Jeremy Hunt says mistakes made and taxes set to rise as Bank warns of ‘strong response’ to inflation – as it happened | Politics

A summary of today’s developments

Senior Conservatives will this week hold talks on a “rescue mission” that would see the swift removal of Liz Truss as leader, after the new chancellor Jeremy Hunt dramatically tore up her economic package and signalled a new era of austerity, writes Toby Helm and Michael Savage.

A group of senior MPs will meet on Monday to discuss the prime minister’s future, with some wanting her to resign within days and others saying she is now “in office but not in control”. Some are threatening to publicly call on Truss to stand down after the implosion of her tax-cutting programme.

In a rearguard action to prop up the prime minister, her cabinet allies tonight warned MPs they would precipitate an election and ensure the Tories were “finished as a party” if they toppled a second leader in just a few months.

Health chiefs, public sector unions and teaching leaders expressed horror after the new chancellor, Jeremy Hunt, appeared to usher in a fresh era of austerity, and the threat of more misery for cash-strapped hospitals and schools, writes Mark Townsend and Michael Savage.

In his first interviews since dramatically replacing Kwasi Kwarteng on Friday, Hunt provoked widespread alarm by promising “very difficult decisions” for government budgets.

The NHS Confederation, which represents the healthcare system in England, Wales and Northern Ireland, warned the prospect of further cuts was “incredibly grim”.

The head of the largest teaching union for England and Wales denounced Hunt’s attempt to placate the financial markets as “disastrous” and “scary” for schools, while another teaching union, NASUWT, said deeper cuts would cause “immeasurable damage to children’s learning”.

Meanwhile the GMB, which represents more than 500,00 public sector workers, said the Tories’ decade of austerity from 2010 scarred the country and stagnated the economy, adding: “The British people are being used as lab rats in a terrible Tory economic experiment.”

Labour has signalled it will be boycotting the World Cup in Qatar next month, citing the treatment of construction workers and the criminalisation of same-sex relationships.

Lucy Powell, the shadow culture secretary, said: “Of course I am looking forward to the World Cup and I’ll be cheering England on.

“But we cannot avert our eyes from the problems in Qatar.

“Dozens of construction workers have been killed putting this tournament on.

“And LGBT England and Wales fans are having to put up with the tournament being played in a country where their sexuality is criminalised.

“I’m excited to cheer on the England team from my sitting room and from my local pub.”

The Sunday Times is reporting that the PM’s intermediaries contacted allies of Sajid Javid, the former chancellor, last week to gauge his appetite for a return to the Treasury to replace Kwasi Kwarteng.

The newspaper said Javid’s conditions were too much for Liz Truss to accept.

“Sajid would have only done it if he had complete control,” one ally of Javid’s said.

Three sources said Javid had insisted on full autonomy over tax-and-spend policies, the freedom to appoint his own political team and the reinstatement of Sir Tom Scholar, the veteran Treasury permanent secretary who was unceremoniously sacked by Kwarteng and Truss on their first day in office.

Chancellor to ‘delay 1p income tax reduction’

Crossbench peer Lord Jim O’Neill said he presumed there would not be many “tensions” between Jeremy Hunt and the Prime Minister, because otherwise the government is “finished”.

The former chief economist at investment bank Goldman Sachs told BBC Radio 4’s PM programme: “I can’t imagine how the Prime Minister could afford to lose him quickly if she wanted to stay on herself.

“So in that sense, he’s got a lot of influence but his dilemma is the backbenches of this peculiar era of the Conservative Party is just full of so many different factions and many of them will be put out by Jeremy’s own history as evidenced by the fact he failed to become leader twice but also by what he implied now has to happen.”

He added: “I’m making what might be a really naive assumption that he’s only taken this job because he’s been given carte blanche by a desperate prime minister.”

Astonishing as it may sound to someone who has not paid attention to politics since about 2016, after little more than a month in office, a consensus is building that Liz Truss could be finished as prime minister.

But who could succeed her as the Conservatives’ fifth prime minister since 2016? Candidates include runner-up in the last contest Rishi Sunak, defence secretary Ben Wallace, and, of course, Truss’s predecessor, Boris Johnson.

Read the full story here:

Kwasi Kwarteng argued against scrapping the top 45p rate of tax in last month’s mini-budget but was overruled by Liz Truss, according to a report by the Mail on Sunday.

The paper said sources claimed Kwarteng wanted to wait until next year before introducing the measure for fear of “doing too much at once”, but was told: “No, let’s go for it.”

The mini-budget, delivered on 23 September, shook market confidence in the long-term ability of the government to pay its debts, causing the pound to plummet and the cost of government borrowing to soar.

The scrapping of the 45p rate was among the package’s most controversial measures.

Truss sacked Kwarteng on Friday as part of an attempt to reassure the markets and calm unrest on her own backbenches.

The new chancellor, Jeremy Hunt, is due to deliver a fiscal statement on 31 October.

MPs from across the Commons have been paying tribute to Sir David Amess on the anniversary of his murder.

Former home secretary Priti Patel said Sir David was an “outstanding public servant full of kindness, energy and integrity” who was killed in a “senseless attack on democracy”.

Sharing a photo of herself with Sir David, Conservative MP Alicia Kearns called him a “wonderful friend” and said “a man so full of love and joy shall never be forgotten”.

Labour’s Marsha de Cordova said she was remembering a “kind, caring and dedicated public servant”, while David Lammy called him a “politician who cared deeply about his constituency, animal welfare and so many issues beyond”.

The prime minister, Liz Truss, her predecessor, Boris Johnson, and the Labour leader, Sir Keir Starmer, have all also paid tribute.

Almost a fifth of all households in Britain will be spending more on housing costs by the end of 2024, analysis by the Resolution Foundation thinktank has found.

The group said the average mortgagor would be paying £3,500 a year more in the fourth quarter of 2024 than they were in the third quarter of 2022, and that the additional spend would be £26bn overall.

In London, the average additional spend rises to £5,500.

The thinktank said that, by the end of 2024, more than 1.8 million mortgaged households will see housing costs take up at least 10% more of their household income.

It added that by the first quarter of 2027, almost no mortgaged households would be unaffected by the rise in rates.

Writing on Twitter, Resolution Foundation chief executive Torsten Bell said the changes would be a “massive deal” for the economy.

Liz Truss’s premiership now depends on the success of the financial statement due to be delivered on 31 October, one of her MPs has said.

Sir Geoffrey Clifton-Brown, treasurer of the backbench 1922 Committee, had it put to him by LBC that should the statement fail to restore market confidence in the government, Truss would have to go.

“I think that’s exactly right,” he said. “I think a huge amount rests on that.

“If that statement – and God forbid, I hope this won’t be the case – doesn’t manage to satisfy the markets and satisfy everybody else, and the economy’s still in chaos, then I think we would be in a very difficult situation.”

He added that he was not “anticipating that happening”.

“I think [new chancellor] Jeremy Hunt is a man of sufficient calibre that he will come up with a solution that does command the confidence of the markets,” he said.

“And let’s hope, for the British people, … that does happen.”

New analysis by the Trades Union Congress has found that payouts to shareholders have increased three times faster than workers’ wages since the 2008 financial crash.

Shareholder handouts, through both dividends and companies buying back their own shares, have soared £440bn above inflation since 2008. Meanwhile, wages have fallen, growing £510bn less than inflation.

The TUC says the findings are evidence that firms do have the capacity for wage increases if they allow their workers a greater share of a business’s wealth.

“Too many businesses are lining shareholders’ pockets without giving workers a fair deal,” said the TUC general secretary, Frances O’Grady.

Read the full story here:

Here’s a summary of the latest developments…

Here’s the full story on Starmer speech this morning (see also 11.52am):

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