A summary of today’s developments
Kwasi Kwarteng’s response was “let’s see” when grilled about an imminent U-turn on his flagship cut to corporation tax. The chancellor told the Telegraph that ensuring corporation tax stayed “competitive” remained a “great idea”, but did not rule out increasing the current 19% rate. In response to a question about how markets “have improved today because they think you’re about to do a U-turn on corporation tax”, Kwarteng said: “Let’s see.”
The chancellor earlier said his “total focus is on delivering on the mini-budget” in response to speculation about a U-turn on the measures. Kwarteng said he is “not going anywhere”. Liz Truss is on the cusp of putting up corporation tax as part of a Downing Street plan to back down from the huge package of unfunded tax cuts in her mini-budget, sources claim.
Senior Conservatives are holding talks about replacing Liz Truss with a joint ticket of Rishi Sunak and Penny Mordaunt as part of a “coronation” by MPs, according to The Times. Party grandees are understood to be in talks about replacing Truss with a “unity candidate”
Former home secretary Priti Patel has become the latest high-profile Tory MP to suggest the government could be forced into a further U-turn over the mini-budget. Patel was asked if Liz Truss’s commitment not to raise corporation tax should be reversed to calm the markets. “There is an irony to this,” Patel told Sky News. “In that market forces will probably dictate some of these changes now. “The market is going to dictate this, primarily because we want to see stability.”
The former Conservative chancellor George Osborne has questioned why Liz Truss and Kwasi Kwarteng would wait till 31 October to perform an “inevitable U-turn” on their mini-budget. Osborne tweeted: “Given the pain being caused to the real economy by the financial turbulence, it’s not clear why it is in anyone’s interests to wait 18 more days before the inevitable u-turn on the mini budget.”
Labour MP Christina Rees has been stripped of the party whip after allegations of bullying her constituency staff, the Guardian can reveal. Rees, who was shadow Wales secretary during Jeremy Corbyn’s time as leader, will now sit as an independent in the House of Commons. It is understood that there will be an internal Labour party investigation into the allegations and Rees, the MP for Neath, will have her party membership suspended until the case is resolved.
Downing Street has refused to rule out the prospect that some government departments could face cuts to their budgets. Overall government spending will continue to rise in real terms, the PM’s official spokesperson said.
The latest YouGov/Times voting intention poll shows Labour maintaining the massive lead they opened up over the Conservatives last month. The figures show the Tories on 23% of the vote (up by one point from the previous poll) to Labour’s 51% (which is down one point).
Labour has pledged to ban fracking “once and for all” as it hit out at suggestions that the government could move to ban solar farms from much of England’s farmland.
The party intends to work with MPs who oppose fracking to force the government to maintain the ban, one of several issues to divide the Conservatives since Liz Truss became leader.
The new administration’s environmental commitments have come under severe scrutiny in recent weeks after lifting England’s fracking ban, in place since 2019 following a series of earth tremors, and giving the green light to the expansion of oil and gas operations in the North Sea.
Ed Miliband, Labour’s shadow climate secretary, will visit Bassetlaw on Friday to meet with the party’s candidate Jo White and local residents to listen to concerns about the potential for fracking in their area.
Labour is working to bring forward an opposition day motion to maintain the current ban, Miliband is expected to tell locals during his visit.
He said: “Labour will stand with communities in opposing the Conservatives’ dodgy plans to impose expensive, dirty, and dangerous fracking on the British people.
“Fracking would make no difference to energy prices, and could risk the health of local communities, nature, and water supplies.”
A senior Tory MP believes it is “premature” for the party to think about getting rid of Liz Truss, amid reports that some Conservatives are holding talks about replacing the prime minister with a joint ticket of former leadership contenders Rishi Sunak and Penny Mordaunt.
The MP told the PA news agency that it would be seen as “completely bonkers to have three prime ministers in one year”.
Anna Soubry, a former Conservative MP, has said it is time for Labour leader Sir Keir Starmer to be prime minister.
In response to a tweet asking “is it time for Rishi”, Soubry, a criminal lawyer, said: “It’s time for #KeirStarmer - he’d be a prime minister we could trust to deliver what we desperately need - stability, competence and honesty.”
It’s time for #KeirStarmer - he’d be a Prime Minister we could trust to deliver what we desperately need - stability, competence and honesty. https://t.co/jIKKtymL4J
— Anna Soubry (@Anna_Soubry) October 13, 2022
Senior Conservatives are holding talks about replacing Liz Truss with a joint ticket of Rishi Sunak and Penny Mordaunt as part of a “coronation” by MPs, according to The Times.
Party grandees are understood to be in talks about replacing Truss with a “unity candidate”.
An MP told the newspaper: “Rishi’s people, Penny’s people and the sensible Truss supporters who realise she’s a disaster just need to sit down together and work out who the unity candidate is.
“It’s either Rishi as prime minister with Penny as his deputy and foreign secretary, or Penny as prime minister with Rishi as chancellor.
“They would promise to lead a government of all the talents and most MPs would fall in behind that.”
Here is a selection of some of Friday’s front pages.
FT UK: @trussliz ready to rip up tax-cut package in desperate bid to save Premiership #TomorrowsPapersToday pic.twitter.com/aiusxbQq4F
— Neil Henderson (@hendopolis) October 13, 2022
I: PM plans tax cut U-turn while @KwasiKwarteng is out of the country #TomorrowsPapersToday pic.twitter.com/5VFa9TzG8k
— Neil Henderson (@hendopolis) October 13, 2022
In the latest round of extraordinary polling, a survey by People Polling for the Daily Telegraph has found Labour’s lead has stretched to a huge 34 points, with Labour on 53% and the Conservatives at just 19%.
In worse news for Liz Truss, just 9% of the public have a favourable view of her.
Prof Matthew Goodwin, the pollster behind the research, told the newspaper [£]: “These numbers mean that Liz Truss is more unpopular than Boris Johnson and Jeremy Corbyn ever were – she is basically in what I would call Prince Andrew territory.”
Updated
Liz Truss has bowed to intense pressure from Conservative MPs and the markets by agreeing to redraw her mini-budget, paving the way for a major U-turn on her signature corporation tax cut.
In another serious blow to her authority as prime minister, government sources told the Guardian that a climbdown on the plan to scrap the rise in corporation tax was now “on the table”.
After weeks of defending the proposal, Downing Street officials and ministers are now trying to balance the books after announcing a huge package of unfunded tax cuts.
Read our full story of the day’s events here
The former minister Johnny Mercer has hit out at the government as he shared how his constituents have been impacted by rising interest rates after the mini-budget.
He described the impact on mortgage holders and people seeking to buy a home as “politically unsurvivable”.
He tweeted: “Dozens of these across Plymouth. I want you to know that I get it, that most of us get it, and that we will do all we can to change it.
“Heartbreaking. Unconscionable. Politically unsurvivable. I got into politics to help people like this. Will not stand and watch it burn.”
Alicia Kearns, the new chairwoman of the Commons Foreign Affairs Committee, suggested the government’s tax cuts should be scrapped to calm the markets.
She was asked on LBC’s Tonight With Andrew Marr whether she would like to see the tax cuts reversed.
“Do I think we should be borrowing en masse where our children have to pay this back for decades to come? No, I don’t,” she said.
Pressed by Marr, she stressed that sometimes governments need to take “extraordinary steps”.
“But clearly, in the approach and the manner in which this has been done, that is the issue. Because the markets are not woke, the markets are not left.
“The fact they are not lefty, anti-government, the fact they have been spooked, is something that should be taken incredibly seriously. And often it is about the manner, and the fact is we govern only with the support of the people, and we are not bringing them with us currently.
“We all want Liz Truss to succeed in that the country needs her to succeed. And it is about recognising that actually, sometimes baby steps can result in more meaningful and embraced change than perhaps a bonfire.”
Giles Wilkes, a former special advisor to Theresa May, believes Liz Truss is facing “possibly the most difficult situation a prime minister has been in this side of the Second World War”.
Wilkes, a senior fellow at the Institute of Government, told Sky News: “I can’t think of somebody who’s put themselves into such a position where they’re forced to defend something that nobody else thinks is defensible, and forced to contemplate really tough measures like slashing benefits or slashing important government spending budgets in order to try to keep a policy that nobody else believes can go on the road.
“It’s an incredibly difficult position, but right now, she’s playing for survival stakes. She has to think, ‘what do I need to throw overboard in order to keep things going?’ And if it’s pretty much all the policies announced in the so-called mini budget, then that’s the only thing I can think she can do.”
Wilkes said it is difficult to see how the Conservative party could justify a change of leadership without a general election and a U-turn on the mini-budget “might be the only way the government can actually get out of this self-made disaster”.
The prime minister has been warned not to row back on key social care reforms as this would be to “abandon some of the most vulnerable people in our society”.
Sir Andrew Dilnot said pulling back on promised reforms would be “deeply regrettable”, and that he hopes Liz Truss is the PM who “finally” sees through substantial change for the sector.
Sir Andrew, who led a review into the future of funding social care under the coalition government and was the architect of the original plans for a care cap, said it is “absolutely essential” the current government’s planned reforms while “less generous” than those he set out, go ahead as scheduled.
A Department of Health and Social Care spokesperson said: “Reforming social care is a priority. That’s why we’re backing the sector with £5.4 billion over the next three years to support our planned reforms, bolster the workforce and protect people from unpredictable care costs.
“We are working with local authorities, our charging reform trailblazers, care providers and other stakeholders - including the Local Government Association - to implement the changes and make sure everyone can access the care they need, when they need it.”
Liz Truss put adherence to principle at the heart of her bid for the leadership of the Conservative party, often using her support for cutting corporation tax to illustrate a wider preference for letting people and businesses keep more of their own money.
However, now the policy has been mooted as one of those that could be chopped to help fill a £65bn black hole of unfunded revenue loss in the mini-budget.
These are the pledges Truss and some of her most senior supporters made during the course of her campaign and premiership so far:
Former home secretary Priti Patel has also spoken about her time as a politician, citing her personal experience of harassment.
She told Sky News: “I’ve had consistent levels of, I think, harassment and abuse.
“So harassment is just intimidation, unkind things that obviously are said to me.”
The BBC has found Gary Lineker in breach of the broadcaster’s own impartiality guidelines after he tweeted about the Conservative party taking money from Russian donors.
The Match of the Day presenter made the comment in February while responding to the then-foreign secretary, Liz Truss. She had said English football teams should not play in the Champions League final then to be held in Russia, due to the invasion of Ukraine.
Lineker quote-tweeted Truss’s demand with the observation: “And her party will hand back their donations from Russian donors?”
Jim O’Neill, a crossbench peer who worked as a Treasury minister for George Osborne, said Kwarteng should abandon his mini budget and announce the reversal today.
“As tough as it is politically, the quicker they reverse the better. To carry on down this path is not far off insanity,” he told Radio 4.
The problem is that it gets worse by the day,” he said. “Even if the markets are becalmed by the Bank of England’s intervention.”
The former chief economist of Goldman Sachs Asset Management, who is conducting a review of business taxes for the Labour Party, said investors and businesses were suspicious of the government’s sincerity after ministers denied the mini budget had triggered chaos in financial markets.
“They have awaken any (investors) who has exposure to UK interest rates or the pound anywhere in the world. It is not just a bunch of nasty people. It is people who have to deal with commercial realities,” said.
Three options were open to Kwarteng: to reverse all the measures in the mini budget, or to announce benefits cuts and other savings to close the £60bn shortfall in the government’s finances
“Or hope for the best and “wing it”, he said. Which is sort of vaguely what they are trying to do. But the markets could cause chaos and it is slightly frightening that they don’t seem to be aware of that.”
The prime minister’s economics guru Prof Patrick Minford says it would be “insane” to rip up the mini-budget.
He told BBC Radio 4’s PM programme: “It’s really important we don’t do something really stupid at this point.
“Liz Truss’s policies for growth are absolutely right and to be thrown off them by a bit of market turbulence is insane.”
He argued against U-turns, saying the Bank of England “needs to be much more active in its policies of intervention in the gilts market”.
Asked if he had predicted the market turmoil triggered by the mini-budget, the economist said: “Obviously, at the moment, the markets are facing enormous turbulence because of worldwide tightening of money, and so there’s a great deal of nervousness about.
“But I think the way to handle that is to deal with market turbulence in our gilts market directly through QE (quantitative easing) and then to keep the policies going.”
Updated
Kwasi Kwarteng says 'let's see' when asked about potential U-turn on corporation tax
Kwasi Kwarteng’s response is “let’s see” when grilled about an imminent U-turn on his flagship cut to corporation tax.
The chancellor told the Telegraph that ensuring corporation tax stayed “competitive” remained a “great idea”, but did not rule out increasing the current 19% rate.
In response to a question about how markets “have improved today because they think you’re about to do a U-turn on corporation tax”, Kwarteng said: “Let’s see.”
Speaking in Washington, he also refused to rule out changing other elements of his £43bn package of tax cuts.
“I’m not going to play those games about what’s in or out or any of that. What I’m totally focused on is making sure that we get growth in the economy.”
Updated
Priti Patel: Market forces could make mini-budget U-turn unavoidable
Former home secretary Priti Patel has become the latest high-profile Tory MP to suggest the government could be forced into a further U-turn over the mini-budget.
In an interview with Sky News, due to be aired in full later, Patel was asked if Liz Truss’s commitment not to raise corporation tax should be reversed to calm the markets.
“There is an irony to this,” Patel said.
“In that market forces will probably dictate some of these changes now.
“The market is going to dictate this, primarily because we want to see stability. Stability is absolutely crucial, for everyone to carry on living their lives, for the institutions to function, but actually for the British people to have the stability that they need in their lives as well.
“And by that, as well, I mean mortgages, interest rates and all those crucial, crucial levers.”
Updated
UK government bonds and the pound rallied amid speculation that Liz Truss’s government could be forced to U-turn on its unfunded tax cut plans.
Pressure on gilts - UK government bonds - also eased as the Bank of England sought to steady market sentiment by increasing its bond-buying activity ahead of a Friday deadline.
According to reports, No 10 and the Treasury are holding talks over whether to abandon more of the Government’s £43 billion tax-cutting plan which could include reversing the decision to cancel planned rises in income tax.
Foreign secretary James Cleverly earlier declined to rule out further U-turns, but insisted the government will “absolutely stick” to its tax-cutting principles.
The prime minister’s official spokesman made clear there will be no further changes.
The number of mortgage defaults are expected to rise in the coming months, according to Bank of England data released on Thursday, while the number of new loans will continue to fall amid warnings that the “golden era” of cheap deals is ending.
The UK central bank’s latest quarterly credit conditions survey paints a gloomy picture, with the number of mortgage deals already falling before the chancellor’s mini-budget on 23 September.
Kwasi Kwarteng’s package of unfunded tax cuts led to chaos for homebuyers, with hundreds of fixed-rate deals withdrawn over the space of a few days, before lenders returned with significantly more expensive deals.
Shadow chancellor Rachel Reeves said that while there were “global factors at play” in the economic crisis it was vital that “in that environment, don’t fan the flames”.
The government are behaving like pyromaniacs, setting ablaze the UK economy,” she told the PA news agency.
“It is ordinary working people who are paying the price for that.”
Asked if chancellor Kwasi Kwarteng was on borrowed time, she said: “The Prime Minister and Chancellor introduced this package of measures together.
“The Prime Minister has been in office for just one month and has already caused so much damage.
“The public are sick and tired of it, they want the Government to think again and to U-turn, and if the Government aren’t capable of providing the leadership the country needs, Labour absolutely is.”
Ministers have been accused of “escalating harm to patients” by “failing to properly invest in or resource” the NHS, the Guardian’s Andrew Gregory reports.
“Our NHS is falling apart before our eyes”, the chair of the BMA, Prof Philip Banfield, said.
His remarks come as the latest figures show the number of people waiting for hospital treatment has hit a record high of seven million in England.
Breaking: The British Medical Association, @TheBMA, accuses ministers of "escalating harm to patients" by "failing to properly invest in or resource" the NHS, warning that "nowhere near enough is being done to save it," and as a result, "our NHS is falling apart before our eyes".
— Andrew Gregory (@andrewgregory) October 13, 2022
The international trade secretary, Kemi Badenoch, has urged fellow Tory MPs to unite behind Liz Truss and the government’s growth plans.
She said she agreed with the foreign secretary, James Cleverly, that “to even talk about changing the leader at this time would be disastrous”.
Speaking during a visit to a distillery in East Lothian, Badenoch dismissed talk of a general election. She said:
I’m very focused on the prime minister’s growth agenda, selling exports and making sure that we continue to grow and create jobs for people. That is absolutely not the sort of thing that is on my mind at all.
John Stevens from the Daily Mirror quotes Treasury sources as saying that Kwasi Kwarteng has not left Washington DC.
The chancellor is not attending an IMF meeting of G20 finance ministers because he is in a bilateral meeting with another finance minister, he said.
Kwasi Kwarteng has NOT fled Washington DC, according to Treasury sources
— John Stevens (@johnestevens) October 13, 2022
He's not in main IMF meeting right now as he's taking part in a bilateral meeting with another finance minister
Downing Street has refused to comment on reports that discussions are ongoing at No 10 on U-turns in the government’s mini-budget.
Asked whether an imminent change is possible, a No 10 spokesperson said
Again, I just have to repeat that our position hasn’t changed and the Chancellor was very clear that he and the PM are working to deliver the growth plan.
Asked if talks are being held on possible U-turns, the official said:
Again, work is ongoing between the Chancellor and the prime minister, as you’d expect, ahead of the medium-term fiscal plan. The focus of both the Chancellor and the PM are on delivering the growth plan and the position has not changed.
On whether there had been discussion about dropping the corporation tax cut, they said:
I wouldn’t comment on meetings the prime minister has.
A former Conservative chief whip, Julian Smith, has cryptically tweeted the dictionary definition of the word “confidence”.
Confidence
— Julian Smith MP (@JulianSmithUK) October 13, 2022
/ˈkɒnfɪd(ə)ns/
noun
11. ⁰the feeling or belief that one can have faith in or rely on someone or something.
The chancellor, Kwasi Kwarteng, reportedly did not attend a meeting of G20 finance ministers at the IMF in Washington.
Sky News’ Mark Stone says the Bank of England governor, Andrew Bailey, was at the meeting but was told Kwarteng’s deputy would stand in for him.
G20 Finance Ministers & Bank Chiefs are in a long meeting at IMF now.
— Mark Stone (@Stone_SkyNews) October 13, 2022
BoE Governor Bailey there but Chancellor is not.
Treasury team seen outside meeting telling organisers that Kwarteng’s deputy will stand in.
We know that Kwarteng did meet G20 counterparts for breakfast. pic.twitter.com/CTEgE70alh
Asked if he knew why the chancellor was not present at the meeting, Bailey said: “That’s a question for the chancellor.”
The Bank of England governor, Andrew Bailey, just left the G20 finance ministers meeting at the IMF.
— Mark Stone (@Stone_SkyNews) October 13, 2022
I asked him if he knew why the chancellor wasn’t in attendance.
“That’s a question for the chancellor” he told me.
The head of the International Monetary Fund (IMF), Kristalina Georgieva, was speaking to reporters in Washington earlier today where she was asked about reports of a UK government U-turn over its mini-budget.
Speaking before Kwasi Kwarteng’s interview, Georgieva said it is sometimes right for a “recalibration” of policies.
She said:
I do believe it is correct to be led by evidence, so if the evidence is that there has to be a recalibration, it is right for governments to do so.
She added:
Don’t prolong the pain – make sure actions are coherent and consistent.
Updated
While the chancellor, Kwasi Kwarteng, has insisted “our position has not changed” in his earlier interview, the Guardian’s Jessica Elgot points out that this isn’t the same as saying “our position will not change”.
The key thing is that "our position hasn't changed" is not the same as "our position will not change."
— Jessica Elgot (@jessicaelgot) October 13, 2022
A former cabinet minister has told the News Agents podcast’s Jon Sopel that Liz Truss “has unleashed hell on this country”.
Sopel says the language being used by senior Tories about the PM is like nothing he has seen before.
A cabinet minister until a few weeks ago has just told me @trussliz ‘has unleashed hell on this country.’ The language being used by senior Conservatives, the incredulity, the cold fury is like nothing I’ve seen in decades of covering UK politics
— Jon Sopel (@jonsopel) October 13, 2022
Despite the chaos in Downing Street as officials rake over bits of the mini-budget, Liz Truss put aside around 50 minutes for one of her first “listening exercises” with a handful of Tory MPs.
She sought to defuse tensions in the party by inviting them to chat about issues and pet projects in their area over tea and Pret a Manger sandwiches.
The PM and a seemingly random assortment of backbenchers from different intakes and regions chatted predominantly about infrastructure, sources told the Guardian.
One Truss supporter who attended said she was “very buoyant”, but a sceptic said it was just incredibly awkward.
“It’s so fucking transparent,” they sighed. “We’re only there because she’s in trouble.”
There was no mention of the elephant in the room – the looming prospect of further U-turns on the mini-budget.
Updated
The editor of ConservativeHome, Tim Montgomerie, says he would resign if he were in Liz Truss’s position after the country and markets “resoundingly” rejected the PM’s signature agenda.
If I was Liz Truss I wouldn’t wait to be thrown out of office by my party. I hope I’d resign. The country and markets have resoundingly rejected my signature agenda. It would be entirely self-serving to stay in office without mission, without credibility and without popularity.
— Tim Montgomerie 🇬🇧 (@montie) October 13, 2022
Updated
The work and pensions secretary, Chloe Smith, refused point blank to answer questions about the possibility of more U-turns when quizzed following a speech in Westminster about getting more people into jobs.
Asked if more tax cuts might be reversed, Smith said:
I think you know that I’m not in a position to answer your question this afternoon.
She added:
I’m going to have to say that quite straightforwardly to you and anyone else who would like to ask the same question – as you know, that will be a matter for the chancellor.
Asked a similar question later on in the Q&A, Smith simply ignored the question.
Former chancellor Osborne says U-turn is 'inevitable'
The former Conservative chancellor George Osborne has questioned why Liz Truss and Kwasi Kwarteng would wait till 31 October to perform an “inevitable U-turn” on their mini-budget.
Given the pain being caused to the real economy by the financial turbulence, it’s not clear why it is in anyone’s interests to wait 18 more days before the inevitable u-turn on the mini budget
— George Osborne (@George_Osborne) October 13, 2022
Labour’s former shadow chancellor Ed Balls says he agrees with Osborne.
I agree with George.. https://t.co/0oYsKUXoIi
— Ed Balls (@edballs) October 13, 2022
Updated
Here are some more lines from the chancellor, Kwasi Kwarteng, who has just been speaking from Washington where he is attending the International Monetary Fund’s annual meeting.
He said:
Our total focus is on delivering on the mini-budget shortfalls and making sure that we get growth back into our economy. That’s the central prize. That’s the main focus of my job.
Asked if it was “humiliating” that officials were discussing filleting the fiscal statement he made just weeks ago, Kwarteng replied:
I speak to No 10. I speak to the prime minister all the time. We are totally focused on delivering the growth plan.
Asked if he would consider his position as chancellor if he had to U-turn on a major part of the mini-budget, he once again refused to answer this directly and said he was “totally focused on the growth agenda”.
The chancellor was also asked if he would acknowledge there were specific problems in the UK following his statement. He said:
What I am going to acknowledge is the fact that it is a very dicey situation globally. That’s what people are saying to me.
He added:
I think there was some turbulence after the meeting, but we’re sitting here talking about the global challenges. Everybody is focused on inflation, everybody is affected by potential interest rate rises, everybody’s affected by the energy price spikes, which have been exacerbated by Putin’s illegal war in Ukraine.
So everybody across the global financial community is really focusing on the same problems.
Updated
Kwarteng says he is ‘not going anywhere’
The chancellor, Kwasi Kwarteng, said his “total focus is on delivering on the mini-budget” in response to speculation about a U-turn on the measures.
Kwarteng said he is “not going anywhere” and refused to rule out any changes in the future. He acknowledged that there was “some turbulence” after the mini-budget but said it’s a “very dicey situation globally”.
Speaking from an International Monetary Fund summit, he said:
I speak to Number 10, I speak to the prime minister all the time - and we are totally focused on delivering the growth plan.
Asked whether Liz Truss will be prime minister next week and whether he will remain chancellor, Kwarteng replied:
Absolutely 100%, I’m not going anywhere.
Updated
The Conservative former minister, Dame Andrea Leadsom, has jumped to Liz Truss’s defence and said the prime minister “needs a chance to settle in” and “get things under control”.
Speaking as she picked up her damehood at Buckingham Palace on Thursday, Leadsom said:
I think we all have to give the prime minister a chance to settle in. There’s been a huge amount of turmoil over the last few weeks within the nation, and the prime minister must be given a chance to get things under control and start to make progress on what is a very important agenda of growing the economy.
The Guardian’s Peter Walker is at a speech by the work and pensions secretary, Chloe Smith, about how to get people into work.
Journalists have been told to keep questions “on the topic of the speech” rather than mini-budget U-turns, he says.
I’m at a speech where work and pensions secretary Chloe Smith is talking about how to get people into work. There will be questions, and we have been asked to keep them “on the topic of the speech” rather than mini-budget U turns. Good luck with that. pic.twitter.com/leQAUmIEIy
— Peter Walker (@peterwalker99) October 13, 2022
As the Mirror’s Ashley Cowburn points out, that might not work exactly as Smith’s team hopes.
This will just encouarge every journalist in the room to ask about the mini-budgethttps://t.co/37KUWENpmZ
— Ashley Cowburn (@ashcowburn) October 13, 2022
Liz Truss may raise corporation tax in further budget U-turn
Liz Truss is on the cusp of putting up corporation tax as part of a Downing Street plan to back down from the huge package of unfunded tax cuts in her mini-budget, sources claim.
The prime minister has been under intense pressure from jittery Conservative MPs to stage a major economic U-turn to calm the markets in the face of a financial storm.
However, the move would represent a massive climbdown as her promise to cancel Rishi Sunak’s plans to put up corporation tax from 19% to 25% was a central pledge of her leadership campaign.
One government source told the Guardian that No 10 officials were reviewing the mini-budget in order to shore up Truss’s premiership after Kwasi Kwarteng’s disastrous economic growth plan last month.
Another source suggested that the option of raising corporation tax was “on the table” as the prime minister tries to balance the books – although this may be by just one or two per cent.
They indicated that no decision would be announced until the chancellor had returned from Washington, where he is at a meeting of the International Monetary Fund, on Friday. However, there was speculation on Whitehall that the scale of the U-turn could make it impossible for Kwarteng to continue in post.
The chancellor, Kwasi Kwarteng, has told Channel 4 News’ Siobhan Kennedy that he will not be pre-empting his Halloween statement.
Just got the Chancellor on the way in to the IMF who told me.” I’ll be coming out with a statement on 31 October and I’m not going to preempt that.” @Channel4News
— siobhan kennedy (@siobhankennedy4) October 13, 2022
Updated
The Spectator’s James Forsyth writes that the government is now facing a new problem. Amid rumours the government could make a U-turn on its plan to not raise corporation taxes, the market has rallied.
Now, Liz Truss can’t afford not to U-turn.
The problem for the government is that the markets are now pricing on a u-turn, so if they don't u-turn they will be in a worse position than they were 24 hours ago
— James Forsyth (@JGForsyth) October 13, 2022
Robert Shrimsley from the Financial Times has also made this point.
Truss now has another major problem. If she is not preparing to u-turn on the budget she can't allow the markets to believe one is coming. So if she let's this hare run much longer the markets will punish her even further for not doing it
— robert shrimsley (@robertshrimsley) October 13, 2022
Updated
Choices facing Truss and Kwarteng are ‘appalling’, says former Tory chancellor
The former Conservative chancellor, Lord Norman Lamont, said the choices facing Liz Truss and Kwasi Kwarteng are “appalling” and that he would support a reversal of the mini-budget.
Speaking on BBC Radio 4’s World at One programme, he said:
Sometimes it’s said that politics is the art of the possible. I think it’s the art of choosing between the incredible and the utterly impossible.
The government has three choices, he said: reverse the changes in the mini-budget; make public expenditure cuts, which the PM has ruled out'; or try to “fudge the arrangement” with the Office for Budget Responsibility.
He added:
If they do reverse the budget, I would support them, but I personally think that’s rather unlikely.
Updated
The Conservative MP, John Baron, said Liz Truss’s government has displayed a lack of “compassionate conservatism” which has led to a feeling of “caution and concern” among backbenchers.
Speaking on BBC Radio 4’s World at One programme, Baron said:
The mood, generally, is one of caution and concern. For me, it’s about the lack of compassionate conservatism, the breaking of the link between benefits and inflation during the cost-of-living crisis is wrong. But the optics are also wrong when we’ve also been proposing a cut in the 45p rate of tax.
So, that, together with a lack of reassurance to the markets when it came to the mini-budget, about the borrowing and the spending requirements and cuts too, you know, has all added to the general air of concern.
Asked if he thinks Truss is a compassionate Conservative, Baron replied:
I do. I just think the messaging has been poor and the optics have been terrible.
Updated
The shadow chancellor, Rachel Reeves, said reports of potential U-turns on the mini-budget demonstrate that the government is in a state of “utter chaos”.
Reeves said:
Today’s mess shows the utter chaos this government is in. This is a crisis made in Downing Street and working people are paying the price.
Labour has said repeatedly that they need to reverse the kamikaze budget and restore confidence.
This is now urgent as the Bank of England’s intervention in the markets ends tomorrow. The Tories cannot allow the chaos caused by their mini-budget to continue any longer.
Updated
Prof Sir John Curtice, a political scientist and professor of politics at the University of Strathclyde, has been talking to the BBC’s World At One programme about the latest polls and the view of Liz Truss in the country.
Liz Truss is now deeply unpopular. She is more unpopular than Boris Johnson was at the worst period of his premiership, which was in the middle of January this year when the Partygate scandal was at its height.
He says she’s about as popular as John Major was a few weeks after Black Wednesday in September 1992 and he says it feels like history is repeating itself. He says there is a public perception that the government does not know what it is doing and that is leading to market instability. He points out Major was not able to recover from Black Wednesday, despite delivering the economic growth Truss has pinned her future on.
Asked how the public feel about Truss, he points out:
She has got two problems: one is that she isn’t really liked. Her personality is not one that warms the general public. Secondly, she is regarded as incompetent.
Updated
The Sun’s Harry Cole is reporting that the prime minister is plotting a “spectacular” U-turn, having made a vow to cancel Rishi Sunak’s corporation tax hike from 19% to 25% the centre of her campaign to be the Tory leader.
🚨 LIZ Truss is considering raising Corporation Tax next year in spectacular mini-Budget u-turn
— Harry Cole (@MrHarryCole) October 13, 2022
Her vow to cancel Rishi Sunak's hike from 19 to 25 per cent tax next April was the centrepiece of her campaign to be PM - but that promise could now be junked https://t.co/lGdqSgH0WB
Updated
Labour MP Christina Rees stripped of party whip after bullying allegations
A senior Labour MP has been stripped of the party whip after allegations of bullying her constituency staff, the Guardian can reveal.
Christina Rees, who was shadow Wales secretary during Jeremy Corbyn’s time as leader, will now sit as an independent in the House of Commons.
It is understood that there will be an internal Labour party investigation into the allegations and Rees, the MP for Neath, will have her party membership suspended until the case is resolved.
Local party members claimed that several of her staff had made detailed statements, which they said were backed up with evidence, to Labour headquarters about claims of bullying.
One senior constituency figure claimed the alleged behaviour had been going on for years.
Rees, who won the South Wales seat in 2015, taking over from Labour former cabinet minister Peter Hain, will become the 14th MP to sit as an independent, equalling the number of Lib Dem MPs in the Commons.
Updated
Many Tory MPs are still waiting to hear the chancellor, Kwasi Kwarteng, present his debt-cutting plan on 31 October before making a decision about whether to support him and Liz Truss, according to ITV News’ Anushka Asthana.
Despite the febrile mood among Tory MPs (one described 1922 as “outpouring of despair” - many still see October 31 as key day. That is the moment that the PM and CX either do or don’t turn it around. Although as @nicholaswatt pointing out-lots of rumours about action ahead of it.
— Anushka Asthana (@AnushkaAsthana) October 13, 2022
The pound has risen in the last half hour as rumours circulate that the government could make a U-turn on its planned cuts to corporation and dividend taxes.
The pound has surged 1.4% to $1.1259 against the dollar.
For more business updates, do follow our live blog:
BBC Newsnight’s Nicholas Watt has been told by one former cabinet minister to “brace for the mother of all U-turns” on the mini-budget today.
A former cabinet minister tells me: “Brace for the mother of all U-Turns on the mini budget today. A friendly person in the know is advising us to steer clear of the media today to avoid the explosion. We wouldn’t want to look silly by tomorrow.” #waitandsee
— Nicholas Watt (@nicholaswatt) October 13, 2022
Bloomberg is also reporting that officials at No 10 and the Treasury are working on a U-turn for Liz Truss’s mini-budget.
Officials are drafting options for Truss but no final decision has been taken and they are waiting for the chancellor, Kwasi Kwarteng, to return to London from Washington, the news outlet quotes a person familiar with the matter.
From Bloomberg’s Kitty Donaldson:
NEW: Officials in Downing Street are working on a U-turn on Liz Truss's tax plans, but no decisions will be made before Chancellor Kwasi Kwarteng gets back from the IMF in Washington
— Kitty Donaldson (@kitty_donaldson) October 13, 2022
Updated
'Active' discussions under way in No 10 about scrapping parts of mini-budget – reports
Sky News’ Sam Coates writes that “active” discussions are under way in Downing Street over whether to scrap parts of the mini-budget.
This is despite the fact that Downing Street has just promised there will not be any more U-turns on the government’s mini-budget.
There is “a conversation going on inside government” about “whether or not to junk some of the measures from the mini-budget”, according to Coates.
Downing Street denying any changes to mini budget but I'm told by sources discusssions underway over which bits might yet be junked give the scale of the concern
— Sam Coates Sky (@SamCoatesSky) October 13, 2022
Looking at a return to the mandate from the leadership contest
No clarity on timing of announcement if it happens
Updated
The Tory MP, Christopher Chope, says he has “absolute confidence” in Liz Truss as prime minister and that he believes the Conservative party will win the next general election
Descriptions of last night’s 1922 Committee meeting “bear no resemblance to the truth”, Chope told Times Radio. He added:
The truth is that the prime minister was in good form. She was calm and confident. If I was a betting man, I would now be going out and putting money on the Conservatives winning the next general election.
"If I was a betting man I would be going out and putting money on the Conservatives winning the next general election.”
— Times Radio (@TimesRadio) October 13, 2022
Conservative MP Christopher Chope tells @StigAbell that he has “absolute confidence” in Liz Truss and that his critical colleagues should "shut up". pic.twitter.com/MgifFuDLYT
No 10 refuses to rule out prospect of budget cuts at some government departments
Downing Street has refused to rule out the prospect that some government departments could face cuts to their budgets.
Overall government spending will continue to rise in real terms, the PM’s official spokesperson said. They added:
When it comes to departments there is a process to go through which is led by the Treasury. We have made some specific commitments to departments. The prime minister has talked about defence spending, for example.
Beyond that, I am not going to get drawn into specific budgets. It is between those departments and the Treasury.
Updated
The leader of the House of Commons, Penny Mordaunt, has joked that her “resting face” is that of a “bulldog chewing a wasp”.
During an exchange in the Commons, Labour’s shadow Commons leader, Thangam Debbonaire, said her counterpart “couldn’t even muster a nod for her prime minister” at yesterday’s PMQs.
During #PMQs yesterday, "the Leader of the House couldn't even muster a nod for her prime minister", Shadow Leader of the House Thangam Debbonaire says
— BBC Politics (@BBCPolitics) October 13, 2022
"My resting face is that of a bulldog chewing a wasp," says Leader of the House Penny Mordaunthttps://t.co/Oodj8aAmo8 pic.twitter.com/cckD1bBf22
Mordaunt responded:
Let me address the comments the honourable lady makes about my facial expressions: my resting face is that of a bulldog chewing a wasp, and people shouldn’t read too much into that.
The i’s Paul Waugh writes that Mordaunt’s performance today in the Commons gives her a prime opportunity to portray herself as a PM-in-waiting.
Meanwhile, @PennyMordaunt doing a very good job defending Govt's record....Business Questions giving her a prime opportunity to portray herself as a PM-in-waiting.
— Paul Waugh (@paulwaugh) October 13, 2022
Updated
Paul Mason, formerly of Channel 4 News, writes that the smart money is on the imminent exit of Kwasi Kwarteng and his budget.
These extraordinary polls will only narrow once Kwarteng is gone. Smart money has to be on his imminent exit...together with his ridiculous budget 👇🏽 https://t.co/mIBUkqUrgz
— Paul Mason (@paulmasonnews) October 13, 2022
Updated
Downing Street rules out more U-turns on mini-budget
Downing Street has promised there will not be any more U-turns on the government’s mini-budget.
Asked if the prime minister promises there will be no further reversals, her official spokesperson said:
Yes, as I said to a number of questions on this yesterday, and the position has not changed from what I set out to you all then.
Pressed on whether Liz Truss is committed to the timeframes set out for measures in the mini-budget, the official said:
Yes, and obviously as you know the date for the medium-term fiscal plan has been brought forward.
Updated
The former culture secretary, Nadine Dorries, has urged Conservative MPs to #backliz just days after calling for a general election.
Tory MPs who are discussing who should replace Truss as leader “are not taking into account the fact that they cannot foist upon the British public another prime minister that the public have not voted for”, Dorries wrote on Twitter.
MPs circulating a smorgasboard of names re who should replace Truss as PM are not taking into account the fact that they cannot foist upon the British public another Prime Minister that the public have not voted for. A totally untenable position. #backliz
— Nadine Dorries (@NadineDorries) October 13, 2022
Just last week, Dorries suggested Truss should call a general election to obtain a mandate for her policies and said there was “widespread dismay” about the PM’s approach.
The government had “no mandate from the people” to scrap its policy promises under Boris Johnson and start from scratch, Dorries argued last Tuesday. She added:
If we don’t want to deliver on the deal, the promises, we need a fresh mandate.
“It’s how democracy works,” Dorries explained.
We have no mandate from the people to do this.
— Nadine Dorries (@NadineDorries) October 4, 2022
Conservative Gov elected on basis of a manifesto, it’s how democracy works.
People voted in ‘19 on the policy promises we made (and for Boris).
If we don’t want to deliver on the deal, the promises, we need a fresh mandate. https://t.co/Q36iRAUzUH
It appears she is now fine with Britain having had one unelected prime minister, but having two would be a “totally untenable position”.
Updated
Conservative commentators are beginning to turn against Liz Truss, with rightwing newspapers such as the Sun and Daily Mail rounding on her for making a “pig’s ear” of the mini-budget, while other observers suggest her premiership could be extremely short-lived.
Though she was initially heralded by some as a prime minister to drive through true-blue policies with the most radical reforms in decades, unease is growing in Tory circles about her leadership.
Recent market turmoil, a series of screeching U-turns and the expectation more will follow are compounding jitters about Truss’s future.
The Daily Mail, in its editorial on Thursday, reserved the top slot in its three-pronged editorial column to savage the Bank of England governor, Andrew Bailey, but used the second to raise concerns about Truss. It said her “dash for growth is already limping badly after she made a pig’s ear of presenting her ambitious mini-budget and was forced into humiliating U-turns”.
Though critical of her leadership, the Mail, which endorsed Truss during the leadership contest, did say the principle of tax cuts and pursuance of growth was the right one and urged Tory rebels to get behind it.
Emblazoned across the rest of the page was a comment piece by its columnist Stephen Glover. One extract read:
In her abject powerlessness she is like a leader who has been in office for years and has run out of options and support. But she has only just started! And she has a majority of nearly 70.
Meanwhile the Sun, which did not endorse either Truss or Rishi Sunak, used its editorial on Thursday to go after the new prime minister.
Labour 28 points ahead – YouGov poll
The latest YouGov/Times voting intention poll shows Labour maintaining the massive lead they opened up over the Conservatives last month.
The figures show the Tories on 23% of the vote (up by one point from the previous poll) to Labour’s 51% (which is down one point).
Latest YouGov Westminster voting intention (11-12 Oct)
— YouGov (@YouGov) October 13, 2022
Con: 23% (+1 from 6-7 Oct)
Lab: 51% (-1)
Lib Dem: 9% (=)
Green: 7% (+1)
Reform UK: 3% (-2)
SNP: 5% (=)https://t.co/3llaA7uPBq pic.twitter.com/bASz29KgrI
Keir Starmer continues to hold a lead over Liz Truss in terms of the party leader Britons think would make the best prime minister, by 42% to 13%.
Updated
The Times’ Henry Zeffman paints a picture of the scale of the potential rebellion Liz Truss faces from her own MPs.
"If the 22 changed the rules, we'd hit the threshold for a confidence vote in a couple of hours", a Tory MP tells me.
— Henry Zeffman (@hzeffman) October 13, 2022
Safe to say the mood is sulphurous in parliament this morning
The Home Office has taken the modern slavery brief away from the minister responsible for safeguarding and classed it as an “illegal immigration and asylum” issue, updated online ministerial profiles show.
The move is seen as a clear sign that the department is doubling down on Suella Braverman’s suggestion that people are “gaming” the modern slavery system and that victims of the crime are no longer being prioritised.
The previous safeguarding minister, Rachel Maclean, had modern slavery on her official list of ministerial responsibilities but her successor, Mims Davies, has no mention of the crime on her list. Instead, modern slavery is listed at the bottom of the “illegal immigration and asylum” brief of immigration minister Tom Pursglove.
Under Theresa May, the government pledged to be world leaders in combating modern slavery but Braverman said last week that trafficking claims from “people gaming the system” were “derailing the UK’s policy on illegal migration”.
The shadow home secretary, Yvette Cooper, said:
The largest single group of modern slavery victims under the referral system last year were British children – including those who were exploited through county lines. The evidence shows the majority of exploitation takes place in the UK rather than across borders.
The government should be treating this as an enforcement and safeguarding issue and taking stronger action against the crime of modern slavery wherever it takes place.
King Charles’s “dear, oh dear” comments to Liz Truss were a sign of his “empathy” towards her, according to the foreign secretary, James Cleverly.
Footage emerged yesterday from the prime minister’s audience with the monarch at Buckingham Palace.
As Truss curtseyed, and said: “Your Majesty”, Charles replied: “So you’ve come back again?”
While Truss replied: “It’s a great pleasure,” he could only mutter: “Dear, oh dear. Anyway …”
The clip, which came after another day of turmoil in the economic markets and mutinous plotting on the Conservative party backbenches, quickly went viral.
Asked on LBC about the video, Cleverly accused host Nick Ferrari of characterising the King’s comments as a “political statement”.
Cleverly said:
I view it as much more an empathetic statement. He recognises that all of us - everyone in the country - is dealing with a really tough winter ahead.
Here’s the clip in which the foreign secretary, James Cleverly, says removing Liz Truss as prime minister would be a “disastrously bad idea”.
"Changing the leadership would be a disastrously bad idea, not just politically but economically"
— BBC Radio 4 Today (@BBCr4today) October 13, 2022
Foreign Secretary James Cleverly tells @MishalHusain the government recognises it needs to bring certainty to the markets, and defends its growth plans.https://t.co/klR00bNQuK pic.twitter.com/nSdBjiQKy7
And some reaction from journalists to Cleverly’s morning round:
Michael Savage from the Observer says Cleverly was being evasive in refusing to rule out further U-turns, instead insisting the government would “absolutely stick” with its tax-cutting principles.
Another evasive interview from James Cleverly on @BBCr4today - refers to sticking to “the plan” of growth economy. Refuses to say they’ll stick with all tax cuts in the mini-budget. Challenges opponents to explain how tax rises help growth.
— Michael Savage (@michaelsavage) October 13, 2022
HuffPost UK’s Kevin Schofield says it’s astonishing senior cabinet figures are publicly discussing a change in leadership so soon after Truss’s appointment.
James Cleverly: “Changing the leadership would be a disastrously bad idea.”
— Kevin Schofield (@KevinASchofield) October 13, 2022
Astonishing that senior cabinet figures are saying this in public barely a ninety after Liz Truss became PM.
Kate McCann from TalkTV says Cleverly’s line gives some indication of how badly Truss’s circle think things are going.
James Cleverly was asked something like ‘how bad is it for Liz Truss’ and he answered by saying “changing the leadership would be a disastrously bad idea”. Which gives you some idea of how bad those around the PM think things really are… https://t.co/PaRexlfaCU
— Kate McCann (@KateEMcCann) October 13, 2022
Liverpool Echo’s Liam Thorp wonders how Cleverly thinks the British economy is doing, if he believes getting rid of Truss would be bad “politically and also economically”.
Cleverly says it would be bad for the economy to change the Prime Minister
— Liam Thorp (@LiamThorpECHO) October 13, 2022
Just wondering how he thinks the economy is currently doing https://t.co/JEIVkhwlE3
Updated
Attending a Nato meeting, the UK’s defence secretary, Ben Wallace, said there was no risk that western allies would run out of arms supplies to aid Ukraine against Russia.
Wallace said:
The UK-Danish joint-led International Fund is all about placing orders in a manufacturing space to make sure that we can go on between ‘23, ‘24, and keep going on.
He said the UK would provide Ukraine with air defence systems that would complement US-provided systems. Ukraine faced a barrage of missile strikes earlier this week, damaging civilian infrastructure and knocking out electricity supplies in some cities.
For more live updates from the Russia-Ukraine war, head over to our live blog:
Sunak and Mordaunt could replace Truss as PM, says ConservativeHome editor
ConservativeHome editor and former Tory MP, Paul Goodman, has said some Conservative backbenchers are considering pushing for Rishi Sunak and Penny Mordaunt to replace Liz Truss as prime minister.
Speaking on BBC Radio 4’s Today Programme, Goodman said:
All sorts of different people are talking about all sorts of different things because the Conservative backbenchers are casting around for a possible replacement for Kwasi Kwarteng, even for a possible replacement for Liz Truss. All sorts of names are being thrown about, Rishi Sunak, even Boris Johnson, Kit Malthouse, Sajid Javid.
One idea “doing the rounds” is for Penny Mordaunt and Rishi Sunak to “come to some kind of arrangement and essentially take over”, Goodman added.
The pair are popular as between them they got “pretty much two-thirds of the votes of MPs”, he said.
Asked if this would be decided without the party members, he replied:
Yes, I suppose the arrangement would be to come to an agreement about one candidate so the members are a cut-out.
I have to say I’m not very enthusiastic about this kind of idea myself, nor am I enthusiastic about the prospects of the Conservative Party junking what would be its fourth leader in seven years.
Updated
Belfast is the place to be this week, underlining renewed efforts to find a settlement on the Northern Ireland protocol issue.
On Monday, it was the Northern Ireland secretary and minister Chris Heaton-Harris and Steve Baker. US state secretary Antony Blinken’s special adviser Derek Chollet was also there.
On Wednesday it was Ireland's foreign minister Simon Coveney’s turn.
Today a seven-member trade delegation from the European parliament will hold talks with civil society and the Business Brexit Working Group and party representatives.
The delegation is made up of MEPs Nathalie Loiseau (France), Bernd Lange and Sven Simon (Germany) Seán Kelly and Barry Andrews (Ireland), Inma Rodriguez Pinero (Spain) and Ernő Schaller-Baross (Hungary).
Kelly said:
It is essential that we hear the issues of most concern to people and businesses first-hand. These are the people that will need to live with, and accept, the Northern Ireland Protocol. Their voices must be heard in the outcome of any agreed solution between the EU and the UK. I am particularly conscious that without an Assembly formed, Northern Ireland is somewhat lacking a clear voice on these issues, which is unfair and regretful.
Truss facing rebellion from Rees-Mogg over solar power ban
Liz Truss is facing a rebellion from Jacob Rees-Mogg’s business department over plans to ban solar power from most of England’s farmland.
The prime minister and her environment secretary, Ranil Jayawardena, want to ban solar from about 41% of the land area of England, or about 58% of agricultural land, the Guardian revealed earlier this week.
But her business secretary, Rees-Mogg, is understood to believe it is “unconservative” to tell farmers what they can and cannot do with their land. Her climate minister, Graham Stuart, said on Wednesday he would be speaking to Defra about the plans as more ground-mount solar is needed to meet renewable energy targets.
In a piece for the Guardian, Rees-Mogg, who has previously decried “climate alarmism”, insists he is convinced by the need to boost renewable energy. He also reveals new policies including loosening regulations for businesses to put solar power in place and giving homeowners grants to install panels on their houses.
In the piece, he says he is “not a green energy sceptic”, adding that his department would give “unprecedented support” to renewable energy sources. Rees-Mogg also brands coalmines and oil rigs as “dark satanic mills”, vowing to replace them with windfarms.
On solar, he adds:
We are exploring options to support low-cost finance to help householders with the upfront costs of solar installation, permitted development rights to support deployment of more small-scale solar in commercial settings and designing performance standards to further encourage renewables, including solar PV, in new homes and buildings.
Here are some more lines from James Cleverly’s morning interview round.
Cleverly, the foreign secretary, said removing Liz Truss as prime minister would be a “disastrously bad idea” and only worsen market turmoil.
The PM deserves support to push through her economic growth plan, he said:
We have got to recognise that we do need to bring certainty to the markets. I think that changing the leadership would be a disastrously bad idea, not just politically but also economically.
He acknowledged that recent turmoil in the financial markets was linked to the mini-budget, but argued “many of the challenges we are facing are challenges shared by countries around the world”.
He defended the decision by the chancellor, Kwasi Kwarteng, to scrap the planned rise in corporation tax in his controversial mini-budget:
I think that it is absolutely right that we want to invest in businesses. It is absolutely right that we help them stay competitive, we help them stay afloat. We have got to make sure we can compete internationally with the other places businesses can choose to locate. We have got to make sure we are tax-competitive.
He declined to rule out further U-turns but insisted the government should “absolutely” stick with Kwarteng’s budget:
Ultimately, what that mini-budget was about was protecting tens of millions of people from unaffordable energy prices. That was the bulk of that proposal. It was about making sure that taxes for 30 million people were reduced a little bit and those are really strong principles. I think we should absolutely stick with those.
He said the planned statement by the chancellor on 31 October will set out a more “holistic” view of the government’s plans, but the “foundations” of the mini-budget were “really key for the growth agenda the prime minister has put forward”.
Updated
Cleverly: Government will make ‘tough decisions’ on public spending
The foreign secretary, James Cleverly, said the government will be making “professional and tough decisions” on public spending.
Speaking on BBC Radio 4’s Today programme, he said:
There are always areas of public expenditure where we can make sure that the growth doesn’t outmatch the growth in economy.
Defence is going to grow to 3% of GDP. That is above inflation growth. That is committed to. There are other areas where we are going to have to keep it much closer to inflationary growth, but the Prime Minister said we are not going to be cutting public services.
We are going to be making professional and tough decisions and we are going to grow the economy because the economic growth is going to be the thing that unlocks all those options for us. They are not mutually exclusive.
He added that people should not have been surprised by Liz Truss’s plans for growth which formed the basis of Kwasi Kwarteng’s mini-budget.
The PM had “said she would protect people and businesses who were facing an unprecedented increase in their energy bills”, Cleverly said:
That is what she said she would do. That is what she is doing. The fact that that seems to have taken some people by surprise is not her fault. We are going to stick with the plan. The plan is to grow the economy.
Replacing Truss is a ‘disastrously bad idea’, insists Cleverly as PM faces pressure to abandon economic plan
Good morning. Liz Truss is facing intense pressure from within her own Conservative party to abandon her economic plan following a market backlash to the measures.
The prime minister’s leadership is in fresh peril with calls growing among senior Tories to reverse more proposed tax cuts and MPs accusing her of “trashing” Conservative values.
The PM’s allies rallied around her after she endured a bruising appearance at a meeting of her backbenchers on Wednesday evening. MPs described her performance as “just appalling” and raised serious concerns about mortgage rates and polls showing a hefty Labour lead.
At a meeting of the backbench 1922 Committee, the chair of the education select committee, Robert Halfon, told Truss she had “trashed the last 10 years of workers’ Conservatism”. One MP later described the atmosphere as “funereal” and another described the situation as impossible.
But foreign secretary, James Cleverly, came to her defence this morning, arguing that getting rid of Truss as prime minister would be a “disastrously bad idea”.
Speaking on BBC Radio 4’s Today programme, Cleverly said the government needed to do things that would “bring certainty to the markets”.
He acknowledged that recent turmoil in the financial markets was linked to the mini-budget, but argued “many of the challenges we are facing are challenges shared by countries around the world”.
Cleverly said:
I think changing the leadership would be a disastrously bad idea politically and also economically.
We are absolutely going to stay focused on growing the economy.
Here is the agenda for the day.
Morning. Economic Crime and Corporate Transparency Bill - second reading.
2pm. The chancellor, Kwasi Kwarteng, is in the US to meet with IMF leaders in Washington DC.
2pm. Work and pensions secretary, Chloe Smith, at the Policy Exchange in Westminster.
2pm. Weekly Covid-19 surveillance report, from the UK Health Security Agency.
Updated
