Statement from Chancellor of the Exchequer, Jeremy Hunt:
Chancellor of the Exchequer, Jeremy Hunt said:“My focus is on growth underpinned by stability. The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world class public services. But we went too far, too fast.
“We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling but the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people.
“I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances.”
CHANCELLOR Kwasi Kwarteng has been sacked, carrying the can for the ill-judged ‘mini-budget’ which has caused economic turmoil since it was announced three weeks ago today.
‘I’m going nowhere’ Kwarteng, Prime Minister Liz Truss’s choice as Chancellor, was recalled from an IMF meeting in Washington DC this morning to be told the news.
Prime Minister Liz Truss will desperately hope that the departure of close ally Kwarteng will appease the markets. She made the following brief statement confirming a humiliating U-turn this afternoon:
Good afternoon,
My conviction that this country needs to go for growth is rooted in my personal experience.
I know what it’s like to grow up somewhere that isn’t feeling the benefits of growth.
I saw what that meant and I am not prepared to accept that for our country.
I want a country where people can get good jobs, new businesses can set up and families can afford an even better life.
That’s why from day one I’ve been ambitious for growth.
Since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth.
I want to deliver a low tax, high wage, high growth economy.
It’s what I was elected by my party to do.
That mission remains.
People across this country rightly want stability.
That is why we acted to support businesses and households with their energy costs this winter.
It’s also the case that global economic conditions are worsening due to the continuation of Putin’s appalling war in Ukraine.
And on top of this, debt was amassed helping people through the Covid pandemic.
But it is clear that parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change.
We need to act now to reassure the markets of our fiscal discipline.
I have therefore decided to keep the increase in corporation tax that was planned by the previous government. This will raise £18 billion per year.
It will act as a down-payment on our full Medium-Term Fiscal Plan which will be accompanied by a forecast from the independent OBR.
We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term.
We will control the size of the state to ensure that taxpayers’ money is always well spent.
Our public sector will become more efficient to deliver world-class services for the British people.
And spending will grow less rapidly than previously planned.
I met the former Chancellor earlier today. I was incredibly sorry to lose him. He is a great friend and he shares my vision to set this country on the path to growth.
Today I have asked Jeremy Hunt to become the new Chancellor.
He is one of the most experienced and widely respected government ministers and parliamentarians.
And he shares my convictions and ambitions for our country.
He will deliver the Medium-Term Fiscal Plan at the end of this month.
He will see through the support we are providing to help families and businesses including our Energy Price Guarantee that’s protecting people from higher energy bills this winter.
And he will drive our mission to go for growth, including taking forward the supply side reforms that our country needs.
We owe it to the next generation to improve our economic performance to deliver higher wages, new jobs and better public services, and to ease the burden of debt.
I have acted decisively today because my priority is ensuring our country’s economic stability.
As Prime Minister, I will always act in the national interest.
This is always my first consideration.
I want to be honest, this is difficult. But we will get through this storm.
And we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.
Kwarteng’s replacement – and the UK’s fourth Chancellor in a tumultuous 2022 – is none other than veteran former health secretary Jeremy Hunt.
Hunt supported Rishi Sunak – who’s predictions on the economy have been proved painfully accurate – in the recent Tory leadership election.
Hunt himself was an early casualty in the recent Tory leadership election and was also once voted as the most unpopular front-line politician of all time!
Clearly another popular choice … what could possibly go wrong?
HM Treasury issued the following statement this evening:
Government update on Corporation Tax
The Prime Minister has set out that the way the government is delivering on its mission to achieve a low tax, high wage, high growth economy is to change.
The legislated increase in the Corporation Tax rate from April 2023 will go ahead, with most small businesses benefitting from the new small profits rate.
Chancellor Jeremy Hunt will deliver the Medium-Term Fiscal Plan on 31 October, detailing action to get debt falling as a percentage of GDP over the medium term.
The government has today [Friday 14 October] announced that Corporation Tax will increase to 25% from April 2023 as already legislated for, raising around £18 billion a year and acting as a down payment on its full Medium-Term Fiscal Plan.
The decision has been taken in recognition of the need to ensure the UK’s economic stability and reassure markets of its commitment to fiscal discipline, after elements of September’s Growth Plan went further and faster than markets were expecting.
The Prime Minister has set out that the government is prepared to do whatever is necessary to ensure debt is falling as a share of the economy in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.
The previously announced small profits rate of Corporation Tax will be maintained. Smaller or less profitable businesses will not pay the full 25% rate, and companies with less than £50,000 of profit – the large majority – will not see any increase at all, continuing to pay Corporation Tax at 19%.
The UK’s corporate tax regime will remain competitive and supportive of growth at the 25% rate, continuing to be the lowest rate in the G7. As part of the forthcoming tax review, the government will look at how the tax system can go further to promote growth and investment.
The government is committed to growing the economy and taking forward supply-side reforms that will ignite strong and sustained growth that delivers prosperity for the UK.
Chancellor of the Exchequer Jeremy Hunt will set out the government’s Medium-Term Fiscal Plan on 31 October, alongside a full forecast from the independent Office for Budget Responsibility.
Lorna Slater, the Scottish Greens MSP for Lothian has welcomed the Scottish Parliament’s vote to introduce a national rent freeze and new protections from evictions.
The measures in the Bill, which was introduced by a Scottish Green Minister, Patrick Harvie MSP, was overwhelmingly passed last week. It will provide vital protections for tenants over Winter and last until at least March 2023.
These changes will help tenants across Lothian where the average monthly rent is £942, which is an increase of 41.7% since 2010.
Lorna Slater, the Scottish Green MSP for Lothian said: “I am delighted that this Bill has been passed. These are vital changes that will make a huge difference at what is a desperate time for tenants all across Scotland.
“The measures in the Bill will provide stability and support for households and families across Lothian and beyond at a time when many are being hit by soaring costs and bills.
“These are the most progressive set of tenants’ rights anywhere in the UK. The legislation, which will last until at least the end of March 2023, puts Scotland at the forefront of tenants rights in the UK and sets a crucial precedent for other governments to follow.
“With Greens in the Scottish Government, we are leading the change and building a fairer, greener and better future for our communities.”
Prime Minister Liz Truss will join a virtual gathering of G7 leaders and President Zelenskyy today (Tuesday 11 October).
Meeting comes in the wake of Putin’s illegal annexation of four Ukrainian territories and a brutal assault on Ukrainian civilians in Kyiv and elsewhere.
The Prime Minister will ask countries to maintain biting sanctions and call for a full meeting of NATO leaders in the coming days.
G7 leaders will meet today (Tuesday 11 October) to reiterate the unity of opposition to Putin’s continued brutality in Ukraine.
In the last 24 hours Russia has stepped up its attacks on Ukrainian cities like Kyiv, killing civilians and cutting off electricity and communications. This follows Putin’s orchestration of sham referendums in an attempt to annex four Ukrainian regions.
Today’s video call, which will also be attended by President Zelenskyy, is the first gathering of all G7 leaders since Ukraine’s counter-offensive started to take hold in Ukraine.
The Prime Minister will use the call to urge fellow leaders to stay the course. She will point out that Ukraine’s military advances have been made possible thanks to the international support they are receiving – not just in terms of military aid, but also humanitarian assistance and the impact of western sanctions against Russia.
The Prime Minister is also calling for an urgent meeting of NATO leaders, ensuring allies remain united and resolute in their opposition to Putin’s behaviour.
Addressing fellow G7 leaders, the Prime Minister is expected to say: “The overwhelming international support for Ukraine’s struggle stands in stark opposition to the isolation of Russia on the international stage.
‘Their bravery in the face of the most brutal acts of violence has earned the people of Ukraine global admiration.
‘Nobody wants peace more than Ukraine. And for our part, we must not waver one iota in our resolve to help them win it.’
Yesterday the Prime Minister spoke to President Zelenskyy to condemn the recent attacks on Kyiv and the annexation of Ukrainian territories, and to reiterate the UK’s support.
This year the UK has committed £2.3 billion in military support to Ukraine, which has enabled the provision of Multiple Launch Rocket Systems, hundreds of rockets, thousands of rounds of ammunition, crucial defence vehicles and five air defence systems including Starstreak.
As the Ukrainian Armed Forces face a difficult winter, the UK is also providing critical cold weather gear and other forms of non-lethal support to bolster their resilience.
Later this week, all UN members will vote on Russia’s breach of the UN Charter with its annexation of Donetsk, Luhansk, Kherson and Zaporizhzhia. 141 UN member states voted to condemn Putin’s full-scale invasion of Ukraine in March, and earlier this month the majority of UN Security Council members voted against the recent annexations.
In their call today, G7 leaders are also expected to discuss the global energy crisis precipitated by Putin’s actions. The group is currently working to finalise and implement an international cap on the price of Russian oil, which will further damage Putin’s revenue stream.
The Prime Minister will point to this action as evidence of what the G7 can do both to constrain Putin and act as an economic NATO, defending our countries’ interests.
The Prime Minister is working with fellow leaders to increase our energy independence and end the global reliance on malign states, such as Russia, in our critical resources.
First Minister announces doubling of December Bridging Payment to £260
Families of an estimated 145,000 children will benefit from extra support this winter to help with cost of living pressures – backed by Scottish Government investment of £18.9 million.
Bridging Payments were introduced in 2021 ahead of the extension of the Scottish Child Payment to 6-15 year olds. The final quarterly Bridging Payment, due in December, will now be doubled to £260, meaning families will receive up to £650 per eligible child this year.
All children registered to receive free school meals on the basis of family low income are eligible and will receive this payment automatically.
Total Scottish Government funding for the Bridging Payments will increase to an estimated £169 million across 2021 and 2022.
This is in addition to the Scottish Child Payment which will be extended to all eligible under-16s from 14 November and will rise to £25 per child per week on the same date – a 150% increase in the benefit within eight months.
First Minister Nicola Sturgeon said: “I am proud of the work the Scottish Government is doing to tackle child poverty. The Scottish Child Payment is paid to eligible families and is unique in the United Kingdom.
“It started for under-6s at £10 per week per eligible child. In April we doubled it to £20. Five weeks from today we will increase it again, to £25 and will also extend it to families with children up to age 16.
“That is vital financial help for well over 100,000 children, delivered in time for Christmas. That is the sign of a government with the right priorities.
“But we need to do more because we know this winter is going to be really tough. Rather than looking forward to Christmas, too many families will be dreading it because they don’t know if they can afford to heat their homes or even pay for food.
“As part of our help to the poorest families over last year and this, ahead of rolling out the Scottish Child Payment to under 16s, we have made quarterly bridging payments of £130 to children and young people in receipt of free school meals.
“I am delighted that the Scottish Government will double the December Payment from £130 to £260.
“That will help put food on the Christmas table for families of 145,000 children and young people. I don’t pretend it will make all of their worries go away – no government with our limited powers can ever do that. But I hope this investment of almost £20 million will bring a bit of Christmas cheer to those who need it most.”
Bridging Payments were introduced in 2021 ahead of the roll out of the Scottish Child Payment to under 16s. The £130 payments are paid quarterly by councils on behalf of the Scottish Government. Families received up to £520 per eligible child in 2021 and will receive up to £650 in 2022. Bridging Payments support around 145,000 school age children.
Povery campaigners have welcomed the announcement.
The Poverty Alliance tweeted: ‘We welcome @NicolaSturgeon announcement today that the @scotgov will double the final Scottish Child Payment bridging payment, up from £130 to £260.
‘This will put cash in the pockets of those who need it most. This is how we #ChallengePoverty‘
INDEPENDENCE THE ONLY ROUTE TO ESCAPE TORY CUTS FOR GOOD
SNP MSP Gordon Macdonald has backed calls for Chancellor of the Exchequer Kwasi Kwarteng to resign or be sacked following his shambolic handling of the UK’s finances.
It comes as the independent Office for Budget Responsibility confirmed they offered to provide a forecast to the Chancellor to go alongside his fiscal statement, but that it was not commissioned by the UK Government.
This was despite the OBR confirming it WAS able to produce an updated forecast that satisfied the legal requirements of the Charter for Budget Responsibility.
And the calls to quit have intensified after Prime Minister Liz Truss refused to rule out her Government slashing benefits and cutting £18billion from public services – which threatens Scotland’s budget and our NHS – to pay for Kwarteng’s staggering incompetence in mishandling the economy.
SNP MSP Gordon Macdonald said: “The fallout from the new Truss administration’s ‘mini-budget’ has been huge, taking a wrecking ball to the UK’s finances, endangering the pension funds of millions, causing banks to withdraw mortgages and leaving millions of families in Edinburgh deep distress.
“We now learn that despite the OBR publishing their forecast to the UK Government, the Treasury will delay the publication until November 23. This is simply unacceptable.
“It’s been a disastrous first few weeks of the Truss premiership but if the rhetoric from the Conservatives is to be believed, much worse is yet to come.
“Within days of taking office, we have once again seen the devastating consequences of Scotland being shackled to this outdated, corrupt Westminster system. Mortgages, pensions and savings of the people of Edinburgh are all being badly hit – and there is no plan to fix it.
“Instead of trying to dodge accountability or, as we now know, drinking champagne with hedge fund managers on the night of his budget, the Chancellor must do the honourable thing and resign or be sacked.
“And Truss’s plan to impose a new wave of Tory austerity cuts is utterly obscene. After 12 years of Tory mismanagement and Brexit damage, the UK already had the worst levels of poverty and inequality in north west Europe.
“The UK government should be reversing the damage it has caused, not doubling down on cuts and pushing more people into poverty.
“These actions underline the need for Scotland to become an independent country – so we can escape Westminster control and get rid of the Tories for good.”
Responding to Scottish Labour Leader Anas Sarwar raising his late constituent Anne Sinclair’s case at First Minister’s Questions this week, Foysol Choudhury MSP said:“I am grateful to Anas Sarwar for raising the case of Anne Sinclair with the First Minister.
“I raised the case with the First Minister in February and was told that the seven months of delays she had faced in her cancer diagnosis were ‘not at all acceptable’. I agreed with that assessment.
“Unfortunately Anne passed away this summer. Throughout her journey with cancer she was determined that I raise her story in the Parliament, find answers for the delays she faced, and fight so that nobody else was left in the same position. Her sons, who were in the gallery of the Scottish Parliament for FMQs today, have kindly given me permission to continue that fight on their mother’s behalf.
“Anne’s case starkly demonstrates the real people behind the numbers we hear every week in the Scottish Parliament. There are faces behind all the waiting lists, the people waiting in ambulances, and the people who cannot get the care they need. These are not just statistics, they are human beings who deserve dignity in their healthcare.
“Unfortunately Anne was let down, and her sons deserve answers and an apology for the delays in their mother’s diagnosis.
“I want to thank my office staff for pursuing what has often been an emotional case. We all want to see that Anne’s family can be assured that lessons are learned and nobody else will be left in the same position.”
The family of Anne Sinclair, 64 from Edinburgh, said:“We are happy that Foysol Choudhury MSP and Scottish Labour have continued to raise our late mother’s case at the Scottish Parliament.
“We do not wish for any other families to go through what our mum and our family have gone through. Our mum was a fighter and she would want her questions about her late diagnosis to be answered.”
Responding to the report by the Institute of Race Relations “Citizenship: From Right to Privilege”, which finds that British Muslims have had their citizenship reduced to “second-class” status, Foysol Choudhury MSP said:“I want to ensure all minority communities that I will continue my lifelong fight for freedom, justice and equality for all.
“As the report suggests, some groups are targeted more than others due to a mixture of unconscious biases and racist stereotypes and views within our institutions.
“We have seen through the Windrush scandal and the increasing use of the power to revoke citizenship from Muslims that minorities now cannot rely on British citizenship to guarantee their rights, and that the value of British citizenship is not equal for everyone.
“No one should be made to feel any less welcome in our society because of the colour of their skin, their culture or their religion, and every British citizen should be treated the same way. Unfortunately, this does not always happen and will always be a work in progress until every aspect of our society and institutions decolonise their mindsets and their practices.
“When the Home Office says they “make no apology for doing whatever is necessary to protect the UK from those who pose a threat to our security”, this is fine to the extent that it applies equally to every culture, race and religion living in the UK.
“Any security measures must also apply to, for example, the forces of the far-right, who have in recent years conspired to plot the murder of a sitting Member of Parliament and are responsible for almost two fifths of plots foiled by the security services. We do not, however, see their citizenship being in any way threatened, no matter how dangerous they may be.
“I am not asking for any special treatment for any particular ethnic or religious group, simply for justice and fairness for all.”
Deputy First Minister John Swinney and his counterparts from other devolved governments are seeking an urgent meeting with Chancellor of the Exchequer Kwasi Kwarteng to discuss immediate actions needed to reverse the damaging effects of the UK Government’s tax proposals.
Mr Swinney and the Finance Ministers from Wales and Northern Ireland are highlighting the profound impact of “the largest set of unfunded tax cuts for the rich in over 50 years” warning that it is “a huge gamble on public finances and the health of our economy”.
In a joint letter to Mr Kwarteng, they warn against being condemned to another decade of austerity and express deep concern over reports that UK Government departments will be asked to make spending cuts to balance the budget, which may have profound consequences for devolved budget settlements already eroded by inflation.
The Ministers also renew calls for the UK Government to provide targeted support for households and businesses, funded through a windfall tax on the energy sector. In addition, they call for Social Security benefits to be increased, and request additional resources for the devolved governments to protect public services and to fund public sector pay settlements.
