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Evening summary
Michael Gove has launched a sustained broadside at Truss’s economic plans, saying it was “not Conservative” to fund tax cuts from borrowing and marked a betrayal of the party’s one nation 2019 election manifesto. He was probably the most outspoken of the MPs critical of the mini-budget, but many other backbenchers – from the right and the left of the party – expressed reservations about cutting spending on the poor while going ahead with a tax cut aimed that the wealthiest. Even some government ministers spoke about the need for the government to proceed carefully, hinting that some sort of rethink would be welcome. Ultimately the mini-budget measures will have to be passed by MPs and the mood at conference suggests that Truss would struggle to get a majority if she tries to push through the abolition of the 45% top rate of tax alongside significant spending cuts that would penalise poorer people.
Steve Baker, a Northern Ireland minister, has apologised to Brussels and Dublin for the way he and fellow Brexiters ignored their concerns about Northern Ireland being taken out of the EU. (See 6.05pm.)
Rees-Mogg defends abolition of 45% top rate of income tax
Speaking at a fringe event, the business secretary, Jacob Rees-Mogg, vigorously defended the abolition of the 45% top rate of income tax and insisted that the recent mini-budget, which prompted a calamitous response from financial markets, had been both correct and not notably different from policy in other countries. He said:
Why do we think that having high tax rates is a good thing? We don’t. We think low tax rates are a good thing. People want to keep the money that they earn.
There is this balance between fiscal and monetary policy, which I think the government is getting right. It’s actually what most countries in the world are doing. Most countries, including the US, are seeing a fiscal easing with a monetary tightening, and that’s not particularly controversial.
Ben Wallace says UK commissioning two ships to specialise in protecting cables and pipelines on seabed
Ben Wallace, the defence secretary, announced the government has committed to “two specialist ships” with the capability to “keep our cables and pipelines safe”. In his speech at the end of proceedings in the main hall at the Tory conference, he said:
This week we saw the mysterious damage inflicted to the Nord Stream pipelines. And it should remind us of how fragile our economy and infrastructure is to such hybrid attacks.
Our intent is to protect them. Our internet and energy are highly reliant on pipelines and cables. Russia makes no secret of its ability to target such infrastructure.
So for that reason, I can announce we recently committed to two specialist ships with the capability to keep our cables and pipelines safe.
The first multi-role survey ship for seabed warfare will be purchased by the end of this year, fitted out here in the UK and then operational before the end of next year.
The second ship will be built in the UK and we will plan to make sure it covers all our vulnerabilities.
Victoria Prentis, a welfare minister, has said that the government should think “very carefully” this winter before taking decisions that would impact on struggling families.
Prentis made the remark at a fringe event convened by the Centre for Policy Studies - called ‘What can the Conservatives do for Families?’ - where she was answering a question from the floor from a school governor who asked what the government would do to help people face a coming “tsunami” of costs including rocketing mortgage payments.
I came from my previous role which was focused on food poverty and something that became very clear to me during the pandemic is how detailed is the evidence that we need of the effects of our policies.
I do think that we need to take decisions this winter very carefully and on the basis of some very granular evidence.
One Tory MP who has been privately critical of the tax cuts predicted Liz Truss would be forced to U-turn as the scale of rebellions became clearer. They said:
She’s like a shark. You don’t get through the last three administrations and come out on top the other side unless you’re willing to do whatever it takes to survive. She will realise the writing’s on the wall - the only question is how quickly.
Another Tory MP who is a member of the government said it was possible the government could face a defeat on the min-budget and “find out the hard way what happens when an unstoppable force meets an immovable object”.
Other MPs who reflected stirrings of backbench unease about the government’s mini-budget included the Ashfield MP Lee Anderson who said that “the optics” were not good around the mini-budget. Speaking at a meeting of young Conservatives he said:
Just to turn around and introduce a policy sometime and say, that’s Conservative, I don’t think that’s good enough, because we’ve got five or six million new people in this country who voted Conservative for the very first time, and they’re still a little bit dubious about us. They lent their vote to us. And we’ve got to, we’ve got to keep on.
Anderson declined to answer a question about whether he would vote against the government’s plans.
He went on to suggest that that the economic situation of many was being exaggerated, and said his own measure was the number of people in Wetherspoons or following their teams at football grounds.
The young Conservatives in the audience included a young banker who told Anderson and her party colleagues that lifting the cap on bankers’ bonuses was deeply wrong, adding: “We are not the ones who are struggling.”
Elsewhere, another a fringe event was told by the backbench MP Danny Kruger that the government should not now “take an axe to public spending or benefits in order to balance the books.”
Kruger, a rightwinger, told a Centre for Policy Studies event on family policy:
Very significant steps have been taken already and the energy cap will significantly reduce the impact of what is going on. But what we need to see, in addition to the economic side of things and the deregulation, is actually support on the social side of things to strengthen people with the pressure they are under, to make then more resilient and able to withstand these sorts of shocks.
I don’t think we should be taking an axe to public spending or benefits in order to balance the books at this stage. We need to be supporting families and communities.
Northern Ireland secretary says UK government could have understood complications of NI 'a bit better, sooner'
In his contribution during the session on Northern Ireland Chris Heaton-Harris, the Northern Ireland secretary, also admitted that could have understood the “complication” of Northern Ireland “a bit better, sooner”. He said:
I understand a bit of Northern Ireland history, but I’ve learned a lot in the last few years: the fact that the common travel area allows people to determine what passport they have; the fact that it’s got a common energy market [with Ireland]. So what we do independently in United Kingdom, where we give £400 and other support to consumers of energy, actually can have some effect on the market in Ireland.
So I understand the complications. Maybe we could have understood them a bit better, sooner.
But now the mood music, it certainly seems to be changing and I very much hope that we get some solutions.
Updated
Stephen Farry MP, deputy leader of the Alliance party in Northern Ireland, has welcomed Steve Baker’s apology. (See 6.05pm.)
This is a welcome comment. We need pragmatic leadership. Plus a mutually agreed, legal and sustainable outcome to address issues with the Protocol and the challenges of Brexit. https://t.co/SvcQlgjZuM
— Stephen Farry MP (@StephenFarryMP) October 2, 2022
Steve Baker apologies to EU and Ireland for way he and some colleagues did not respect their concerns about Brexit
Steve Baker, the leading Brexiter and former chair of the European Research Group, has acknowledged that he and some of his Brexiter colleagues did not always fully acknowledge EU and Irish concerns about Brexit.
Speaking at on the stage at the Conservative conference in his capacity as a Northern Ireland minister, Baker also apologised for what had been said in the past. And he revealed that he had apologised in person to leading Irish figures.
Referring to his reputation as a Brexit “hard man” (a term he coined himself, although he says it was a joke), he said:
The thing I want to add is, as one of the people who perhaps acted with the most ferocious determination to get the UK out of the EU, I think we have to bring some humility to this situation. And it’s with humility that I want to accept and acknowledge that I and others did not always behave in a way which encouraged Ireland and the European Union to trust us to accept that they have interests, legitimate interests, that we’re willing to respect – because they do and we are willing to respect them.
And I’m sorry about that. Because relations with Ireland are not where they should be and we all need to work extremely hard to improve them. And I know that we are doing so.
The demise of Her late Majesty gave us an opportunity to meet leading Irish figures, and I said that to some of them. ‘I am sorry that we did not always respect your legitimate interests.’
And I hope they won’t mind me saying I felt the ice thawing a bit.
Baker also said it was time to reset relations and make sure the UK and Ireland went forward as “closest friends and partners” and to reinforce the Belfast Good Friday agreement before its 25th anniversary next Easter.
Baker did not explain in detail what he meant by not acknowledging the EU’s legitimate interests. But some Brexiters were happy to downplay, or ignore, the EU’s concern that Brexit would undermine the single market without a hard border between Ireland and Northern Ireland, which nobody wants. He may also have been referring to the way Brexit was imposed on Northern Ireland even though 56% of people in Northern Ireland voted for remain.
Baker’s comment may help to explain why Micheál Martin, the taoiseach, said earlier today that he thought the UK government was serious about getting a solution to the Northern Ireland protocol. (See 3.37pm.)
But Baker also stressed that his apology did not mean the protocol was acceptable. He said the government would resolute about getting it changed.
As my colleague Lisa O’Carroll reports, Steve Baker, the Northern Ireland minister and leading Brexiter, has apologised for the way Ireland and the EU were treated in negotiations as the UK left the EU.
NEW and WOW: Steve Baker, former head of ERG apologises to Ireland and the EU for “not always behaving” in a way that they would “trust us” in Brexit negotiations . “I am really sorry about that because relations with Ireland are not where they should be”
— Lisa O'Carroll (@lisaocarroll) October 2, 2022
I will post the full quotes shortly.
Updated
Welsh secretary Robert Buckland says government must not neglect poorest, even if greater spending needed
A cabinet minister has hinted at his unease about the tax cuts in the mini-budget disproportionately benefiting the wealthy were expressed by a cabinet minister.
Sir Robert Buckland, the Welsh secretary, said while simplifying tax bands was sensible, he wanted to see “intelligent interventionism” instead of “trickle down economics”.
He told a fringe event hosted by Chamber, a policy journal:
A sensible Conservative government must be very careful to make sure that at the other end of the equation, those in greatest need are not left behind ...
We must remember that it is those who are in genuine need who will also need our help as a government.
We have to not shirk our responsibilities in that respect, even if it does mean that for the time being there has to be greater expenditure.
Buckland was speaking amid speculation that the government could cut benefits as one means of ensuring the tax cuts in the mini-budget are funded in the medium term. In her BBC interview this morning Liz Truss refused to commit to uprating benefits next year in line with the inflation figure for September, as Rishi Sunak, the former chancellor, had promised.
Updated
Former first secretary of state Damian Green says it's 'no-brainer' that Tories will lose if they're seen as party of rich
Damian Green, the former first secretary of state, has said the Conservative party will lose the next election if they are just seen as the part of the rich. Green, who chairs the One Nation caucus of Tory MPs, told a drinks reception hosted by the caucus and the Tory Reform Group:
Apart from the fact I think it’s morally right, I also think it’s a political no-brainer that if we end up painting ourselves as the party of the rich and the party of the already successful then, funnily enough, most people won’t vote for us and we lose.
Green also indicated that he hoped there would be a rethink. He said:
I’ve been coming to party conference since the early 1980s so I’ve arrived at party conference in a mood of much gloom many times, frankly, in more than 40 years. And this one is more difficult than many.
Very clearly there are conversations that need to be had over the direction of government as we move between now and the general election.
Updated
Boris Johnson will be the new president of the Conservative Friends of Ukraine group. As PA Media reports, the current president, the former culture secretary John Whittingdale, announced his successor at a Tory conference fringe event, saying Johnson is “in many ways the obvious and most deserving person to lead this organisation because he was the first person, not just in this country but across the western world, to so strongly come out in support of the Ukrainian people”.
Johnson is not attending the conference. Whittingdale said: “Boris is sorry that he can’t be with us today, but he has sent his total support for what we all believe and our support continuing for Ukraine.”
Kwarteng’s budget only got a qualified endorsement from some panellists at an Institute for Economic Affairs (IEA) event and Taxpayers’ Alliance event. Gerard Lyons, an economist who has advised Liz Truss, said the government could not make steep cuts to public spending after abolishing the top rate of tax. He said:
To take your target audience with you, this is not just about communications. Successful economies need to have clarity, predictability and credibility in terms of their strategy and policy ... Markets need to be convinced changes in fiscal policies are necessary and not inflationary.
And for the general public, the very important message is that the social contract is a vital part of our postwar fabric ... You cannot have a return to austerity and cut the top rate of tax at the same time.
He gave the budget a 7.5 out of 10 on substance but said the problems with it had dominated the last week.
However, the budget was fully endorsed by Chris Philp, the chief secretary to the Treasury, who gave it 9.5 out of 10, while acknowledging that there could have been some better “pitch-rolling” to warn people about the policies coming.
He also signalled the government is preparing to go much further on
deregulating businesses. He said:
We are going to be reducing business regulation. Jacob Rees-Mogg has a whole load of ideas to do that - one of which is making sure no business under 500 employees gets subject to business regulation - another critically important move. Jacob is going to lay out a whole load more ideas in that area.
At the Tory conference the activists in the hall have just followed Labour’s example and sung the national anthem. At the Labour party the singing of the national anthem was a story (even though criticism of the move did not get much further than a mildly sceptical comment from Jeremy Corbyn). At Tory conference is looks more like something they would do every year (although they don’t.)
Brandon Lewis, the justice secretary, told a fringe meeting at the conference that he was “hopeful” that the long-running strike by criminal barristers in England and Wales would end after the government offered them “a comprehensive package” including a 15% fee increase.
I’m confident that they will look at the proposals carefully, I’m hopeful that they will look at them positively and we will see an end to the strike.
It’s a comprehensive package that deals with the issues that need to be dealt with and actually puts the whole structure, particularly for the junior bar, in a very different place in terms of covering off some of the issues.
At the Tory conference they are now showing video of all former Conservative prime ministers who are still alive – John Major, David Cameron, Theresa May and Boris Johnson – talking about their dealing with the Queen, and in particular how much they valued their audiences with her. It may be all the activists get to see of Johnson at this event.
Photograph: Hannah McKay/Reuters
The formal conference proceedings have finally started. As Ben Quinn explains in a conference guide, this year speeches are taking place between 4pm and 6pm. The joke in the press room is that they’ve scheduled it like this so that most of the speeches will take place after the stock market has closed, limiting the opportunity for any cabinet ministers to crash share prices any further.
The first speech was from Penny Mordaunt, leader of the Commons, who paid tribute to the late Queen.
The former Spice Girl – Melanie Brown – has told an event at the Conservative Party conference of her fears that the “massive issue of domestic abuse” will slip down the agenda during “these times of absolute economic chaos.”
The singer, known to millions as Mel B or ‘Scary Spice’, was speaking at a meeting organised by the Sun and Women’s Aid, which she became a patron of in 2018 after leaving what she described as an abusive relationship.
“We need to reform everything, the courts, the police, even GPs, even people in your work environment, HR, you need to have a safe place where you can go without any shame and know the warning signs,” said Brown, who was made an MBE for services to charitable causes and vulnerable women.
Women’s Aid is publishing research which found that 40% of adults believe that people who carry out domestic violence against women were enabled by sexism, compared to some 60% who felt the opposite and regarded it – in the words of the charity’s CEO - as “bad people doing bad things”.
“What we have is a real gap in people’s understanding of how prevalent this crime is,” said Farah Nazeer, chief executive of Women’s Aid. She went on:
We are not ready yet as a society to support women and that is the fundamental question. This is due to sexism and misogyny that underpins all those systems. They are not created to recognise the harm that women face on a daily basis.
The new Women’s Aid research also found there was a 15% drop in how seriously people regarded an instance of domestic abuse, such as if a man slaps his wife, if the perpetrator apologised afterwards.
“In these times of absolute economic chaos I don’t want the massive issue of domestic abuse to slip down the agenda”
— Ben Quinn (@BenQuinn75) October 2, 2022
Mel B - aka Scary Spice - tells a @womensaid / Sun fringe at the Conservative conference pic.twitter.com/QWtshcEbKl
Truss showing 'genuine engagement' with NI protocol problem and wants negotiated solution, says Irish PM
Micheál Martin, the taoiseach (Irish prime minister), has said Liz Truss is showing “genuine engagement” with the Northern Ireland protocol problem and wants a negotiated solution.
Speaking on RTE, Martin said:
I had a positive and warm meeting with Liz Truss when we met the weekend of the funeral of Queen Elizabeth.
I did, to be fair, detect a genuine engagement and a wish to get this issue resolved.
I think she would prefer a negotiated solution and the subsequent meeting between Liz Truss and Ursula von der Leyen [European Commission presiden] went well also and I think in many respects it’s about getting this into a process between the European Union and the United Kingdom to get this issue resolved once and for all, not least because of the issues [like] the war in Ukraine, the energy crisis.
Europe and United Kingdom need to be acting together on that.
Really the protocol should not be an issue causing that degree of distress in the relationship between the European Union and the United Kingdom.
The Scottish Conservative MP Andrew Bowie has told BBC Radio Scotland that he agrees with what Michael Gove told the BBC’s Sunday with Laura Kuenssberg this morning about unfunded tax cuts being a mistake. (See 9.14am.) Asked if Gove was right, Bowie replied: “Yes, he’s right.”
He also said that that if the government were to cut benefits to fund these tax cuts, that would be a mistake.
In principle, cutting welfare to pay for tax cuts would not be the right thing to do. But that’s not what’s been laid in front of us.
Bowie said he wanted to give Kwasi Kwarteng, the chancellor, time to “expand” on his plans. He said:
I share people’s concerns about where we are right now. But I think it’s incumbent on all of us to give the chancellor the space and the time to expand on those plans and set out more detail, and for us to be able to determine whether or not we support those plans.
But he refused to say that he would vote for the mini-budget. Asked what he would do, he said:
We’re going to take a decision based on what those plans are, and every Conservative MP will have to examine those plans in detail and in depth and come to a decision as to whether or not they support it.
Jacob Rees-Mogg, the business secretary, has played down the significance of the protesters who booed him at the conference in Birmingham. (See 1.32pm.) He told Sky News:
There have been protests at Tory conferences since time immemorial, it’s nothing new. It’s a fact of democracy. They’re shouting but it’s perfectly peaceful. And the right to peaceful expression of your view is fundamental to our constitution.
Ben Wallace, the defence secretary, has told a fringe meeting at the Tory conference that the UK is channelling aid to Ukraine from countries that are opposed to what Russia is doing in private but that don’t want to say so pubicly, my colleague Jessica Elgot reports.
Wallace says UK MoD coordinate donations/aid to the Ukrainians from countries who do not want to make support public. “We don't make it public. They don't want to go public. But Russia would be deeply unhappy to learn that some [countries] deeply disagree with what's going on.”
— Jessica Elgot (@jessicaelgot) October 2, 2022
Nadine Dorries accuses Truss of throwing Kwarteng 'under a bus'
Nadine Dorries, the former culture secretary and leading Boris Johnson supporter, has accused Liz Truss of throwing Kwasi Kwarteng “under a bus” in her interview with the BBC’s Laura Kuenssberg this morning. (See 9.53am.)
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
— Nadine Dorries (@NadineDorries) October 2, 2022
If Dorries thinks that Johnson was too loyal, she might want to read Andrew Gimson’s new book about him, Boris Johnson: The Rise and Fall of a Troublemaker at Number 10. Dorries was one of Johnson’s early supporters when he ran for the Tory leadership, and she has always said that she likes him because he never patronised her in the way that people like David Cameron did. But Gimson reveals that in private Johnson was not always complimentary about his most loyal supporters.
Johnson is said, when shown the list of his first seventy parliamentary supporters, to have exclaimed: ‘For fuck’s sake go and find me some sensible people!’
Many Guardian readers will agree with Gimson’s verdict on Johnson in the book – “a vile, disgusting human being”. But it was one of Andrew Gimson’s sons who said that. Gimson himself, who has already written one frequently-updated biography of Johnson, has made a career out of arguing that the liberal intelligensia has underestimated Johnson’s talents and appeal. He is at it again in this volume which, while ultimately unconvincing (Sonia Purnell explains why here), is nevertheless thought-provoking, exceptionally well written and informed by a deep knowledge of political history.
The Joseph Rowntree Foundation, the anti-poverty charity, has said that Liz Truss’s comments about benefits (see 8.55am) will “have added to the mounting fear being felt by those on the lowest incomes”. Katie Schmuecker, a policy adviser, a policy adviser at the JRF, said:
Failing to commit to help people who are already struggling to feed their families, cook hot food and heat their homes, when she has reaffirmed her intention to help those on the highest incomes, is both morally indefensible and harmful.
There is still time for the prime minister and her government to commit to uprating benefits in line with prices, as is usual, and avoid committing this harmful act of historic proportions.
Tories face large protest at party conference
A large crowd of protesters has gathered in Birmingham’s Victoria square, around the corner from where the Conservative party conference is taking place.
Rail union boss Mick Lynch, who is due to address the crowd this afternoon, said the rising cost of mortgages could mean “we have people on reasonable incomes facing homelessness in the future”. He went on:
You see all around you ordinary men and women who are desperate for a pay increase. I’m worried our communities are going to be impoverished, and if we don’t stand up to that it will be too late to stop this juggernaut of the right wing destroying our communities and creating division.
The government has to be stopped because they have an agenda which nobody voted for in this country.
Police had to step in keep back angry protesters as business secretary Jacob Rees-Mogg walked to the conference via the edge of the protest site. (See 1.32pm.)
“We’d like a change of government, and we want more of a focus on policies that support everyday people rather than just the rich,” said Brianna, a protester from Birmingham who was with her three children, including five-year-old Dilly who was holding a placard saying “I want a better prime minister”.
Protesters setting off from Victoria square to march through Birmingham city centre as the Tory party conference gets underway pic.twitter.com/0aV4xkPxih
— Jessica Murray (@JournoJess_) October 2, 2022
Updated
Q: You said there would be 18 months until the next election. Do you mean it will be in May 2024.
Who know when it will be, says Berry.
You probably know, says Hope.
Berry says in the normal course of events it would be about 18 months away.
Q: Why should people in red wall seats back cutting the 45% top rate of tax
Because red wall seats will benefit most from extra growth, Berry says.
He says it is a mistake to think the red wall votes wanted a Labour-lite government. They wanted a Conservative government.
When people feel better off, they will support the government.
Q: Has the party failed to explain the need for the change?
Berry says it could have been done better.
Michael Gove has finished taking questions at the Telegraph fringe. Christopher Hope is now questioning Jake Berry, the Conservative party chairman.
Q: You are the 11th party chairman in 13 years. How long will you be in your job?
Berry says he hopes to stay in post until the election.
Q: What is your message to Michael Gove, who says the 45% top rate of tax should stay?
Berry says getting rid of it is the right decision. He says under Labour the top rate was 40%. Decisions will be made at the time about what will happen to people who vote against.
UPDATE: From Mail Online’s David Wilcock
Not much warmth as Jake Berry replaces Michael Gove @ChoppersPodcast - party chair backs axing of 45p tax rate as a way of boosting growth - including in the North pic.twitter.com/4LMD4MDRsj
— David Wilcock (@DavidTWilcock) October 2, 2022
Updated
Rees-Mogg booed by protesters shouting 'Tory scum' as he arrives at conference
Jacob Rees-Mogg was booed loudly by hundreds of protesters in Birmingham, PA Media reports. PA says:
The business secretary was escorted by several police officers as he walked across Victoria Square, where demonstrators had gathered to vent their anger at the Government as the Tory conference gets under way in the city.
The crowd pursued him, jeering and booing, with some shouting “Tory scum”.
Demonstrators furious at Liz Truss’s economic plan are carrying signs reading “unelected, unaccountable, unhinged” and “wages up, bills down, Tories out”.
UPDATE: Here is some video footage from Birmingham Live’s Rhi Storer.
Jacob Rees-Mogg is walking up to Conservative party conference with police protection pic.twitter.com/QRr6u1VHOT
— Rhi Storer (@rhistorerwrites) October 2, 2022
Updated
Q: Why are you opposed to increasing the number of grammar schools?
Gove says parents and students do not choose grammar schools; grammar schools choose students.
And this favours the better off, he says.
He says he wants grammar school standards to apply in all schools.
Q: Have you spoken to other Tory MPs about opposing the mini-budget. And what else should be dropped from it?
Gove says he has not spoken to colleagues about this.
On the second point, he says the OBR forecast needs to be published soon so that MPs can reach a balanced view on what should happen next.
Gove says government should abandon plan to scrap 45% top rate of tax
Gove is now taking questions from the audience. A man says Gove said the party should come together after the leadership contest. Is is actually following his own advice?
Yes, says Gove.
He says he has two concerns about the mini-budget: the tax cuts being unfunded, and the abolition of the 45% top rate of tax. It would be “wise to reflect” on those policies, he says.
Q: You mean they should be dropped?
Gove says the abolition of the 45% is wrong. The government should drop the idea, he says.
This was implied by what he said on the BBC’S Sunday with Laura Kuenssberg, but he is being more explicit here.
Q: Are you in favour of a new royal yacht?
(Christopher Hope has led the Telegraph’s campaign for one.)
Gove says he is in favour of the idea in principle, but does not think it should be a priority for public spending at the moment.
Q: Are there parallels between Liz Truss and Jeremy Corbyn? Both of them did not get the support of a majority of their MPs.
No way, says Gove. He says Corbyn is “an eccentric, fringe figures with unsavoury friend and bonkerony views”. Truss is highly effective and very intelligent. People should not underestimate her, he says. She has '“formidable skills”.
He says he hopes she will correct course on one or two issues.
Q: Is the party imploding at the moment?
No, says Gove. Journalists have a tendancy to simply and exaggerate. The Tories have an opportunity to take stock and reflect, he says.
Gove says, despite all that has happened, he is still a Boris Johnson fan.
He says he is all in favour of growth. But so was George Osborne and Rishi Sunak.
He says one of Liz Truss’s strenghs is her ability to hone in on a truth, and focuse her intellectual strength on it.
Gove says he is “wary” of the decision to reverse the national insurance increase and scrap the planned corporation tax rise. But Liz Truss had a mandate for those decisions following the leadership contest.
But she did not have a mandate for abolishing the 45% top rate of tax, he says.
He says he welcomes the fact that Truss implied a “course correction” might be possible in her interview this morning. (That is not really what she implied.)
Q: How would you vote on that tax cut if the vote were tomorrow?
Gove says the vote is not tomorrow, so there is time for the situation to change.
I’ve never voted against the Conservative whip and I want therefore to make sure that we can have a civilised conversation about priorities.
Updated
Michael Gove says people voted for one nation government in 2019
Michael Gove, now seen by some as the leader of the Tory opposition to Liz Truss, is speaking at the Telegraph’s Chopper’s Politics Live fringe meeting. “Chopper” is Christopher Hope.
Gove talks about being “released of the obligations of public service by the prime minister” (ie, sacked by Boris Johnson). Asked why he is doing so many fringe meetings this year, he says he was invited before he left the cabinet.
Q: Are you alarmed by the rightwing lurch of your party?
Gove says words like that do not descibe what is going on.
The majority that Johnson won in 2019 was “one nation majority”, he says. The party won the support of people who were not wealthy. They wanted to see a compassionate, one nation government.
Q: So Liz Truss does not have a mandate?
Gove says any PM has to respond to new circumstances. It was right to respond to the fuel crisis, and look at what can be done to promote growth.
But the governmnent must also look after the most vulnerable.
It will be “very, very, very difficult” to argue for welfare cuts when taxes are being cut for the rich.
It’s going to be very, very, very difficult to argue it’s right to reduce welfare when we’re also reducing tax for the wealthiest.
Updated
Tory chair Jake Berry says people facing higher fuel bills can cut consumption or get better job
In his interview with Sophy Ridge this morning on Sky, Jake Berry, the Conservative party chair, also said that, if people were having difficulty paying their fuel bills, they could either cut their consumption or get a better job. He was making a point about the need for the government to economise, and he said that was how households worked too. He said:
People know that when their bills arrive, they can either cut their consumption or they can get a higher salary, higher wages, go out there and get that new job.
Updated
Rees-Mogg's former business partner given peerage and made international trade minister
And, talking of Jacob Rees-Mogg, Steven Swinford from the Times has spotted this; according to an update on the government’s website, Rees-Mogg’s former business partner, Dominic Johnson, has been made an international trade minister. He is not an MP so, to allow him to do the job, he has been given a peerage too.
BREAKING:
— Steven Swinford (@Steven_Swinford) October 2, 2022
Liz Truss has appointed Dominic Johnson, Tory donor & co-founder of Somerset Capital with Rees-Mogg, as trade minister
Announcement quietly dropped on https://t.co/Ykkwe7cwEd
He's being handed a peerage to boot
Confirms @fletcherr scoophttps://t.co/MWArxD06gF pic.twitter.com/dEQaVpVaGc
Rees-Mogg claims extending definition of SMEs will allow thousands of firms to avoid 'pointless paperwork'
The Conservative party has released more details of the plan announced by Liz Truss in her Sunday Telegraph interview (see 8.29am) to extend the definition of a small firm.
It says that when the government develops policy, it works on the basis that SMEs (small and medium-sized enterprises), defined as firms with fewer than 250 employees, are exempt from some regulations. From tomorrow it will treat firms with fewer than 500 employees in this category, it says.
In a press release explaining the move, the party said:
The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses.
Regulatory exemptions are often granted for SMEs, which the EU defines at below 250 employees. However, we are free to take our own approach and exempt more businesses to those with under 500 employees. We will also be able to apply this to retained EU law currently under review, which we would not have been able to do without our exit from the EU.
The changed threshold will apply from tomorrow to all new regulations under development as well as those under current and future review, including retained EU laws. The government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1,000 employees, once the impact on the current extension is known.
This is the first step in a package of reforms to ensure UK business regulation works for the UK economy. The reforms will harness the freedoms the UK has since leaving the EU to remove bureaucratic and burdensome regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money.
The Tories says 40,000 companies will benefit from the move.
Jacob Rees-Mogg, the business secretary, said in a statement:
Our enterprising medium-sized businesses are being buried in pointless paperwork, preventing them from reaching their world-leading potential.
That is why we are cutting red tape, starting with preventing unnecessary future regulations for these companies. We are harnessing the freedoms the UK has since leaving the EU, removing bureaucratic and burdensome regulations on businesses, and taking steps to create a dynamic, growth-led economy.
Tory chair Jake Berry claims down significance of polls showing Labour lead soaring
And here are the main points from Sophy Ridge’s interview on Sky with Jake Berry, the Conservative party chairman.
Berry said that he thought Conservative MPs who vote against the mini-budget should lose the whip. He said it was a decision for the chief whip, but as far as he was concerned they should lose the whip, he said.
He defended the party’s decision to hold a champagne reception for supporters, included hedge fund managers, on the day of the mini-budget. (See 8.38am.)
He defended the government’s decision not to rule out spending cuts. He said:
I don’t think it’s unreasonable to say that the public sector should look at its expenses in the same way that every single household is doing in this country.
What we’ve heard from the government is there’s going to be a drive to trim fat in terms of government expenditure.
He claimed it was “nonsense” to claim that the government’s tax cuts are helping the richest most. He said:
Every single working person in this country is going to see a cut in their national insurance this month and we also know that the lower paid in this country, as a percentage of their income, pay more in national insurance than higher earners. So in fact as a percentage of income it is giving a bigger tax cut to those lower earners than it is to the top earners.
When shown a graph from the Resolution Foundation suggesting higher earners benefited most from the government’s plans, Berry said he could not see the image.
He played down the significance of recent polls showing Labour’s lead soaring, pointing out that the Conservatives won two recent council byelections in his constituency. He said:
The difference between that poll and those by-elections last week is it’s a forced decision where people have to make a choice.
And I know and believe that when we get to that general election and when we have delivered that growing economy, when we have ensured that the benefit is felt by every household in this country, that it will be a very different result than shown in that snap poll a few days after the government has done a mini-fiscal event.
Truss refuses to rule out public spending cuts as she defends substance, but not presentation, of mini-budget
Here are the main points from the Liz Truss interview with Laura Kuenssberg.
Truss defended the government’s controversial mini-budget in its entirety, accepting that the presentation could have been improved, but giving no indication that she wants to change the substance of it. Asked if she was committed to getting rid of the 45% top rate of tax (the most controversial element), she said she was.
She refused to deny that she might cut public spending. It is clear that, without reversing the tax cuts, the government will only be able to get borrowing under control by cutting spending and at least four times she refused to deny that she might cut public spending. She also refused to commit to increasing departmental budgets (which were set when inflation was lower) in line with the current rate of inflation. When it was put to her that Simon Clarke, the levelling up secretary, hinted strongly that the government will cut the size of the state in a Times interview on Saturday (“I do think it’s very hard to cut taxes if you don’t have the commensurate profile of spending and the supply side reform … There is always something you can do to trim the fat,” Clarke said), Truss did not dispute what he said. She wanted “value for money for the taxpayer”, she said.
She refused to commit to increasing benefits next year in line with the level of inflation in September, as Boris Johnson’s government promised. But she said pensions would increase in line with inflation, because she was keeping the triple lock.
She accepted the government had not done enough to prepare opinion for what the mini-budget was going to contain. She said:
I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.
But I do accept we should have laid the ground better ... I have learnt from that and I will make sure that in future we do a better job of laying the ground.
She said the decision to abolish the 45% top rate of income tax was taken by the chancellor, Kwasi Kwarteng. (See 9.53am.)
She ruled out publishing the next economic forecast from the Office for Budget Responsibility before 23 November. Asked why it was not published alongside the mini-budget, she said:
It does take a while to produce those forecasts ... We simply didn’t have time to go through that process because it was a very urgent situation.
In fact, the OBR said a slimmed-down version of the forecast could have been published then. Asked if she will publish a forecast before 23 November, when the medium-term fiscal plan is being published, Truss replied: “Well, no, for the following reason, Laura, that it’s not yet ready.”
She claimed she did have a mandate for her policies because in 2019 people voted for a different future. Asked if she had a mandate for her plans, she replied:
What people voted for in 2019, when they voted Conservative, sometimes for the first time in many years, they voted for a different future. They voted for investment into their towns and cities, they voted for higher wages, they voted for economic growth. And that is what our plan will deliver. I’m confident it will deliver.
She implied that global issues, and not the specific measures in her mini-budget, were partly behind the financial turmoil on the markets over the past week. When it was put to her that this was not just a global issue, and that it was announcing unfunded tax cuts that triggered a fall in the pound and a rise in government borrowing costs, she said interest rates were going up around the world. But she also said that she also had to take action to stimulate growth quickly, and that the presentation could have been better.
Updated
Rachel Reeves, the shadow chancellor, was also interviewed on Sunday with Laura Kuenssberg after Liz Truss. She said Truss did not understand the alarm she was causing with her “mad experiment” with the economy. Reeves said:
The prime minister just doesn’t seem to understand the anxiety and fear. This is a crisis made in Downing Street but it is ordinary working people who are paying the price.
The idea that trickle-down economics is somehow going to deliver the 2.5% growth we all want to see is for the birds.
The prime minister and the chancellor are doing some sort of mad experiment with the UK economy and trickle down economics. It has failed before and it will fail again.
Starmer urges Tory MPs to work with Labour to restore 'some semblance of economic sanity'
Keir Starmer has used an article in the Sunday Telegraph to encourage Conservative MPs to work with Labour to overturn aspects of the mini-budget. He says:
For the vast majority of those who still live in the reality-based community – tethered to gravity and maths - it is clear what has happened. The markets do not believe in the fantasy economics of untrammelled borrowing and unfunded tax cuts any more than the average person on the street does.
They do not believe in the myth of trickle-down economics, where making the richest richer magically benefits everyone else.
Eroding our tax base just as there are pressures for spending is not just bad economics or childlike delusion – it is a real and present danger to economic health. It is the gambler chasing good money with bad, the smoker puffing away outside the hospital doors. It is unsustainable …
If the prime minister continues to bury her head in the sand, it will fall on others to act.
Neither the country nor parliament has had any say on these measures. That is unacceptable. The economy is not a laboratory experiment for the maddest scientists of the Conservative party.
Mortgages, pensions and family finances are not casino chips for a government intoxicated by dogma. There are many decent Conservative MPs who know this. My message to them is that Labour will work with anyone to ensure some semblance of economic sanity is restored.
Treasury committee chair Mel Stride says delaying OBR forecast could mean higher interest rates
Mel Stride, the Conservative chair of the Commons Treasury committee, told Sky News that if the governmement publishes the new forecast from the Office for Budget Responsibility before 3 November, when the Bank of England’s monetary policy committee (MPC) is due to make its next interest rate decision, that might lead to the interest rate rise being lower than it otherwise would be. He said:
If [the MPC] has a satisfactory OBR report before that meeting on November 3, I would imagine and expect that the interest rate rise will probably not be as high as it otherwise would be.
That OBR report, the fiscal targets, would have reassured the markets, there would be less concern about the inflationary impacts of the government’s policy and therefore the MPC would be putting interest rates up by potentially a little bit less.
At the moment the government is not due to publish the new OBR forecast until the medium-term fiscal plan comes out, on 23 November.
Truss's interview - verdict from Twitter commentariat
And this is what political journalists and commentators are saying about the Liz Truss interview on Twitter.
From my colleague Gaby Hinsliff
Lots in that @bbclaurak interview but what stuck with me is Truss confirming she really doesn’t care about optics/how things look This is basically a politics that doesn’t care about public opinion which is to say the least..bold
— gabyhinsliff (@gabyhinsliff) October 2, 2022
From Lucy Fisher from Times Radio
Surely Truss can’t hold the line this week on refusing to talk about spending cuts to public services, since that’s THE key factor likely to calm markets and clearly what govt is planning (as Simon Clarke tee-ed up in Times interview yday)… https://t.co/9o5PYKXTNz
— Lucy Fisher (@LOS_Fisher) October 2, 2022
From ITV’s Paul Brand
Think despite the difficulties that was at least a better interview performance by Truss than Friday’s local media. PM doubling down and focusing on trying to communicate her plans better. Question is whether narrative has already set in and too difficult to reverse. #BBCLauraK
— Paul Brand (@PaulBrandITV) October 2, 2022
From the Sunday Times’ Tim Shipman
Too much focus on the optics in politics says Liz Truss. Weird from her, who only got the job of PM because she was good at the optics and is only in this mess because she catastrophically failed to over the last week
— Tim Shipman (@ShippersUnbound) October 2, 2022
From the Sun’s Harry Cole
Not unusual for a budget to be presented fait accompli to Cabinet at all.. but not sure the idea that Truss was not entirely linked to Sept 23 is not going to wash.
— Harry Cole (@MrHarryCole) October 2, 2022
From the i’s Paul Waugh
Truss repeats the lie that 'we have had two decades of low growth'.
— Paul Waugh (@paulwaugh) October 2, 2022
Growth in 2002 was strong.
In fact growth under Labour was strong until the global financial crisis in 2008.
Amazed she's allowed to repeat that in so many interview.
Another misleading statement? Asked by @bbclaurak whether she will publish the OBR assessment handed to Govt on Oct 7 - well before Nov 23 as planned by govt. “There’s no point in publishing something that’s not ready.”
— Paul Waugh (@paulwaugh) October 2, 2022
Surely the OBR assessment will be 'ready' NEXT FRIDAY?
From the Spectator’s James Forsyth
The refusal to rule out public spending cuts is the story out of this Truss interview
— James Forsyth (@JGForsyth) October 2, 2022
From Jon Sopel from the News Agents podcast
I think if you’re @trussliz you’re going to be pretty pleased with the way that interview went
— Jon Sopel (@jonsopel) October 2, 2022
From the broadcasting executive Rob Burley
Don't agree. Think she's no better off and possibly a little worse off after it. Think Michael Gove - in an intelligent booking on the panel that suggests lessons learned - was also dynamite. In a Liz-Truss-please-hold-this-stick-of-dynamite sort of way - positive for @bbclaurak https://t.co/MAz2l7JZE6
— Rob Burley (@RobBurl) October 2, 2022
From Andrew Marr of the New Statesman and LBC
Ok. Rather amazingly I think the story is now Gove not Truss
— Andrew Marr (@AndrewMarr9) October 2, 2022
From GB News’ Tom Harwood
Objectively that Truss Laura K interview was assured.
— Tom Harwood (@tomhfh) October 2, 2022
Strongest points on how interest rates in the States are rising by more than they are here, and how UK borrowing is lower than France, the US, Canada, and Japan.
Think she could have been more explicit on market reaction.
From my colleague Zoe Williams
Weird moment towards the end of the Truss interview where she looks down, searching something, & I think what she was looking for was a clock. How many more minutes of this?
— Zoe Williams (@zoesqwilliams) October 2, 2022
That's why she's toast, I think. She thinks when she's not actually under the grill, problem solved
She doesn't realise the conversation carries on whether she's in it or not. She doesn't realise 'optics' means, 'what other people think and feel, based on their experiences and analysis'. And doesn't realise that matters.
— Zoe Williams (@zoesqwilliams) October 2, 2022
From Huffpost UK’s Kevin Schofield
Truss in summary: Can guarantee a massive tax cut for the richest in the country, but won't guarantee that she'll stick to Boris Johnson's promise to raise benefits by inflation.
— Kevin Schofield (@KevinASchofield) October 2, 2022
From the Observer’s Sonia Sodha
“I accept I should have laid the ground better” - Truss. What does that even mean?!
— Sonia Sodha (@soniasodha) October 2, 2022
From the journalist Ian Birrell
Three things we have learned from #BBCLauraK
— Ian Birrell (@ianbirrell) October 2, 2022
1) Liz Truss is pinning the 45p tax cut firmly on Kwasi Kwarteng
2) Spending cuts are coming but the Tories have no idea where they will fall
3) Michael Gove is leading Tory opposition to the government
Truss stresses that decision to abolish 45% top rate of income tax taken by Kwasi Kwarteng
Liz Truss told the Sunday Telegraph that Kwasi Kwarteng was doing an “excellent job” as chancellor.
But in her interview with Laura Kuenssberg, when asked about the decision to cut the top rate of income tax, Truss described it has Kwarteng’s decision, not hers. Asked if the whole cabinet had discuss this, she replied:
No, no we didn’t. It was a decision the chancellor made.
This is being interpreted as a hint that Kwarteng is being lined up to take the blame. It would be hard for Truss to sack Kwarteng over the 45% top rate decision when she appointed him and approved it herself, but she would not be the first prime minister to sack a chancellor for implementing a policy favoured by No 10. Ask Norman Lamont.
In what may or may not be relevant, Tim Shipman reports in the Sunday Times today that it was Chris Philp, the chief secretary to the Treasury and Kwarteng’s deputy, who “during the leadership election wrote a paper for Truss recommending the abolition of the 45p tax rate”.
Updated
From the Labour MP Chris Bryant
I take from Michael Gove’s comments this morning that a burning sense of fury is raging under the surface of the Conservative Party - along with a quiet determination to prevent Truss from getting her budget through.
— Chris Bryant (@RhonddaBryant) October 2, 2022
Liz Truss's interview with Laura Kuenssberg - snap verdict
When politicians make mistakes, their natural inclination is to refuse to admit it, but the smart PR advice is almost always to offer some sort of apology, or admission of error. This is useful mainly because it is what voters want to hear. But it can also draw a line under the controversy, it stops the media banging on about “When are you going to admit that you made a mistake?” and it allows you to move on.
Liz Truss arrived for her interview this morning with a play of this kind up her sleeve. It was not an apology, but it was an admission of error. Talking about the disastrous impact the mini-budget had on the financial markets, she said:
I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.
But I do accept we should have laid the ground better ... I have learnt from that and I will make sure that in future we do a better job of laying the ground.
This went further than what she has said before about the mini-budget. But it was about the feeblest form of “admission of error” conceivable, for three reasons. First, she was using a term that does not mean much to many people anyway (‘“laid the ground better” – what David Cameron used to call “pitch-rolling”). Second, later in the interview she came close to contradicting herself, implying that it did not really matter what people thought anyway. She said:
What I care about is making our country successful, making our economy successful. And I do think that there has been too much focus in politics about the optics or how things look, as opposed to the impact they have on our economy.
But the third and most important point of all is that Truss was not making any concessions on substance. At no point did she accept that any of the decisions in her mini-budget were wrong. She implied it was just a matter of presentation.
The problem with this is that, as Michael Gove rather brutally pointed out immediately afterwards, that Tory MPs think otherwise. We cannot know for sure, but it seems likely that Gove was talking for a majority of Conservative MPs – perhaps even the vast majority? – when he said that abolishing the top rate of income tax now was indefensible.
And that is why this was an interview that does not really help, and that still leaves her struggling at this conference to convince her party that she is not finished for good. (See 8.29am.) This interview was not a car crash in the way the local radio interview round was on Thursday. But equally it was not one that will help her much, if at all.
Updated
Gove calls for publication of fiscal plan to be brought forward, saying 'course correction' essential
Gove says he is sure Liz Truss will be PM this time next year.
But there does need to be a “course correction”, he says. He says “reality bites”.
He says the medium-term fiscal plan, scheduled for late November, will have to be brought forward.
Q: You are being quite critical this week. Are you trying to be helpful?
Yes, he says.
Laura Kuenssberg also asks Michael Gove what he thought of her admission that the cabinet was not consulted on the abolition of the 45% top rate of tax.
Gove says it is normal for a budget decision like that to be taken by the PM and the chancellor, and not by the cabinet as a whole.
Gove hints he would refuse to vote for mini-budget, saying cutting top rate of tax 'display of wrong values'
Michael Gove, the former levelling up secretary, is still in the studio. Laura Kuenssberg asks him for his reaction. And it is brutal.
He starts by saying he was glad to hear Truss acknowledge that the events of the mini-budget need to be revisited. (She did not quite say that.)
But he says there is an “inadequate realisation” at the top of government of the scale of the problem.
There is an inadequate realisation at the top of government of the scale of change required.
He says 35% of the borrowing in the mini-budget was for unfunded tax cuts.
Thirty five per cent of the money we’re borrowing was nothing to do with the energy crisis. It was the deliberate tax cuts, the sheer risk of using borrowed money to deliver unfunded cuts is fundamentally not conservative.
And it is wrong to cut the top rate of income tax when people are suffering. He says cutting tax for the wealthiest “is a display of the wrong values”.
Ultimately, at a time when people are suffering … when you have additional billions of pounds in play, to have as your principal decision cutting taxes for the wealthiest, that is a display of wrong values.
Q: It sounds like you won’t be able to vote for this?
Gove says he does not believe the move is right.
UPDATE: Gove said:
The first [problem with the mini-budget] is the sheer risk of using borrowed money to fund tax cuts. That’s not conservative.
The second thing is the decision to cut the 45p rate and indeed at the same time to change the law which governs how bankers are paid in the City of London.
Ultimately, at a time when people are suffering, and you are quite right to point out the concerns people have not just over mortgages but over benefits, when you have additional billions of pounds in play, to have as your principle decision, the headline tax move, cutting tax for the wealthiest, that is a display of the wrong values.
Updated
Q: How many people voted for your plan?
Truss says in 2019 people voted for a successful country.
She says any government has to deal with changing circumstances.
Q: Do you fear you have put the country on a path it did not ask for?
Truss says in 2019 people voted for “a different future”. They voted for investment and higher wages and more growth. That is what her plan will deliver. She is confident about that, she says. She says she is not saying it won’t be difficult. We face “a turbulent and stormy time”, she says.
That is the end of the interview.
Updated
Truss sidesteps questions about interest rates rising, saying they are matter for Bank of England
Q: What is the logic of helping people with their energy bills if their mortgage costs go up more?
Truss says interest rates are set by the Bank of England.
Q: But do you accept some people will be worse off?
Truss says the government is helping homeowners, with things like the stamp duty cut. She says interest rates are set by the Bank of England. They are dependent on the global situation.
Interest rates are rising around the world, she suggests.
Updated
Q: Why did you not publish an OBR forecast?
Truss says they did not have time to consider all the measures.
Q: But the OBR has said it could have published a forecast.
Truss says it would not have had time to consider all the plans.
Truss dismisses objections to top rate of tax being axed, saying there has been 'too much focus' in politics on 'how things look'
Q: How do you think people will feel about the top rate of tax being cut while spending for poorer people?
Truss says she thinks there has been “too much focus” in politics on “how things look”, and not on whether decisions are right.
It is important to reverse two decades of low growth, she says.
Q: How do you think it looks for Kwasi Kwarteng to be having drinks on the day of the mini-budget with hedge fund managers?
Truss says Kwarteng meets business people the whole time. She does not manage his diary.
Updated
Cabinet as whole was not consulted about decision to cut 45% top rate of tax, Truss says
Q: Are you absolutely committed to getting rid of the 45% rate of tax?
Yes, says Truss.
She says it raises very little, and complicates the tax system.
Q: Did you discuss scrapping this with the whole cabinet?
No, Truss says. It was a decision the chancellor made.
Q: How would you have felt if you had been in Boris Johnson’s cabinet and he had not consulted you about that?
Truss says during the leadership contest she said she would simplify the tax system. She says budgets are never drawn up in consultation with the whole cabinet.
(The official government line is that this was not a budget.)
Truss refuses to commit to raising benefits in line with inflation
Q: Will you keep the promise to raise benefits in line with inflation?
Truss says Chloe Smith, the work and pensions secretary, is looking at this.
She says the poorest households are getting support from the energy package.
Q: Will pensions go up with inflation?
Truss says she has committed to the triple lock (which means pensions will go up at least in line with inflation).
Truss refuses to commit to increasing departmental budgets in line with inflation
Q: Will you increase departmental budgets in line with inflation?
Truss says she will not write future budgets on this show.
But her core aim is to maximise growth in the economy.
She is committed to “delivering great public services for people”.
Q: That is not the same as saying you will increase budgets in line with inflation.
Truss says she is more focused on outputs than inputs.
Truss refuses to deny that she will cut public spending
Q: Are you going to cut public spending?
Truss says the UK needs to “grow the size of the pie”. Low growth means less money for public services.
Q: Are you going to cut public spending? Simon Clarke, the levelling up secretary, implied this week the state was too large.
Truss says she believes in getting “value for money for the taxpayer”.
There will be a long-term plan for reform, she says.
Q: Are you going to cut spending on public services?
Truss says she will make sure there is value for money for the taxpayers. But she also wants to ensure the country has excellent public services, she says.
Q: Are you going to cut public spending on public services. The fact that you won’t answer directly implies you will.
No it doesn’t, Truss claims. She says she is not in a position to answer now.
Reducing debt as a proportion of GDP depends on how fast the pie is growing, she says.
Updated
Q: The cost of borrowing is going up as a result of the mini-budget.
Truss says the cost of borrowing for the government is not the same as interest rates paid by people with a mortgage.
Q: But it feeds through to that. You cannot just say this is something happening around the world.
Truss says the government made the right decision. The alternative was people paying up to £6,000 on their energy bills, and inflation being 5% higher than it otherwise would have been. And the economic slowdown would have been worse.
So it was right to increase borrowing this winter, she says.
She says the UK has the second lowest borrowing in the G7.
The government needs to bring down borrowing over the medium term. She has a plan to do that, she says. But it would have been wrong not to have acted, she says.
Truss repeats the point about the mini-budget presentation.
I’ve been honest – we should have laid the ground better.
Truss accepts presentation of mini-budget was flawed, saying government should have 'laid the ground better'
Liz Truss says interest rates are going up around the world.
She understands people’s worries about that. And she says she would have prepared people for what would be in the mini-budget more effectively.
I do accept we should have laid the ground better. I have learnt from that. I will make sure in future we do a better job of laying the ground.
Updated
Key event
Laura Kuenssberg is now interviewing Liz Truss on the BBC.
Michael Gove, the former levelling up secretary, is a guest on the programme. He says he wants to hear Truss reassure people. And he says Truss needs to show people she “shares their values”.
There were “a number of mistakes” made in the mini-budget, he says. But he says there is time to correct them.
Tory chair Jake Berry defends party holding champagne reception with City financiers on day of mini-budget
Sophy Ridge is now interviewing Jake Berry, the Tory chair, on Sky.
Q: Did you have a drinks celebration with Tory donors after the mini-budget?
Berry says he was there. It was an event for donors. It was not a specific event for hedge fund managers. But he knows that at least one hedge fund manager was there.
Q: The Sunday Times says, as the markets were crashing, you were at the home of a Tory donors, with hedge fund managers and financiers who may have made money from the fall of the pound. How was that right?
Berry says he does not know that anyone did make money from the fall in the pound. And by the end of the week the pound was up, he says.
Q: How was the chancellor’s mood as he was drinking champagne?
Berry says he does not think Kwasi Kwarteng was drinking champagne. He thinks he was having a soft drink.
Q: The Sunday Times says Kwarteng gave “insights” into future policy at the event.
Berry says he did not hear that. Kwarteng gave a speech at the event. In that speech, he did not give any insight into future plans. And Berry says he is “sure” Kwarteng did not do that in private conversations either.
Truss says she will extend number of firms qualifying as small businesses, allowing them to benefit from less regulation
Here are some more lines from Liz Truss’s interview with Edward Malnick in the Sunday Telegraph.
Truss revealed that she wants to extend the number for firms that qualify as a small business, allowing them to benefit from lighter regulation. She said:
One of the things we’ll be announcing is raising the definition of a small business, in terms of regulation, from 250 employees to 500 employees.
Truss said this move would affect 40,000 firms, and “make it easier for them to get on with their business”.
She confirmed that she wanted to increase certain types of immigration into the UK – although she rejected claims that low-skilled immigration would rise. Malnick reports:
The prime minister rejects claims that she wants to relax immigration rules to increase the number of low skilled migrants coming to the UK, as part of her plan to boost growth. “That’s not true,” she insists, with a frown.
But she appears to confirm that the government will increase the number of seasonal agricultural workers and other “high skilled people” given permission to work in Britain.
“What we want to do, and the home secretary will be laying out more details on this, is make sure we’ve got the right mix of people coming into the country. So the high-skilled people that will contribute to the economy – I have also mentioned previously seasonal agricultural workers, for example, to help with farming. But this is not about getting lots of low skilled workers in, it’s getting people who will contribute to the economy.”
This is confusing beacuse normally seasonal agricultural workers would be described as low-skilled immigrants (even though, done properly, their work requires considerable skill).
She wants to increase the number of childminders available by creating new childminder agencies, the Sunday Telegraph says. Malnick reports:
The Telegraph can also reveal today that one plan being worked up is to increase the number of childminders by boosting the number of specialist childminder agencies. The agencies are registered to be inspected by Ofsted, reducing the administrative burden on individual workers. Ms Truss championed the idea while childcare minister between 2012 in 2014.
She accepted that people would find change “worrying” but she said sticking ith the economic status quo was not an option. She said:
Change is always something that people might find worrying. But what I’m fundamentally saying is we do have to change, and the status quo isn’t an option …
We made promises to people in 2019 that things would be different. And what does that mean? It means more opportunities, higher wages, more investment, and those are all the things that I am seeking to unlock.
Of course, there’ll be resistance to that. Because there is quite a strong consensus around what I describe as a high tax, low growth economy. But ultimately [with] a high tax low growth economy the country becomes poorer.
She defended the decision not to ask the Office for Budget Responsibility to publish a new economic forecast with the mini-budget, implying there was not time. She said:
During Covid we acted quickly and decisively on things like the furlough scheme without an OBR forecast, because the situation was urgent. And I and the chancellor believe that the situation is equally urgent, now, and here.
But the OBR has said it would have had time to publish a forecast alongside the mini-budget, although it has conceded that it would not have been as detailed as normal, because of the lack of time.
She confirmed she will be attending the inaugural summit of the European Political Community (EPC) in Prague later this week. She said:
The reason I’m going to Prague on Thursday is I want to be talking to counterparts across Europe, including ones that are in the European Union and ones that aren’t – it’s a wide variety of countries – about migration, and how we collectively deal with migration. It’s not a problem Britain can solve on our own.
We have a lot of countries people are travelling through to get to Britain. So we need a better solution on that, we need to deal with the problem upstream, so that’s what we’ll be talking about, but also energy.
Liz Truss says her critics are ‘declinist’ before Laura Kuenssberg interview at opening of Tory conference
Good morning. During the Tory leadership contest an internal Labour party document, leaked to the media, said that the election of Liz Truss could deliver a 10-point boost in the polls. The briefing, which was received with some scepticism, was intended to stop Labour getting complacent, and it was based on historical figures showing that in the past having a new prime minister normally has resulted in a bounce in the poll. It is now clear that the memo was much more prophetic than anyone realised – only it is Labour that is benefiting from the bounce, not the Conservative party, and that the bounce is worth much more than 10 points.
Of course, it was the mini-budget, not Truss’s election as Tory leader, that made the difference, but that distinction won’t be much consolation to Conservative MPs as they start their conference today in Birmingham. The main divide in the party at the moment is probably between those who think that the damage done by the mini-budget to Truss’s premiership is terminal, and those who think there is some slight chance of recovery.
Here are the latest polling figures from Opinium, which are covered in the Observer.
🚨LATEST @OpiniumResearch /@ObserverUK poll🚨
— Opinium (@OpiniumResearch) October 1, 2022
With the Conservative Party Conference starting today, our latest poll shows Labour's lead has shot up from 5 points to 19 over the Conservatives.
Con 27% (-7)
Lab 46% (+7)
Lib Dem 9% (-1)
Green 6% (-1) pic.twitter.com/0v4OICeR01
The Conservatives have lost a huge amount of their economic credibility.
— Opinium (@OpiniumResearch) October 1, 2022
When we last asked this question on 9th Feb, the Conservatives led on ‘running the economy’ by 1 point, and led on bringing down the national debt and deficit by 4 points. Now Labour leads on both of these pic.twitter.com/y1yj0m1NPI
Truss will be on BBC’s Sunday with Laura Kuenssberg later. (The programme starts at 8.30am, but Truss will probably be on soon after 9am.) It will be her first in-depth TV interview since the mini-budget debacle, and she will be hoping it goes better than her local radio media round on Thursday.
She has given an indication of what she is likely to say in an interview with the Sunday Telegraph in which she insisted that she was going to retain all the measures announced in the mini-budget (many Tories want her to shelve, or abandon, the abolition of the 45% top rate of income tax) and said that Kwasi Kwarteng, the chancellor, was doing “an excellent job”.
Stressing her belief that economic change is necessary, and her desire to “bring people with me on this journey”, Truss also claimed her critics were “declinist”. She told the Sunday Telegraph:
It’s a declinist mentality, the idea that Britain’s best days are behind us and that all this is about is managing the distribution between people, rather than growing the size of the pie. I believe we can grow the size of the pie. But we need to take the tough decisions to do that.
Here is the agenda for the day.
8.30am: Jake Berry, chair of the Conservative party, is among the guest on Sky’s Sophy Ridge on Sunday.
8.30am: Liz Truss is interviewed on the BBC’s Sunday with Laura Kuenssberg. Rachel Reeves, the shadow chancellor, is also being interviewed.
From 12pm: Conference fringe events start.
3pm: Michael Gove, the former levelling up secretary, takes part in an ‘in conversation’ fringe event organised by the Tory thinktank Onward.
4pm: The formal conference proceedings start, with speeches from Penny Mordaunt, leader of the Commons; Andy Street, mayor of the West Midlands; Jake Barry, chair of the party; Chris Heaton-Harris, Northern Ireland secretary; Douglas Ross, Scottish Conservative leader; Andrew RT Davies, Welsh Conservative leader; Robert Buckland, Welsh secretary; and Ben Wallace, defence secretary.
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