23.09.2022
‘New era of Britain’: Kwarteng to unleash economic blitz with huge tax cut announcement

The Chancellor is launching an economic blitz that promises to drive down inflation and push up growth. He will unleash tax cuts to fuel business investment and help hard-pressed workers keep more of their own cash.

Mr Kwarteng will vow to be “bold and unashamed” in pursuing growth even if it means taking difficult decisions.

He will say: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.

“This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s. We are determined to break that cycle. We need a new approach for a new era focused on growth.

“That is how we will deliver higher wages, greater opportunities and sufficient revenue to fund our public services, now and into the future. That is how we will compete successfully with dynamic economies around the world.

“That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth. We will be bold and unashamed in pursuing growth – even where that means taking difficult decisions. The work of delivery begins today”.

Mr Kwarteng will set out a 30 point “growth plan” in his first budget since becoming Chancellor just over a fortnight ago.

He will cut taxes and red tape as part of the mission to create jobs, improve living standards and promote confidence in the UK economy.

Mr Kwarteng will also pledge to speed up around 100 major infrastructure projects across the country. The government will prioritise transport, energy, and digital schemes after decades of bureaucratic delays.

But the Chancellor is giving the emergency financial statement to the Commons against bleak predictions the UK is already in recession.

The Bank of England said it believes GDP will fall 0.1 percent in the current quarter on the back of a reported 0.2 percent fall in the previous three months. A technical recession is when the economy shrinks for two quarters in a row.

The central bank is hiking interest rates to 2.25 percent – the highest rate in more than 13 years. Downing Street said forecasts can “fluctuate and change” as economic interventions are made.

The Chancellor will announce talks are taking place with 38 local authorities in England about setting up new low tax, low regulation investment zones. Areas include parts of the West Midlands, Tees Valley, Somerset and Hull.

The government believes the zones will be “hubs for growth” and will be “emblematic” of the modern Britain it wants to create.

Generous, targeted and time-limited tax cuts for businesses will be offered to boost productivity and create new jobs.

It is hoped the reforms will encourage investment in new shopping centres, restaurants, apartments and offices.

The investment zones will also have “liberalised” planning rules to allow more land to be used for housing and commercial development.

Mr Kwarteng also confirmed last night that the 1.25 percent national insurance hike introduced by Rishi Sunak to cover strains in health and social care is being reversed from November 6. Legislation allowing the change to be made was tabled in the Commons yesterday.

The Chancellor said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.

“Cutting tax is crucial to this – and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the levy will help them grow, whilst also allowing the British public to keep more of what they earn.”

The Treasury said most employees will receive a cut to their national insurance contribution directly via their employer’s payroll in their November pay, although some may be delayed to December or January.

The NI hike was expected to raise about £13 billion a year to help tackle NHS backlogs and pressures in social care, but the government insists funding will still be maintained.

Mr Kwarteng insists that growing the economy will increase the tax revenues needed to pay for public services.

The Institute for Fiscal Studies said the plan to drive growth was “a gamble at best” and that ministers risked putting the public finances on an “unsustainable path”.

But business leaders welcomed the move, saying it was a “big win” for struggling firms.

Shevaun Haviland, director general of the British Chambers of Commerce, said: “After months of campaigning, today’s Government announcement to reverse the increase to the National Insurance Contribution (NIC) is a big win for the British Chambers of Commerce and the business community. This is much needed support for businesses during these difficult times.”

UK Hospitality chief executive Kate Nicholls said: “Hot on the heels of government support for businesses facing rising energy costs, cutting employer NI contributions is more excellent news for the hospitality sector, and will help businesses reduce their costs as they attempt to return to profitability while facing a perfect storm of financial pressures, including the interest rate rise, VAT back to 20 percent, and the frankly unfair business rates regime.

“Cutting employee NICs is a great way to ensure people keep more of their money, primarily so that they’re able to pay their bills, and then to enjoy affordable luxuries, such as visiting hospitality venues.

“This announcement is particularly welcome, as UKHospitality has long campaigned for an employer NICs regime that supports job creation, which this move will certainly help towards.”

Kitty Ussher, chief economist at the Institute of Directors, said: “Businesses right across the country will be applauding the Government’s realisation that raising employers’ national insurance was a mistake.

“As the Institute of Directors has consistently and repeatedly argued from the outset, this was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable.”

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02.10.2022
Labour’s Emily Thornberry apologises after her own photo shows her speeding at 81mph
Emily Thornberry has been caught red-handed speeding at 81 miles an hour in a picture which the Labour frontbencher shared…
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02.10.2022
Truss crisis as poll shows under-45s think Starmer’s Labour is more patriotic than Tories
Sir Keir Starmer’s strategy of playing the National Anthem at the start of the Labour conference appears to have paid…
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  • 15 часов, 42 минуты назад 02.10.2022Politics
    Labour’s Emily Thornberry apologises after her own photo shows her speeding at 81mph

    Emily Thornberry has been caught red-handed speeding at 81 miles an hour in a picture which the Labour frontbencher shared on social media. The MP for Islington South and Finsbury MP posted the picture on her Instagram account as she travelled to the party’s annual conference in Liverpool last week.

    The Shadow Attorney General, whose husband is a High Court judge, commented: “On my way to Labour Conference.”

    She also explained that she was ‘choosing a Labour Students disco playlist’.

    The photograph was taken by a passenger in the rear of the vehicle, with Ms Thornberry, wearing sunglasses and a brown coat, behind the wheel of the Toyota Prius.

    The car’s digital dashboard shows its speed as being 81 piles per hour at the time.

    In a statement issued last night, a spokesman for Ms Thornberry said: “She is well aware that the speed limits are set where they are for a reason, and she apologises unreservedly for this fleeting and totally unwitting moment when she exceeded them on the drive to Liverpool.”

    The speed limit on motorways and dual carriageways has been 70mph since 1965, and is currently 60mph on all other roads.

    In accordance with government guidelines, motorists who travel at speeds of between 71 and 90mph on Britain’s roads are liable for a three-point penalty on their driving licences, with most police forces also imposing a £100 fine.

    As an alternative, drivers can opt to attend driving awareness course instead of accepting the points. Anyone who accrues 12 points on their licences is likely to be banned from the road for six months.

    Errol Taylor, chief executive of the Royal Society for the Prevention of Accidents, said motorway speed limits were “there for a good reason”.

    He explained: “At 80mph, the consequences will be a lot more serious if you crash.

    “The 80mph stopping distance is 400ft, which is 85ft further than if you are going at 70mph.

    “It is much harder to stop your car and avoid a crash if you are going at 80mph.”

    Mr Taylor added: “The faster you go, the less time you have to react and the force of the impact will be much more severe.

    “You are at a vastly higher risk of death or serious injury.

    “Also, fuel consumption is 25 per cent higher at 80mph compared to 70.”

    One person who is not necessarily a big fan of current speed limits is Prime Minister Liz Truss.

    During the course of her successful campaign to be elected Tory leader, she was quizzed at a hustings event by one audience member who said: “Smart motorways kill. They also cause long delays because they close lanes off when there’s a breakdown.

    “They also often impose very low speed limits, mandatory ones, much lower than necessary, so will you restore hard shoulders to all motorways and in the meantime will you change the speed limit from mandatory to advisory?”

    Ms Truss replied: “On speed limits, we need to be prepared to look at that … I can’t give you a precise answer.”

    Addressing the issue of smart motorways, which seek to regulate traffic by varying speed limits, she continued: “I absolutely think that we need to review them and stop them if they are not working as soon as possible.

    “And all the evidence I have suggests they’re not working. We need to be prepared to look at that.

    “I do believe that the smart motorways experiment hasn’t worked.”

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  • 15 часов, 42 минуты назад 02.10.2022Politics
    Truss crisis as poll shows under-45s think Starmer’s Labour is more patriotic than Tories

    Sir Keir Starmer’s strategy of playing the National Anthem at the start of the Labour conference appears to have paid dividends with new polling showing that under-45s now believe his party is now “more patriotic” than the Conservatives. With the Tory conference starting today, the polling by Techne UK provides an alarming picture of Labour closing the gap on an area which has been a strength for Liz Truss’ party.

    According to the survey of 1,624 UK voters over 28 and 29 September, 40 percent think the Conservatives are the most patriotic just five points ahead of Labour on 35 percent.

    But the picture in the latest Techne UK poll gets better for Sir Keir in terms of a turnaround on the issue with all age groups under 45 with Labour leading in each category.

    In 18 to 34-year-olds Labour has a 37 to 32-point lead as the most patriotic over the Tories, and in 35 to 44-year-old it is ahead by 38 to 31 percent.

    Even 45 to 54-year-olds category it is almost even with the Tories on 40 percent to Labour’s 39 percent.

    The polling underlines how far Labour have gone since the 2019 election and appears to vindicate Sir Keir’s decision to sing God Save the King at the start of Labour’s conference.

    It could also be a key factor in winning back Red Wall seats which flipped to the Tories in 2019 amid a perception that Labour was unpatriotic.

    The findings show a massive improvement for Labour from the days under Jeremy Corbyn’s leadership where polls had them as “unpatriotic.”

    Lord Ashcroft surveyed former Labour voters after the 2019 defeat and found Corbyn’s lack of patriotism was a key factor especially in an election where Labour was pushing for a second Brexit referendum.

    In his report Ashcroft said: “Though a few saw good intentions, former Labour voters in our groups lamented what they saw as his weakness, indecision, lack of patriotism, apparent terrorist sympathies, failure to deal with antisemitism, outdated and excessively left-wing worldview, and obvious unsuitability to lead the country.”

    The change of tack was signalled over the summer when shadow Cabinet member Lucy Powell, a key ally of Starmer’s, insisted that Labour is “the true party of patriotism”.

    She said: “Being patriotic isn’t something that Labour has always looked comfortable with.”

    “But progressive politics has been at its most successful and transformational when it captures the best of British values, nurtures our world-famous institutions and instils a belief that our best days lie ahead of us, not just in the past.

    “A quick survey across British politics today tells us that it’s not the Conservative party which enshrines these patriotic principles but Labour.”

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    However, the poll by Techne UK suggests that different voters have different definitions of patriotism with 66 percent of Leave voters describing the Conservatives as more patriotic and 63 percent of Remain voters saying it is Labour.

    Tory Ashfield MP Lee Anderson, who is a former Labour Party activist, said that his ex-party has simply put on a false veneer on patriotism.

    He said: “If you looked carefully there were Labour members walking out when the national anthem was sung. They are not patriotic at all.

    “But in the end, Labour can clutch at straws with patriotism but it is the money in people’s pockets which will decide the next election.

    “People are grumpy at the moment but when they feel the effects of the tax cuts and other policies it will be different.”

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  • 15 часов, 42 минуты назад 02.10.2022Politics
    Liz Truss ‘sacked top official at the Treasury after he froze her out’ with Philip Hammond

    Liz Truss sacked a top official at the Treasury after he “froze her out” with former Chancellor Philip Hammond, an insider has claimed. Tom Scholar previously served as the permanent secretary at the Treasury. He was removed from the position when Liz Truss became Prime Minister in September 2022.

    Speaking about the reasoning for his departure, a Number 10 insider told the Times: “When Liz was No 2 in the Treasury she opposed Philip Hammond’s tax hikes and he and Scholar effectively froze her out. She was cut out of the loop on budget decisions.”

    They also said that he faced criticism for not focussing on policy.

    The insider said: “Tom’s big focus wasn’t actually policy, it was liaising with the Bank and external markets and making sure the subterranean pipework of the system was working

    “That is precisely what has gone wrong this week.”

    The final reason, they said, was that “Kwasi couldn’t handle how the rules were bent to help Scholar work from home.”

    The revelations about the Treasury’s private secretary come as the department faces criticism over its latest policy announcements.

    The Government announced a swathe of tax cuts last week, including cutting the basic rate of income tax from 20 to 19 percent and abolishing the 45 percent top rate of tax.

    The planned corporation tax increase, which was set to rise from 19 percent to 25 percent, will also be axed.

    Meanwhile, stamp duty will be cut for homebuyers.

    In the wake of the announcement, the pound fell to a record low against the dollar. And on Monday morning, borrowing costs reached their highest levels since August 2008.

    Earlier this week, the Bank of England was forced to intervene over a “material risk” to the UK economy and it announced it will start buying bonds in order to stabilise what it described as “dysfunctional markets”.

    The Labour Party held a record lead in the polls earlier this week.

    The YouGov poll, based on a survey of 1,712 voters on 28 and 29 September, presented a damning picture for the Conservatives, with Labour taking a 33-point lead.

    According to the Times, Treasury insiders warned Ms Truss that her announcements would bring a “big risk”.

    They said: “Senior Treasury officials made clear there was a big risk. The cabinet secretary [Simon Case] made it clear that there was a huge risk.

    “You can do what you said in the leadership election — reverse the national insurance rise and stop the corporation tax rise — but once you get into further tax cuts you have to have someone mark your homework.”

    An insider added: “She was told, ‘Don’t do this, no one will like it.’ And her attitude was basically, ‘I don’t care’.”

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  • 15 часов, 42 минуты назад 02.10.2022Politics
    Liz Truss rips up more EU red tape to invigorate economic boom and free 40,000 businesses

    Liz Truss has announced she will tear up more EU red tape to allow British business to boom and take advantage of Brexit freedoms. The Prime Minister and her Business secretary Jacob Rees-Mogg have announced that they are to redefine the term “small business” freeing 40,000 businesses from burdensome paperwork.

    The move was only made possible because Britain has left the control of the EU and will mean that any company with fewer than 500 employees can now be designated as a small business.

    Previously, the definition applied to those with between 50 and 249 employees and it set a low bar deterring companies from growing and creating more jobs.

    The announcement comes after last week’s mini-budget which launched a new growth strategy with the aim of making the British economy grow by at least 2.5 percent a year.

    Ms Truss has vowed to “get Britain moving” – the slogan of this year’s party conference in Birmingham – and end years of Brussel-led stagnation and needless regulation.

    She said: “By raising the definition of a small business, in terms of regulation, from 250 to 500 employees, we will be releasing 40,000 more businesses from red tape.

    “That will make it easier for them to get on with their business, in turn boosting our economy and creating more jobs to help get Britain moving.

    “Higher economic growth means higher wages, better jobs, and more funding for our public services and NHS”.

    The change of the rule comes in tomorrow and was one of the major items identified by Mr Rees-Mogg when he was Brexit Opportunities minister in Boris Johnson’s government.

    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 were often granted for small businesses, which the EU defines as below 250 employees.

    However, the UK is now free to take its own approach and exempt more businesses to those with under 500 employees.

    The changed threshold will apply 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 1000 employees, once the impact on the current extension is known.

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    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.

    Mr Rees-Mogg said: “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.”

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  • 17 часов, 42 минуты назад 02.10.2022Politics
    Rees-Mogg protected by police as screaming protesters pursue him at Tory conference

    Jacob Rees-Mogg was targeted by a protester at the Conservative Party Conference, taking place this week in Birmingham. Police were forced to intervene in the incident, escorting the Conservative MP through the conference centre. The incident occurred as he was leaving the ICC, where the conference is being held.

    He is thought to have been heading back to the Hyatt Hotel, where most Conservative MPs are staying.

    Protesters were heard booing, while many shouted: “You’re not welcome here”, “Tories out” and “shame on you!”.

    The incident comes amid wider unrest over the Conservative party’s economic policies and the cost of living crisis.

    Over the weekend, the country was rocked by demonstrations, with hundreds of thousands of people across the UK calling for the Government to do more to help with spiralling bills.

    Campaign group Enough is Enough organised rallies in 50 different towns and cities across the country yesterday.

    Protests took place in Manchester, Leeds, Birmingham, Newcastle, Ellesmere Port, Preston, London and Sheffield.

    Campaign Group Enough is Enough wrote on its official Instagram account: “It’s time to say #EnoughlsEnough. No to handouts for the rich and hardship for the rest.

    “This Saturday, October 1st, we’ll be protesting in 50 cities and towns across Britain.”

    Thousands of people in Manchester marched to demand the Government take action against the ongoing cost of living crisis, with many of them shouting “never trust a Tory”.

    Meanwhile, hundreds of protesters also took to the streets of Norwich, with demonstrators holding signs which read “solidarity with the strikers” and “freeze profits not people”.

    The march joined up with The Communications Union and National Union of Rail, Maritime, and Transport Workers (RMT) before congregating outside Norwich Railway Station.

    Speaking about the strike, Janice Richardson, the East branch secretary of the Communications Workers Union, said: “Today’s been a really good turnout – RMT is on strike and postal workers are on strike and people have come down to support us.”

    More than 10,000 people also gathered at King’s Cross in London yesterday in solidarity with striking rail workers.

    Just 11 percent of rail services ran yesterday as a result of a 24-hour walkout staged by members of four trade unions.

    The latest strike by members of RMT, Aslef, Unite and the Transport Salaried Staffs’ Association (TSSA) is expected to cause the worst rail disruption of the year so far.

    People across the country also set fire to energy bills yesterday as a symbolic act of protest against rising prices.

    This came on the day the government’s £150bn energy price guarantee came into effect, which allows average household bills to hit £2,500 a year, up from £1,971.

    The symbolic act was organised by Don’t Pay UK, a movement calling on people to cancel their direct debits unless the government does more to protect the poorest families.

    Don’t Pay ran events in 18 towns and cities, alongside the protests held by Enough is Enough and other organisations.

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  • 19 часов, 43 минуты назад 02.10.2022Politics
    ‘What about pensions?’ Economist highlights issue over Kwasi’s plan for ‘cuts to benefits’

    An economist has sent a warning over Kwasi Kwarteng’s plan for “cuts to benefits”. Julian Jessop warned that Government may be considering a “real-terms cut” to benefits, signalled by Mr Kwarteng’s “reluctance to confirm that benefits will be uprated in line with inflation”. Writing on Twitter, he said a “narrative is already developing that there needs to be big and immediate cuts in public spending in order to pay for big cuts in taxes”.

    This, Mr Jessop said, “would simply undermine the growth agenda”.

    The economist warned that the “political risks” of such a cut “are obvious”, explaining: “It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.”

    He added: “If you argue that working-age benefits shouldn’t be increased by the full amount of inflation, why should that not also apply to pensions (especially as the basic state pension is not means-tested)?

    “The optics of a real-terms cut in benefits but not in pensions could be dreadful too.”

    This comes after the Government announced a swathe of tax cuts last week.

    The plans include cutting the basic rate of income tax from 20 to 19 percent and abolishing the 45 percent top rate of tax.

    The planned corporation tax increase, which was set to rise from 19 percent to 25 percent, will also be axed.

    Meanwhile, stamp duty will be cut for homebuyers.

    In the wake of the announcement, the pound fell to a record low against the dollar. And on Monday morning, borrowing costs reached their highest levels since August 2008.

    Earlier this week, the Bank of England was forced to intervene over a “material risk” to the UK economy and it announced it will start buying bonds in order to stabilise what it described as “dysfunctional markets”.

    Meanwhile, the Labour party held a record lead in the polls earlier this week.

    The YouGov poll, based on a survey of 1,712 voters on 28 and 29 September, presented a damning picture for the Conservatives, with Labour taking a 33-point lead.

    Ms Truss has been attempting to reassure voters and MPs that the policies will pay off, after numerous MPs expressed doubt over how long the Prime Minister will last.

    According to the Sun, the Prime Minister and the Chancellor have been personally ringing MPs to kill off the impending mutiny.

    One senior Conservative MP told the Sun: “The Government has gone bananas. It is like the place is burning down and there are just a few crazies outside saying we have got to carry on.

    “There are dozens of MPs who would rebel on the Finance Bill — it would get to 40 and overturn her majority.”

    Another MP said: “I think we have lost the election.”

    Meanwhile, many senior Tory MPs, including Rishi Sunak, David Davis, Sajid Javid and Mel Stride, are reportedly planning to boycott the Conservative Party Conference, taking place in Birmingham this week.

    The former Chancellor reportedly plans to be in Yorkshire instead, with an ally of Mr Sunak telling the Sunday Times he plans to give UK Prime Minister Liz Truss “all the space she needs to own the moment”.

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Politics 'New era of Britain': Kwarteng to unleash economic blitz with huge tax cut announcement