why she thinks all three female prime ministers have been Conservative.
Truss says that is a fantastic question. She looks forward to calling on May for advice. She says it is extraordinary that Labour cannot find a female leader, or even a leader who does not come from north London.
Updated
Colum Eastwood, the SDLP leader, says people in Northern Ireland are starving and freezing. But the DUP are refusing to form a government that could address this. Whose side is she on?
Truss says she wants to work with all sides to get the executive back up and running. But they need to fix the problems with the protocol to achieve this.
Updated
Ian Blackford, the SNP leader at Westminster, says Truss’s reputation for straight talking has fallen apart. After nine questions she has still not said who will pay for the energy plan. Will she freeze energy prices and pay for it by a windfall tax?
Truss says it won’t be paid for by an energy tax. She does not believe you can tax your way to growth.
Blackford says Truss has failed to rule out a Truss tax on households and businesses, instead of targeting the profits of multinationals. She says the costs of the energy package must not be passed on to consumers through deferred rises in bills.
(According to the latest reports, that is not Truss’s plan. She wants to pay for this through borrowing, paid by future taxpayers, not by deferred increases to energy bills.)
Truss says Blackford must make up his mind what she wants.
Derek Thomas (Con) asks what Truss will do to ease energy costs for businesses.
Truss says the package announced tomorrow will do just that.
Starmer says Truss is reheating George Osborne’s policies. There is nothing new about trickle-down economics. He says Truss nodded through all the decisions that created this situation.
Truss says there is nothing new about a Labour leader calling for tax rises. Starmer does not understand aspiration. He does not understand aspiration and opportunity, she says. She will take immediate action to ensure we have lower taxes, to grow the economy.
Updated
Starmer says Truss is choosing to hand water companies polluting the rivers a tax cut. And banks are getting a tax cut. Companies doing well are getting a £17bn tax cut, while stroke victims wait an hour for an ambulance and criminals walk the streets with impunity. Why does she think it is right to protect Shell’s profits and to give Amazon a tax break?
Truss says she is on the side of people who work hard. She will deliver jobs and opportunities.
Updated
Starmer asks how much the corporation tax cut would hand to companies.
Truss says Starmer is looking at this the wrong way. The last time corporation tax was cut, revenue went up, because more countries wanted to locate here. She says putting up corporation tax will deter investment.
Starmer says Truss is proposing “more borrowing than is needed” because she is ruling out a windfall tax and taxpayers will pay, for generations to come.
Truss says the country cannot tax its way to growth.
Updated
Starmer says the energy industry will make profits of £170bn over the next two years. With an energy package, the question is, who will pay? Will Truss really leave it to consumer?
Truss says she will make an announcement on this tomorrow. But we cannot just deal with today’s problems. We need to address the energy supply. That is why she favours getting more energy from the North Sea, and more from nuclear, which Labour opposes, she says.
Updated
Keir Starmer congratulates Truss on her appointment. When she said in the leadership campaign she was against windfall taxes, did she mean it?
Truss welcomes Labour’s support against Russia, and she says she hopes it continues.
She says she is against a windfall tax. It would deter companies from investing in this country when the economy needs to grow.
Theresa Villiers (Con) asks about a pub in her constituency facing a 600% rise in its energy bill. Will Truss’s energy plan help the hospitality industry?
Truss says the hospitality industry is crucial. Her energy plan will help businesses as well as individual households, she says.
Paulette Hamilton (Lab) welcomes Truss to her place. She says it is her first PMQs too. She quotes Truss saying (in the clip leaked to to the Guardian) that British workers lack graft. But in her Birmingham constituency families are living in poverty. Does the PM think those parents should just put in more graft?
Truss says she is determined to make sure we have an economy with high wages and high-skill jobs. She will do that by reducing taxes and boosting economic growth.
Updated
Liz Truss starts by saying she is honoured to take her place as PM. She is determined to deliver for everyone in the UK, and she will work constructively will all MPs to tackle the challenges we face, she says.
From Tom Harwood from GB News
Theresa May claiming her seat early ahead of PMQs today.
— Tom Harwood (@tomhfh) September 7, 2022
Few expect Boris to turn up today, but I’ve been told his predecessor is worried that now as a backbencher he might nab her special post-PM seat on the Green Benches.
Here is the list of MPs down to ask a question.
Liz Truss has entered the chamber, to cheering from Tory MPs (but not raucous cheering).
Truss to face Starmer at PMQs for the first time
Liz Truss is about to go up against Keir Starmer at PMQs for the first time. Many people find PMQs a shallow, noisy spectacle which is largely irrelevant to the political problems facing the country, but to MPs it is important because they want to see their leaders put on an authoritative performance (or “win”, ideally).
Truss is bound to get loud cheering when she arrives, because MPs are a tribal species and that’s what they do with new leaders (especially Tories). But Truss is the first Tory leader to be elected by a ballot of members who was not the first choice of her MPs, and by the end of August more than half of her MPs had still not pubicly endorsed her for leader. Much of the support she has will be conditional.
Kwasi Kwarteng, the new chancellor, has been meeting City figures this morning to discuss the government’s pro-growth agenda.
Great to meet market & City leaders this morning.
— Kwasi Kwarteng (@KwasiKwarteng) September 7, 2022
I set out Prime Minister @trussliz's new, pro-growth economic approach, including immediate support for families and businesses to tackle the cost of living and a commitment to fiscal sustainability. pic.twitter.com/M04FF8TwOv
At the Treasury committee Andrew Bailey, the governor of the Bank of England, confirmed that he would be meeting Bailey this afternoon. He said there was no agenda for the meeting, implying it would be wide-ranging.
Rebates, rather than price cap, would be better and cheaper way to tackle energy bills criss, says Tony Blair's thinktank
Liz Truss is expected to announce some sort of freeze for energy bills tomorrow. In doing so, she will be playing catch-up with the main opposition parties. Keir Starmer published a plan in August showing how Labour would fund a price freeze which he said would mean consumers not having to pay “a penny more” this winter. But Ed Davey, the Lib Dem leader, published his own proposals for a price freeze a week earlier, and Gordon Brown, the former Labour prime minister, released his own blueprint, which included the option of energy companies being nationalised. The SNP has also called for prices to be frozen.
But another former Labour prime minister, Tony Blair, has come out against a price freeze. His thinktank, the Tony Blair Institute for Global Change, has this morning published its own plan for addressing the energy bills crisis and it proposes using rebates to help people with bills, not a price cap, with households on benefits getting the most support.
The report says:
It now appears that government is also considering some form of price freeze. Such an approach could meet the scale of the challenge facing householders head-on and would deal with the crisis this winter. But it is now clear that the crisis will last into next year and probably beyond, and over time the costs of such a freeze, if kept in place, would be fiscally alarming.
A longer-term price freeze would also dampen incentives for households – especially the better-off ones – to cut their consumption where they reasonably can. While we all hope that price pressures will abate, it is conceivable that they won’t fall sufficiently to make government support unnecessary beyond this winter or beyond next year. If a price freeze is pursued, this makes coupling it with a large programme of demand reduction essential.
But we favour a more strategic approach to this crisis that offers long-term certainty to households while strengthening incentives on them and government to accelerate steps towards the only real solution, which is a reduction in demand and in reliance on unpredictable energy imports.
For these reasons, whatever the merits of a short-term freeze on prices, we propose instead a long-term system of rebating households the difference between a £2,000 threshold (roughly the level of today’s price cap for a typical household), and the future price cap for the typical household. Paying support as a lump-sum rebate ensures that people continue to have the full incentive to cut their bills; calculating it using the price cap means that households do not receive more support the more energy they use. For households on benefits, the rebate should be 100 per cent of the difference. For all other households the rebate could be discounted to, for example, 75 per cent of the difference.
The thinktank says its plan could cost £92bn over a full year, while a price cap could cost around £110bn.
Thérèse Coffey, the new health secretary and deputy prime minister, has an 8am alarm on her phone to the tune of Dr Dre, LBC’s Nick Ferrari discovered this morning.
Updated
Jonathan Isaby, Priti Patel’s communications private secretary, has left his post the day after the home secretary announced her resignation. Late last night he changed his title on LinkedIn.
Isaby was employed as a civil servant, but his departure alongside Patel’s will reinforce claims that his appointment was party political and that, if Patel wanted him on the payroll, he should have been working as a special adviser.
Isaby, the former chief executive of the Taxpayers’ Alliance, was appointed to the government role in August 2021. Despite his background as a prominent Tory journalist/activist, Isaby was on the civil service payroll.
His appointment was strongly criticised by members of the opposition, with Nick Thomas-Symonds, shadow home secretary, saying Patel and Isaby’s personal political ties showed it was “one rule for the Tories and their mates, and another for everyone else”.
Fracking not solution to energy crisis, says chair of Committee for Climate Change
According to a report by Jason Groves in the Daily Mail, Liz Truss may announce an end to the ban on fracking this week. During the leadership campaign she said she wanted to allow fracking, but only in areas where there was a clear public consensus in favour.
On the Today programme this morning Lord Deben, the Tory peer who chairs the Committee for Climate Change, said fracking was not a solution to the UK’s energy problems. He explained:
The price of gas is not affected by the relatively small amount that we can get, in addition to the North Sea or indeed from fracking.
This is an international price and we would be paying the same price we got out of the fracked gas as we are for the gas we’re using now.
There is no sliver of cigarette paper between the fact that if you want a deal with climate change and you want a deal with the cost of living crisis and oil and gas prices, you have to do the same thing.
Renewable energy and energy efficiency, they are the answers.
The first meeting of Liz Truss’s cabinet is over. Here are pictures of some of the new ministers leaving No 10.
BoE governor says he is open to Truss's plan for review of its mandate, but rejects suggestions current system not working
Angela Eagle (Labour) is asking the questions now. Referring to the pledge from Liz Truss during the Tory leadership contest to review the mandate of the Bank of England, she asks Andrew Bailey if he thinks it is outdated.
Bailey says the inflation target is very important. He says over the last 25 years, since the Bank was made independent, on average inflation has been on target. The current situation is different, he says, because the country is facing such a big shock. He says that “does not suggest that the regime has failed”. But he says the regime must respond to the current shock.
He says it is “good practice from time to time to have reviews”. But he goes on:
This is not a recognition of the fact the regime is in some sense failing.
BoE governor sidesteps questions at Treasury committee about whether energy bills package might be inflationary
At the Treasury committee Mel Stride asks Andrew Bailey if he is worried about sterling.
Bailey says it is not for him to comment on what fiscal policy will be. But he says he welcomes the fact that there will be announcements this week. That will frame policy, he says. It is important for markets to understand what is happening.
Q: Why are markets getting worried about UK debt, and wobbly about the pound?
Bailey says a number of things are going on.
On the exchange rate, other factors are at work. The dollar is strong against all currencies, he says. The Federal Reserve are not in the same situation as the Bank of England and the ECB. They are responding to a demand shock.
But there are UK factors, he says.
The UK is “heavily exposed to gas prices”, he says.
Q: Are the markets worried about the magnititude of what might be done? That is might be inflationary?
Bailey says it is important to have policy laid out clearly. That will happen. He welcomes that, he says.
(It sounds like he is avoiding the question.)
Updated
Andrew Bailey, governor of the Bank of England, and some of his senior colleagues have just started giving evidence to the Commons Treasury committee. Mel Stride (Con), the committee chair, started by asking about the Goldman Sachs forecast that inflation in the UK could reach 22%. Huw Pill, chief economist at the Bank, did not dismisses the forecast. Without formally endorsing it, he said he was “plausible”.
New cabinet 'represents depth and breadth of talent' in Tory party, No 10 says
This is what Liz Truss’s press secretary told reporters late last night about the composition of the cabinet. Like Thérèse Coffey (see 9.12am), he also dismissed claims that it was just a cabinet of cronies. He said:
The prime minister has appointed a cabinet which represents the depth and breadth of talent in the Conservative party. Containing no fewer than five other candidates from the recent leadership election, this is a cabinet which will unify the party, get our economy growing and deliver for the British people.
The cabinet ministers who stood as leadership candidates are: Penny Mordaunt (leader of the Commons), Kemi Badenoch (international trade), Suella Braverman (home secretary), Tom Tugendhat (security minister – attending cabinet, but not a full member) and Nadhim Zahawi (Cabinet Office).
The only candidates who aren’t included are Jeremy Hunt and, of course, Rishi Sunak. Sunak had made it clear that he disagreed so much with Truss’s economic policies that he would not be able to serve under her, so his exclusion is understandable. But Truss could have decided to keep some of his most prominent supporters, and instead most of them were sacked last night.
Freezing energy bills helps richer people most, says IFS director Paul Johnson
Freezing energy bills would help richer people the most, Paul Johnson, director of the Institute for Fiscal Studies, told the Today programme this morning.
Liz Truss is expected to announce a price freeze when she publishes her energy bills plan, probably tomorrow. It will reportedly cost in the region of £100bn.
Johnson said a price freeze on its own would be poorly targeted. He explained:
If this is a straightforward bill freeze then the majority of the money will go to better-off people who use more energy.
So this is very poorly targeted. Not only is it poorly targeted, but it also means that we don’t see the full price signal, that across the world people need to see.
The reason that gas prices are so high is because there’s less gas around and if the world doesn’t use more gas over the net year then we’re going to run out.
Finding a way of targeting it to the many millions that really need it, without giving it to the many millions who don’t, appears to be something that has stumped the Treasury and the government for finding a mechanism of achieving that.
Johnson also said the government could afford to borrow £100bn. He told the programme:
We can afford to borrow that amount. We’re still managing to borrow relatively straightforward on the international markets.
But he warned that freezing energy bills could cost even more in the long term.
The big question here is: ‘Is it going to be 100bn? What is the exit strategy from supporting bills?’
My guess is it might end up being an awful lot more than that unless we react quite quickly to make it a better system.
Is it the best way of spending the money? I rather suspect it is an inevitable way in the short run if everybody needs help is to get that help.
But I do think it’s incredibly important that the government thinks through and gets to a better or more targeted way of supporting (people) as we get through to next winter. Otherwise, we’re going to be on the hook, potentially, for an awful lot more money, for an awful lot longer.
1m more people face poverty this winter, even with energy bills frozen, says Tory thinktank
Over a million more people will slide into poverty this winter – even if the government freezes energy prices at current levels, a conservative think tank has estimated.
The Legatum Institute, headed by Tory peer and former government advisor Lady Stroud, calculated a price freeze would still push 1.3m people below the poverty line – though it would also shield 1.45m people from a “once-in-a-generation” rise in poverty.
The analysis suggests that even if action is taken to blunt the impact on consumers of soaring energy prices, many will still struggle with rising costs in other areas such as food, clothing and transport, partly as a result of below-inflation benefit increases.
Stroud said:
It is good to see that Liz Truss is taking this seriously and looking at energy price freezes. This will shield nearly a million and a half from poverty this winter. But if Liz Truss wants to stabilise poverty at pre-pandemic levels, she will need to go further and introduce a 10% uprating of universal credit as existing inflation will still hit the poorest hardest.
The institute used methodology developed by the respected Social Metrics Commission. Earlier this year Stroud set up an independent cross-party poverty strategy commission and criticised the government for lacking the will and ambition to tackle rising hardship and destitution.
Spending on health and social care will stay 'exactly the same' despite health and social care levy being scrapped, says Coffey
And here are some more line from Thérèse Coffey’s morning interview round.
Coffey, the new health secretary and deputy prime minister, confirmed Liz Truss would set out a plan to deal with the energy bills crisis later this week.
Coffey claimed that spending on health and social care would remain “exactly the same” despite Truss’s pledge to scrap the health and social care levy (the national insurance increase), that was introduced to raise money for the NHS, and then social care. She said:
Instead of having in effect a ring-fenced levy, we will be funding that out of general taxation, so the investment going into health and social care will stay exactly the same.
She said the government would not charge people to see a GP. In 2009, before she became an MP, Truss was deputy director of a thinktank that proposed charging to see a GP in a report she co-authored.
Coffey said she accepted the NHS needed to improve quickly. A Catholic, Coffey voted against same-sex marriage in 2013 and extending abortion rights in Northern Ireland. Asked about her stance on abortion on Sky News, she said:
I’m conscious I have voted against abortion laws. What I will say is I’m the complete democrat and that is done, so it’s not that I’m seeking to undo any aspects of abortion laws.
Deputy PM Thérèse Coffey denies claims Truss put loyalty ahead of competence when appointing new cabinet
Good morning. Liz Truss is chairing a meeting of her new cabinet this morning at the start of what will be an intense 48-hours for her government. Today she has to finish her government reshuffle, face Keir Starmer for the first time at PMQs and – most important of all – finalise her plan to tackle the energy bills crisis. And tomorrow that plan is expected to be unveiled to MPs in a statement to the Commons. If it crashes – if the public, and the media/expert voices who influence what they think, judge that it won’t work – then it is hard to see how her premiership will recover. But if it is ambitious and clear and comprehensive enough to persuade people it will work (like furlough, a textbook example of a successful “big bazooka” government intervention), then Truss and the Tories could be on the road to recovery.
Here is a full list of the new cabinet. And here is our overnight story about it.
Thérèse Coffey, the new health secretary and deputy prime minister, has been giving interviews this morning and she has rejected claims that, in picking her top team, Truss focused too much on rewarding her friends. Asked on the Today programme about claims that this was a “cabinet of chums”, where loyalty, not competence, was being rewarded, Coffey said:
I think a lot of the people taking up roles will show that they’ve been considered, that they’ve been competent and compassionate, in how they’ve approached politics.
I know that Liz is very keen … to make sure that we have really focused delivery.
And on Sky News Coffey said:
This is, I think, a government of all the talents that we have in this party. Liz has appointed a cabinet of a mixture, whether it’s … her proactive supporters [and] people who did not support her as well.
I will post more from the Coffey interviews soon.
Here is the agenda for the day.
8.30am: Liz Truss chairs her first cabinet meeting.
10am: Andrew Bailey, the governor of the Bank of England, gives evidence to the Commons Treasury committee.
11.30: Chris Heaton-Harris, the new Northern Ireland secretary, takes questions in the Commons.
12pm: Truss faces Keir Starmer at her first PMQs.
I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.
If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.
Alternatively, you can email me at andrew.sparrow@theguardian.com
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